Reported in the Straits Times, we understand that Sales executives of Borneo Motors, who spoke on condition of anonymity reported that the company was planning to cut commissions by $100 to $350 per car. In case you’re wondering: sales staff’s income averaged between $6,000 and $8,000 a month.
Union Intervened To Help
However, their trade union, the Singapore Manual & Mercantile Workers’ Union (SMMWU) would have none of it.
SMMWU submitted a request to Ministry of Manpower (MOM) to request for conciliation involving its sales consultant members and Borneo Motors (Singapore) Pte Ltd over the proposed cut in commission and an increase in sales quota.
The Straits Times reported that an MOM spokesman said the ministry has “received a request from the Singapore Manual & Mercantile
Workers’ Union to conciliate a dispute involving its sales consultant members and Borneo Motors (Singapore) Pte Ltd over a proposed cut in commission and an increase in sales quota”.
If there was no trade union, the sales executive would have to take the pay cut unwillingly. Or make it really ugly, but eventually the pay cut would still come, or the company would downsize.
But why cut commissions?
Commission directly affect a sales person’s motivation to work. This would foreseeably impact revenue.
This magazine speculates that the texture of the car industry is being remarkably changed by the burgeoning Private Hire industry. Car COEs have shot up by 22 per cent to 28 per cent in the last month. Industry experts suggest that premiums will ease only if aggressive competition between private-hire operators cools.
Mr Ron Lim, general manager of Nissan agent Tan Chong Motor, was reported to have said: “Whether the current prices are sustainable will depend on how consumers react to the new quota.”
The motor industry knows something that the man in the street doesn’t: that sales is going to be largely fuelled by the Private Hire industry. If this was the case, sales representatives performing retail sales wold be of little value to company. The effort would be better spent on corporate sales.
This is an example of the spiral effect that a disrupted industry could have on others.
Redeployment, not cutting of commissions the key
Now if this was the case, a more responsible act Borneo could have done, was to retrain their workers to be redeployed into other departments where renewed vigour can add value to the company.
Merely “discussing” commissions will trap both management in deadlock that would go nowhere.
And this is precisely the case. Jasmmine Wong, managing director of Borneo Motors was reported to have said, “We are in the midst of discussions which we have every two years. We have up to the end of the year to reach a conclusion. Nothing has been decided.”
Wong also said that her priority was to preserve jobs. She revealed that the company had put in place a system which generates leads for its sales staff, as well as a car delivery division to relieve sales staff from non-sales duties.
It sounds as if by “relieving staff from non-sales duties”, the company is creating an opportunity to lower pay. I am uncertain of the wisdom of this.
In an ever changing, ever “high-tech” industry, people demand one thing that technology cannot provide: human touch and human trust. Sales people, other than securing sales, provide assurance, service and create more sales after the initial purchase is done.
Technology cannot do this as well as a person can.
It would be interesting to note that several veterans have been laid off two years ago when the new management team had taken over. Wong was a part of this new management team.
The car industry is changing.
Tan Chong Motors, the agents of Nissan, was reported to have closed its Bukit Timah showroom. This was attributed to a dip in number of walk-in customers.
However, COE prices continue to rise. Traditional taxi companies are finding it challenging to compete, even they have redesigned their services and their mode of operations now look closer and closer to the private hire model.
Will people be buying their cars through Grab and Go-Jek in the future rather than through car show rooms?
What would this mean for the common person who aspires to own a car for family purposes?
What would this mean for sales staff, such as those affected in Borneo?
Whilst government administrators study and plot the path of the transport industry in the future, we see a greater role trade unions have in the changing texture of the workforce affected by disruption.