Singapore needs major employment overhauls to meet productivity targets

To achieve 30% increase in productivity, companies need to devise competitive and cost effective health care, financial security, work/life balance, and other benefit programs.

The Singapore Government announced plans to increase productivity by 30 percent in real terms over the next decade and at the same time raised the costs of bringing in foreign workers. Mercer, a global consulting, outsourcing and investments firm, says meeting this ambitious target will require major change on the part of many companies.

Su-Yen Wong, ASEAN Managing Director at Mercer, said: “The productivity goals the government announced are intended to encourage companies to re-look at their workforce, especially those that rely on foreign labour, and some cases significantly restructure their business operations, according to a Mercer report.

Productivity boosts can take many forms, including better leveraging technology, redesigning jobs and work processes, and moving further up the value chain away from low-skilled to specialised and technical positions. “They will need to fundamentally review their business models, and put in place sustainable measures for the medium- to long-term, if they are to achieve this ambitious increase.”

War for talent heats up
Last year there were a record 15,360 number of jobs unfilled for at least six months, according to the Ministry of Manpower. The Government today said another 21,300 new skilled jobs will be created in 2011. This will put huge pressure on organizations who are struggling to fill the vacancies they already have.

Ms Wong added: “Given the upward pressure on wages and overall labour costs, companies will be compelled to go beyond compensation and focus on a broader employee value proposition that more strongly differentiates them as an employer. They can no longer afford to simply pay lip service to staff attraction and retention drivers such as benefits, work-life balance, career development, leadership and communications.”

Ageing workforce requires re-evaluation of benefits
According to Mercer, given the skilled labour shortage the economy is facing, companies will need to bolster dwindling workforces by employing older workers. 

Ms Wong added: “It will be important for companies to devise ways to balance diverse employee needs for health care, financial security, work/life balance, and other benefit programs that are both competitive and cost effective. Companies also have an opportunity to incentivize health and wellness, which not only improves productivity, but also reduces health-related risks and costs.”