SINGAPORE - AFTER years of watching the construction industry falter on productivity, the Government has decided to introduce some tough love to get it up to speed.

Firms in this sector will soon need to have a minimum percentage of higher skilled workers on their payrolls, said Deputy Prime Minister Tharman Shanmugaratnam today.

He did so while acknowledging the patchy report card on productivity, ever since the Government set the ambitious target of raising it by 2 to 3 per cent every year by 2020. "Almost all the gains were achieved in 2010 when we were recovering from the recession," he said.

And yet, raising productivity was the only viable route for Singapore, if it were to avoid a "zero sum game" between business and labour, added Mr Tharman. The alternatives were not pretty: either jobs would be lost, or prices would go up or wages would stay down.

And while some sectors have made an effort to raise their game, the construction industry remains a laggard, with its productivity in the first half of this year actually falling compared to last year.

"Construction must be transformed into an efficient and more integrated industry, led by progressive firms and supported by a higher skilled workforce," said Mr Tharman at an event held on Oct 30 to mark the end of the inaugural National Productivity Month.

The new rule could give it a push.

It requires that at least 10 per cent of the work permit holders in each firm be classified as higher skilled, and will take effect from Jan 1, 2017.

The changes will be phased in over the next two years to give firms in the industry time to adapt.

Those that fail to meet targets will face curbs on hiring.