Businesses, it is up to you to improve our dismal productivity

We all know it by now: businesses need to improve productivity in order for real increase in wages to remain sustainable.

I cannot help but feel a sense of worry for the economy. If productivity performance has been uneven across sectors since Singapore embarked on the productivity drive, based on a report from the Ministry of Trade and Industry, then what are businesses in sectors that have not performed well i.e. retail, Food and Beverage and construction doing to improve productivity?

Waiter

There are many schemes and assistance programmes for businesses and companies to tap on to make productivity improvements in their operations, such as the Productivity Innovation Credit and the Inclusive Growth Programme.

Even the opposition Workers’ Party has mentioned and acknowledged that the schemes and programmes are focused on helping businesses to improve productivity. Yet, some businesses are not improving their productivity to keep real wage increases sustainable.

The NTUC has been doing much to push for unionised companies to improve on their productivity. It launched the Progressive Wage Model which places emphasis on improving productivity, skills and progression pathways for workers to rise up the ranks.

In a media briefing to share the 2015 outlook for the unionised sector, the NTUC Assistant Secretary-General stated that the trend of negative productivity growth over the last few quarters could lead to wage stagnation.

She even mentioned that the NTUC is still not seeing real actions taking place. “If companies do not come forward to be really forthcoming in identifying the areas of gaps, to redesign the job and to review the work processes, then we are not very hopeful that we can have any quantum leap improvement in productivity.”

Improving productivity is also crucial to prevent the cost of operations from being too high and leading to a closure of the business.

electronics manufacturing

We know that businesses here often cite high costs and poor business as reasons to close down. But can’t that be mitigated by improving productivity? Closing down a business means that workers have to be retrenched. In just the first quarter of this year alone, around 300 workers from the chemical and electronics sector will be retrenched. I really empathise with the 300 workers who will be retrenched so early in the new year.

I really hope that businesses can improve their productivity so that wage increases can be sustained and the lives of workers can be improved.

 

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Arthur Lee

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