Employers should offer structured training, firms with productivity gains urged to give one-off bonus: National Wages Council

Real total wages rose by 4.2 per cent on average last year, up from 3.2 per cent in 2017, according to the Manpower Ministry on May 29, 2019.
Real total wages rose by 4.2 per cent on average last year, up from 3.2 per cent in 2017, according to the Manpower Ministry on May 29, 2019.PHOTO: ST FILE

SINGAPORE - Companies should offer their staff structured training, on top of the salary hikes they have earned based on their contributions as well as business performance, the National Wages Council said on Thursday (May 30).

The council also said it expects all companies that increased their productivity last year to give employees a one-off bonus.

On top of this, it urged companies to give low-wage workers a monthly raise of between $50 and $70 for those who earn a basic salary of up to $1,400, $100 more than the threshold it used last year, a move that is expected to benefit 22,000 more workers.

In all, about 154,000 full-time workers will come under the new basic salary threshold.

The council made the recommendations based on better labour market conditions and productivity and trends in workforce training, it said in a statement.

The Government, Singapore's biggest employer, said on Thursday that it accepts the council's recommendations, which apply to all employees, regardless of the sector they are in, and include re-employed employees. 

The council noted that the Singapore economy is likely to grow by 1.5 per cent to 2.5 per cent this year, slower than last year's 3.1 per cent as the global growth outlook remains cloudy.

Real total wages rose by 4.2 per cent on average last year, up from 3.2 per cent in 2017, according to the Ministry of Manpower (MOM) on Wednesday.

The council pushed for employers to develop a training plan that meets current and future requirements to help them move forward in spite of the gloomier economic outlook.

"Wage growth must be supported by productivity growth, based on business transformation and re-skilling of the workforce."

 
 
 
 

Training participation rate increased to 48 per cent last year, but employers must do more, the council said, noting that the proportion of employers that provide structured training for their staff has not improved over the past 10 years.

Innovation and productivity initiatives are goals and measures that employers should have in place, the council added.

It listed job redesigning, skills training and using government schemes such as the Enterprise Development Grant as germane ways to forge ahead.

The council also urged employers that have done well and have good business prospects to reward their employees with built-in wage increases and variable payments in line with employers' performance and employees' contributions.

Those that have done well but face uncertain prospects "may exercise moderation" in built-in wage increases, but should still reward employees with variable payments, it added.

It offered more leeway to businesses that had not performed well and face uncertain prospects by offering them the option of wage restraint, with management leading by example.

Still, companies that did not do well should make greater efforts to improve business processes and productivity, especially by investing in skills training, the council said.

Employers that improved their productivity last year should also give workers who earn a basic monthly salary of up to $1,400 a bonus of $200 to $360, a tighter range than the $300 to $600 suggested last year.

Permanent Secretary for Manpower Aubeck Kam said that the narrower range reflected "the moderation in productivity growth". Productivity growth fell from 3.9 per cent in 2017 to 2.4 per cent last year.

"The Government welcomes the stronger emphasis placed on employer-led training this year," he said, adding that "training is key to continued productivity gains and sustainable wage growth".

National Trades Union Congress president Mary Liew called the guidelines inclusive. "While the negotiations were difficult, it was a good outcome considering the uncertain economic headwinds, and at the same time, ensuring that the guidelines were both pro-workers and pro-businesses."

Dr Robert Yap, Singapore National Employers Federation president, said that "training and reskilling will be crucial to successful transformation", urging employers to invest in skills training for workers. "That is the way to sustain better wage increases."