|
SBF supports NWC 09/10's recommendations to continue to press on with concerted efforts to cut cost, save jobs and enhance competitiveness |
|
Singapore, Wednesday, 3 June 2009 - The Singapore Business Federation (SBF) and the Singapore National Employers Federation (SNEF) held a joint briefing to update their members on the National Wages Council's (NWC) latest guidelines for 2009/2010, released today.
SNEF President, Mr. Stephen Lee, informed some 1,000 employers that the overall business outlook for Singapore and global economy in 2009 is uncertain. On the global scale, he shared that Singapore's major trading partners such as the U.S., European Union and Japan, are expected to post negative growth this year, with only China and India projected to report positive growth in 2009. As for the local front, Singapore faces an increase in unemployment and decrease in productivity amid the challenging economic conditions.
However, Mr. Lee contends that Singapore's tripartite partners' response is more focused and they managed the job losses better with their coordinated push to retain jobs through initiatives such as SPUR, as compared to the approaches taken by Hong Kong, South Korea and Taiwan to tackle with the global recession, This, he noted, was Singapore's strength even though we have experienced a greater 1Q09 GDP growth contraction (-10.1%) than those three countries (range of -4.5% to -6.5%).
Mr. Lee called for companies to exercise caution in spite of talk of green shoots and the economy decline bottoming out - highlighting that the stock market's rally for the past nine to 10 weeks and the rebound in equity prices were not supported by concrete corporate results, and thus may not point to real economic recovery.
As for the NWC Wage guidelines for 2009/2010, he strongly advised companies to press on with concerted actions the same guidelines in January - to cut costs, save jobs and enhance competitiveness.
SBF and SNEF urge companies to:
- Amid the continued decline in productivity in all sectors for 2008, companies should improve productivity through retraining and upgrading the skills of the workforce, and make better use of manpower resources.
- The above could be done through management leading by example in the following areas:
- Wage freeze or cut
- Implementation of other cost cutting measures and intiatives to cope with the downturn
- Enhancement of wage flexibility
- Improvement in productivity
- For companies whose business, profitability and/or prospects are affected by the economic downturn, they could, in consultation with their unions/workers, implement a wage freeze or wage cut in line with their performance and prospects, in order to help companies stay competitive and save jobs.
- Companies which perform well should reward their workers with moderate wage increases, preferably in the form of variable payment, so that their long-term cost competitiveness would not be affected.
- Companies with excess manpower are urged to implement the various recommended measures such as shorter work week, temporary layoffs, no pay-leave, and other work arrangements as alternatives to retrenchments. Workers should work together with employers to implement these measures so as to cut costs and save jobs.
- In implementing such measures including wage freeze or cut, management is to lead by example.
- Companies should introduce more flexibility in the wage system for the future, for those which are freezing or cutting wages, they are encouraged to implement Monthly Variable Component (MVC) in their wage structures to mange total cost. Companies may want to implement a cut in basic wages by introducing it as a reduction in MVC.
- Continue to tap on the various tripartite measures and initiatives available to manage the impact of the downturn, reduce costs and minimize job losses.
- Be open to taking workers with little or no relevant experience, and set appropriate employment terms reflecting the market realities of their sectors.
- Ride on this downturn to enhance their productivity through innovation, best sourcing, service excellence and developing the workforce to be highly skilled, productive and flexible.
- Work together with tripartite partners and workers to continue to push ahead with initiatives such as enhancing the employability and employment of older workers, bringing more women back to work and enhancing efforts to help low wage, contract and informal workers.
- Maximize the use of current slack manpower conditions to improve the skills of their workforce.
The NWC revised guidelines will apply from 1 July 2009 to 30 June 2010.
Going forward, SBF also strongly advises companies to look to new avenues to raise productivity and regain their cost competitiveness, including
a) Adopting business best practice
b) Adoption of ICT and other leading edge technologies
c) Adoption of new business model, or new ways of doing business, wherever it is applicable.
d) Stimulate demand generation via new production processes, R&D and exploration of new markets.
In regard to ICT for instance, there are shining examples of companies in South Korea, Taiwan and China that have made great strides in using the Internet and other leading edge technologies to grow their business. By contrast, just over 30 per cent of Singapore SMEs have a company website. This is a dismal statistic given that Singapore is an advanced economy and boasts one of the highest levels of e-government worldwide.
For an update on SBF programmes and activities, look up "Upcoming Events" on the SBF website, www.sbf.org.sg.
|
|
|
