Cleaners already earning at least $1,000: Firms

Firms cite tight labour market, criterion to meet foreign worker quota as reasons for higher pay

Most bosses are backing the new guidelines, saying the rules will help level the playing field and give them more leeway to raise wages. -- ST FILE PHOTO
Most bosses are backing the new guidelines, saying the rules will help level the playing field and give them more leeway to raise wages. -- ST FILE PHOTO

The tight labour market has already forced cleaning companies to raise their workers' monthly pay above the prescribed $1,000 mark, bosses told The Sunday Times.

This has driven cleaning costs up - some by almost 40 per cent - over the years.

Contract clients, including those who run hawker centres and building management firms, say they are bracing themselves to be hit harder when their deals are up for renewal later this year.

All cleaning companies will have to adhere to a progressive wage model in order to be licensed after new wage guidelines kick in September.

Basic pay, for instance, will start at $1,000 for a full-time indoor cleaner, with guidelines set on pay rises as staff climb up the skills ladder.

The Sunday Times spoke to 10 cleaning firms, which employ between 15 and 2,000 cleaners, last week. More than half of their cleaners are taking home a monthly pay of at least $1,000, they say, with five paying all their cleaners that much.

"The market rate is already higher than $1,000," said Mr William Peh, a director of operations at a company which employs some 1,000 cleaners.

"We have been paying more since last year. If we don't pay, we cannot get the cleaners we need."

Another reason is that local workers must be paid at least $1,000 if they are to make up the headcount at firms which need to meet the foreign worker quota.

Latest figures show that office and building cleaners earn a median gross wage of about $850, but this is based on data collected in the second half of 2012.

Companies servicing government contracts are already required to adopt the progressive wage model since last April. But smaller firms dealing mostly with the private sector have found it hard to convince clients to look beyond the lowest bidder.

Most bosses, however, are backing the new guidelines. They say they will help level the playing field and give them more leeway to raise wages.

Sales director of Clean Solutions Sunny Khoo said his company has raised the pay of more than 80 per cent of its cleaners since 2012, in part because of a requirement under an enhanced accreditation from the National Environment Agency.

As a result, his contract cleaning costs have risen by 25 to 30 per cent. Existing contracts, he added, are likely to follow suit when they are renewed.

"We did lose out on some private contracts, but with licensing, hopefully companies can win contracts not by cheap labour costs but by promising clients better service," Mr Khoo said.

Mr Patrick Lee, managing director of Biostar Cleaning Services, which employs around 150 cleaners, said his profit margins fell after he decided to raise the pay for 90 per cent of his workers to $1,000 since July last year. "Almost all our customers are from the private sector and most don't accept the higher prices, but as long as the loss is not too much, we will try to bear it," he added.

Cleaning companies and their clients are not the only ones who will feel the pinch. Some say ultimately the increase in costs will be passed on to consumers. For instance, Bedok North 216 Food Centre & Market Hawkers' Association president Goh Ah Kee said hawkers have had to pay an additional $30 for table-cleaning charges since last year. "If it goes up further, hawkers will have to pay more, and (food) prices may also go up by a few tens of cents."

Ms Stephanie Ho, general manager of AsiaMalls Management, said the additional cost "may possibly be in the range of 20 to 35 per cent". She added that the company will have to manage costs to "cushion the impact".

Condominium residents should not worry, however, said Mr Jimmie Ling, chief executive of the Association of Management Corporations in Singapore. Estate managers will face higher cleaning costs, he said, but cleaning standards will improve and "there are areas where you can cut costs, like energy savings through LED lights".

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