National Wages Council urges firms to ramp up structured training for staff

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

Wages council says productivity gains needed for wage hikes, seeks more pay for low earners

With uncertainty rising in 2019, the National Wages Council has urged all employers to offer their staff structured training.

This, in turn, would spur productivity growth to support and sustain wage hikes, it said yesterday.

While asking employers which have done well and have good business prospects to offer salary hikes and bonuses, the council said it expects all companies that improved their productivity last year to give their workers a one-off payment.

On top of this, it urged companies to raise the monthly salaries of low-wage workers by between $50 and $70.

The threshold has been raised this year to those earning a basic wage of up to $1,400 a month - up from last year, when only those earning up to $1,300 a month were included. The move is expected to benefit 22,000 more workers.

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

The Government, Singapore's biggest employer, said that it accepts the council's recommendations.

 
 
 
 

The council took into account economic growth prospects, productivity and workforce training trends in making its recommendations.

It noted that in 2018, wages had grown faster than the productivity growth of 2.4 per cent. It also pointed out that the proportion of employees receiving structured training - including classroom training and workshops - had not improved over the past decade.

"Wage growth must be suppor-ted by productivity growth," said the council.

It added: "All employers should develop a training plan that meets their current and future requirements."

Asking companies to work towards better wages and skills, it said jobs could be redesigned and workers trained for them. It also asked them to tap government schemes such as the Enterprise Development Grant.

The council noted that the growth outlook for this year is dimmer than last year's, and asked companies to reward employees based on their performance and business prospects.

Those that have done well but face uncertain prospects "may exercise moderation" in built-in wage increases, but should still reward staff with variable payments, it added. Those that did not do well and also faced uncertain prospects could exercise wage restraint, with management leading by example.

Dr Robert Yap, Singapore National Employers Federation president, said that companies which are not performing well should take advantage of the downtime to send their workers for training.

The council said that companies which improved their producti-vity last year should also give workers who earn a basic monthly salary of up to $1,400 a one-off payment 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", which fell from 3.9 per cent in 2017 to 2.4 per cent last year.

Singapore University of Social Sciences economist Walter Theseira said: "A company that is able to follow the recommendations will build trust and loyalty from the workforce, which will be an asset when times are bad."

His concern was that employers might find it hard to adopt a long-term outlook when industries were undergoing restructuring.

CIMB Private Banking economist Song Seng Wun called the recommendations sensible as the Singapore economy braces itself for a challenging year ahead.

"Gradual tweaks give employers the flexibility to decide how much to reward employees because not all sectors and industries performed equally well," he said.

"They also remind employers not to neglect low-wage workers and to be fair to staff, whether they are young or old, professionals or low-wage ones."

A version of this article appeared in the print edition of The Straits Times on May 31, 2019, with the headline 'Firms urged to ramp up structured training for staff'. Print Edition | Subscribe