At Spindex, higher productivity doesn't lead to cutting jobs

While overall productivity numbers are weak, some sectors have outperformed others.

The manufacturing sector achieved productivity growth last year despite the labour crunch and tighter foreign worker quotas.

Its 2.5 per cent productivity growth was bettered only by finance and business, at 3.5 per cent, the Ministry of Trade and Industry said on Tuesday.

At least one local manufacturer is keen to emphasise that better productivity through automation need not cost jobs.

To Mr Nicholas Tan, executive director of precision engineering firm Spindex, higher productivity does not mean he has to cut staff.

"Productivity to us is the total cost of production. It's what we can produce, taking into account quality, from the same amount of input," he says.

"Our objective is to maintain jobs for Singaporeans, not to simply cut headcount."

Spindex used the Productivity and Innovation Credit (PIC) grant, along with grants from Spring, to invest in a robotic welding system last year, among other productivity measures.

Through automation, Mr Tan hopes to reduce human error and improve worker safety, resulting in more consistent quality.

As for the workers themselves, skills training has helped each worker produce more than before.

Although it is hard to find new factory staff as many young Singaporeans are unwilling to do hands-on skilled labour, Mr Tan believes automation can, in fact, help attract fresh employees.

"Automation is about making the job easier," he says.

"If the job is easier and safer, Singaporeans may be more willing to do it."

While he acknowledged that manufacturing is increasingly being taken over by countries in the region with cheaper labour, his focus is on carving out a "higher value-add" niche for Spindex.

"We've changed our business structure over the last few years as manufacturing sectors move out to overseas operations.

"But we want to stay in Singapore - we're a home-grown company. So we've carved out a niche for ourselves in the oil and gas industry."

With his focus on adding value to his products, he hopes that this year's Budget will continue to have more grants to improve the skill set of workers.

"No matter how large a grant is, the money itself will eventually run out.

"What matters is the lasting improvement in our workers' skills."

mleeyy@sph.com.sg