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SBF supports the revised NWC 08/09 guidelines' call to reduce and manage total costs to help companies stay competitive and save jobs

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Singapore, Friday, 16 January 2009 - The Singapore Business Federation (SBF) and the Singapore National Employers Federation (SNEF) held a joint briefing today to inform their members about the National Wages Council's revised guidelines for 2008/2009.

SNEF President, Mr Stephen Lee, explained to more than 1,000 employers, management and HR participants that after four years of good economic and employment growth, the current economic uncertainties, declining productivity growth and higher inflation will make wage management challenging for employers.

He urged companies to adopt the revised NWC recommendations for 2008/09 to help them strengthen wage flexibility, reward workers fairly and to maintain their cost competitiveness.

SBF and SNEF strongly encourage companies to:

Take into account their performance and prospects in making wage adjustments this year in view of the uncertain business climate.
Raise productivity to sustain wage increases. Productivity growth has been declining since 2005 on the back of strong employment growth. Our relative competitiveness had declined slightly as the relative unit labour cost rose by 2.2% in 2007.
Reward workers for their contribution to corporate performance through the use of variable payment. Companies should continue to make greater use of variable payment to reward workers. Greater wage flexibility will enable companies to respond better to economic cycles.
Not engage in indexing wage increase to inflation as this will pass the costs entirely to employers and undermine our wage cost competitiveness. Furthermore, wage indexation can lead to a wage-inflation spiral if companies pass on the wage costs increases to consumers by raising prices.
Help workers cope by taking into account the government measures as well as the company's ability to pay.
Chip in to help workers through the lump sum payment so as not to raise built-in wage costs in response to higher inflation.
Adopt the Tripartite Advisory on Responsible Outsourcing Practices and Tripartite Advisory on Reemployment of Older workers.
Put into place age-friendly practices to facilitate the retention and employment of older workers and re-employment of workers at age 62. Companies are also urged to adopt and implement the Re-employment Advisory which gives companies with a comprehensive framework to tackle these challenges.

There was positive feedback during the Q&A session, including praise for the quick response to revise the NWC guidelines to tackle the current economic crunch.

SBF CEO, Mr Teng Theng Dar said in a press statement to that "SBF strongly supports the National Wages Council's (NWC) revised recommendations for 2008/2009 and endorses the call to reduce and manage total costs to help companies stay competitive and save jobs. SBF views the guidelines and the commitment by all the parties involved to be very clear."

"In the context of the current economic downturn, companies making wage adjustments are encouraged to exercise discretion to ensure that workers receive a sustainable wage. Companies not severely affected ought to reward their employees with a moderate wage increase. In addition, SBF recommends that companies focus on tapping SPUR (Skills Programme for Upgrading and Resilience) to reduce their manpower costs while saving jobs through higher course fee subsidies and higher absentee payroll for their local workers' training. SBF hopes to see a bigger budget allocation for SPUR in the 2009 Budget. SBF is of the view that "SPUR" is not just a "cut cost - save jobs" program, but a strategic human capital building tool to help companies retain and strengthen their talent pool in preparation for the next economic upswing," he added.

The NWC revised guidelines will apply with immediate effect until 30 June 2009.

About Singapore Business Federation (SBF)

For media enquiries please contact:
Gerald De Cotta, Tel: 6827 6896
Genette Koh, Tel: 6827 6874