Third: Some companies are unwilling to change with the times and enhance productivity, and would rather close down or move abroad.
Weak companies should shut
I believe there exist some companies that need to fold and go home.
During the last financial crisis, the government made the (now unpopular) move of allowing foreign manpower to arrive on our shores.
This, coupled with significant funding and training assistance, resulted in a Singapore that pulled through the mother of all recessions. All this without significant contraction of our economy.
The unfortunate side effect we see today is: inefficient, unproductive companies survived alongside productive ones. Many capitalizing on a free flowing foreign labour tap. Inefficient companies clinged on tightly to an economic pie and hogging on to manpower that other more efficient companies need so badly.
Today, there is tightening of the labour tap. Believe me, it is a good thing. This puts pressure on the weakest of businesses. If they can’t be efficient, it they can’t innovate, if they can’t find ways to be productive and profitable – they don’t deserve to occupy the very resources other better companies need.
Is it easy to get a job again?
So what happens to workers in these firms that shut? It is not their fault that the leaders of the corporation were unable to steer a ship productively.
Take heart in knowing that Singapore has a very tight labour market. Over 98% of the country is employed. If you ask any employer, the theme you hear is one of an “employee’s market”.
It will not be difficult for retrenched workers to get employed again quickly.
With union and MOM legislation however, it actually makes it quite costly to close up shop. To the country however, this may actually be good for Singapore’s productivity – companies will think twice about simply shuttering a Singapore-based operation that they are too lazy to optimize. The caveat to corporations is that they must take productivity enhancements very seriously, or face a potentially larger loss when they cease operations.
Productivity must increase so that all may benefit. It already is painfully clear that some companies will fall by the wayside as we make progress.
Companies are not left to their own devices though. They have access to funds such as the Productivity and Innovation Credit (PIC) and the Inclusive Growth Program (IGP) to assist them in the transition.
If you are in the C-Suite of a large corporation, or a business owner – you should be aware of activities in your operations that contribute to sluggish growth and productivity.
Slay productivity killers straight away and you shouldn’t have a problem operating in Singapore.