Speech by Mr Teo Ser Luck, Minister of State for Manpower at Committee of Supply 2017

  1. Madam Chair,
  2. Mr Lim Swee Say mentioned the importance of strengthening the bridge of innovation so that more companies can transform and grow, and successfully cross both the technology gate and the market gate.
  3. Companies which can do so would be better placed to tap on growth opportunities, contribute to our economic growth, and create more quality jobs for our workers.
  4. Since the start of October 2015 when Minister Lim launched the Lean Enterprise Development Scheme (LEDS), LEDS had been “playing this bridge”, the bridge of innovation.
  5. To date, 2,100 companies have signed up within LEDS. We are helping them to take steps to cross the technology gate towards the market gate.
  6. The vast majority, close to 90% of the 2,100 companies, were helped by some form of digitisation or technology adoption. For some, it is simply outsourcing, and this is how we are helping SMEs to go digital. But it is not just the companies that have benefitted, workers have also benefitted from improved productivity and technology adoption.
  7. Based on our analysis, nearly 10,000 good jobs are expected to be created by companies, supported by SPRING under LEDS. There has been an average of 18% wage increase for those whose roles were redesigned or upgraded through LEDS projects supported by NTUC’s e2i.
  8. I agree with Mr Chong Kee Hiong that success stories should be shared so that we can encourage more companies to come on board.
  9. So, let me share an example of how the LEDS helped a small SME to benefit from the scheme. The example is “Singapore Curry by Velu”, a restaurant, a small SME, which, implemented a simple software solution to help them become less reliant on manpower.
  10. Before the change, service crew either memorised or took down orders on paper. This is common in smaller shops and restaurants. With over 100 items on the menu, this conventional method was unproductive and also prone to errors. Some orders were missed out and this affected customer service standards.
  11. With support from e2i and WSG, the restaurant introduced an integrated system to link up the ordering system with the point-of-sale system and the kitchen processing system. Orders are now taken using tablets that relay the orders to the kitchen electronically. Service crew no longer need to memorise the orders or rush to the kitchen to relay the orders before they forget, and no orders will be missed out.
  12. As a result, the business operation is now much smoother, and the time taken from ordering to serving has been cut by 40%. Table turnover is also faster, customer satisfaction has increased, and their customer base has expanded too.
  13. Technology has transformed jobs for workers and most importantly, it has also changed the mindsets of the workers. Now, they treat technology as their co-worker, and also as a friend, instead of as a threat.
  14. Let me give an example of a service crew within the restaurant. 65-year-old, Mr Anwar Aziz Marican, is one local worker who has benefitted. He did not know how to use a tablet computer until this change. It is now easier for him to perform his service duties. He picked up new skills, learning how to use technology.
  15. With greater confidence in using technology, he was able to apply his newly acquired skills to also his daily life, learning how to use the WhatsApp message system to communicate with his grandchildren.
  16. And as Mr Anwar improved his productivity and enhanced his skills, his employer increased his salary by about 16%. This shows that when a company innovates, transforms, becomes more productive, jobs improved, the workers benefit as well through acquisition of new skills and higher wages. It’s a win-win for both firms and workers.
  17. Therefore, I fully support Mr Desmond Choo’s suggestion to encourage firms which have received support for productivity improvements, to share their gains with their workers, either in a form of higher wages or investment in their training.
  18. For some, this is already happening.
  19. Under the LEDS, e2i has already built in a wage increase requirement for supported workers, through the Inclusive Growth Programme. And for all firms, whether under LEDS or not, subsidies such as the training subsidies and absentee payroll are provided for companies to continue to invest in upgrading workers.
  20. Mr Desmond Choo will be pleased to know that almost 1,100 SMEs were supported and 1,200 PMETs were placed under the P-Max programme in 2016.
  21. Nonetheless, we can do more to encourage productivity gains-sharing. We will explore this with the LED taskforce agencies in the coming year, and that would be our main focus of the year.
  22. Mr Desmond Choo and Ms Jessica Tan asked how we are continuing our efforts to help more companies transform. I have just described the benefits that can be derived or gained from a single company, or a single enterprise transformation.
  23. This year, our focus would be to provide or push out cluster solution for groups of companies, clusters of companies, sectors, and the industry. We want to make it as pervasive as possible.
  24. We already have some examples. There were 30 preschool centres that have outsourced their backend kitchen and have a single centralised kitchen. They have succeeded in achieving 50% man-hour savings. But we can do more. 
  25. We want to nurture more industry cluster-based projects to create a viral effect in adopting some of the solutions, whether it is technology or just process redesign.
  26. We will do this by supporting the development of cluster solutions that have been pre-qualified by IMDA and the sector agencies, such as SPRING Singapore, to be capable of driving productivity improvement, skills development and innovation across each industry. This include off-the-shelf technology, and those solutions under the SMEs Go Digital Programme, announced by the Minister for Finance in his Budget Speech. 
  27. Let me share with you two solutions pre-qualified by IMDA.
  28. The first solution is one that can be adopted at the individual company level but can also be scaled up at the industry-wide level by multiple firms. This is a Biometrics Attendance Management System from a company called Intercorp Solutions.
  29. It uses highly precise facial biometric technology to capture and track real-time manpower utilisation such as workers’ attendance, working hours, and productivity man-hour spent on-site.
  30. With this solution, companies no longer need to rely on the conventional way of tracking manpower utilisation on-site by marking workers’ attendance manually. For smaller companies, they can actually self-register through the system. This reduces the administrative burden on operational staff, so that they can spend more time on other higher-value jobs.
  31. In addition, this management system allows users to generate detailed and comprehensive graphical reports from the captured workforce data that can be used to enhance their operation.
  32. For example, project managers can use the reports to understand manpower utilisation on-site and improve the operational efficiency with better manpower planning allocation. This solution can also help workers avoid salary dispute on working hours as it can be customised to integrate with any third party payroll software, ensuring seamless transference of working hours for the employers to compute the salary payment.
  33. I am pleased to share that 90 SMEs have adopted this solution.
  34. The second solution, is an online B2B Industrial Excess Marketplace, from Excess Inventory Guru Pte. Ltd that provides a cloud-based platform for manufacturing companies to manage their online sale of excess inventory and automate some of their tedious and manual business operation.
  35. With this solution, companies can expect to reduce their excess inventory holding from 30% to 15%, and achieve manpower savings of 10% as fewer workers are required to conduct stock taking of the excess inventory items. This is a good solution that can help manufacturing companies save carrying costs and can also help them achieve a leaner backend operation. 31 SMEs are using this solution today.
  36. These are just two of the many pre-qualified solutions that have been proven effective, and currently we have 71 solutions. Some are off-the-shelf solutions, spread across 17 industries that we are going to push out and make it pervasive.
  37. Our objective is to accelerate adoption and not just having one or two more companies doing this, but from “Addition to Multiplication”, from individual firms to cluster or industry-wide adoption.
  38. We know that this is not an easy task. We need to handhold and encourage companies to come forward. So we are going to adopt a three-pronged approach: Engagement, Access, and Support for faster development.
  39. First, Engagement. Mr Chong Kee Hiong would be pleased to know that we will step up on the efforts to outreach, through our network of 18 LED multipliers to reach out to more companies and industries. Roadshows will be organised for relevant pre-qualified solution providers to showcase their solutions to the companies.
  40. The LED Taskforce will also work closer with industries, especially those that have less companies applying to LEDS or undergoing the lean management change. Some of these industries can be hospitality, landscape and cleaning, which are those that we hope to encourage more to move up the productivity index. We will also work with relevant agencies that are championing some of the other sectors to push out more solutions to the companies.
  41. Second, we must continue to give companies ready access to all these pre-qualified solution providers. The spirit of LEDS is a “One Stop Service” because we will bring all our schemes and grants between MTI and MOM together.
  42.  Companies which are willing to transform need to only take the first step. They can approach any of the LED agencies or partners, including SME centres. They can also approach e2i, trade associations or chambers, and we will take them through this journey and link them up with these solution providers.
  43. To accelerate adoption, we are prepared to grant the pre-qualified solution providers temporary manpower under LEDS. We want to scale up and help to ramp up these solutions towards the sector.
  44. So, we need to enable those companies that provide these solutions. This flexibility in the manpower will only be granted to those that have demonstrated that they can scale up, and at the same time that there is demand for their solution.
  45. But they also have to consider Singaporeans for this job opportunities before we allow for such manpower flexibilities. As we strengthen the bridge of innovation, to support LEDS in 2017, we are targeting at 2,400 companies this year alone. We want the sector to change, and we want it to be pervasive across all sectors. We hope that the LEDS can not only transform a company, but strengthen the sector as well so that more quality jobs can be created.
  46. Madam Chair, Minister Lim also spoke about the foreign workers being an integral part of our Singapore workforce. They take on demanding jobs few locals want to do, and jobs where there is a shortage of local workers. I agree with Mr Kok Heng Leun that we should ensure that our foreign workers are treated fairly and provided with good working conditions.
  47. It saddens me to hear such a story being related. We are continuously trying to tighten our process to make sure our foreign workers or migrant workers are protected. This would include ensuring that they have safe workplaces as well, and also that they receive their due salaries and get compensated if they are injured on their job.
  48. For foreign workers with valid claims of salary non-payment, MOM will help them see through their claim, allow them to change employer and stay on in Singapore, even if their employer terminates their work pass. However, not all our foreign workers may want to change employers. They may just prefer to return home after their claim is resolved.
  49. So, we need to consult and work with the workers as well. Mr Kok has mentioned about the Korean system and the issues with recruitment cost. Our laws today already cap the costs that employment agencies can charge foreign workers at two months of their salary. But we constantly learn from other countries, and that would include the Korean system as well. We will review and study it further.
  50. I would like to stress that it is every employer’s responsibility to ensure their workers are well-taken care of, their workplaces are safe and also to prevent accidents. In the unfortunate event of an accident, employers must additionally take care of their injured workers, help them recover from their injuries and assist them to return to work quickly.
  51. Foreign workers today receive compensation for work injuries under the Work Injury Compensation Act. When applying for or renewing the work passes of their foreign workers, employers are required to provide insurance policy details to MOM.
  52. Moving forward, MOM will step up efforts to ensure the policies remain valid throughout the worker’s work duration here. We will educate and remind employers on the need to maintain insurance coverage for the workers during their stay. We will partner the General Insurance Association of Singapore and the Singapore Contractors Association Ltd on this front.
  53. Similarly, it is every employer’s responsibility to ensure that salaries are paid on time. When employers wilfully refuse to comply with the law to pay the salaries due to their workers, MOM will take such employers to task.
  54. However, beyond punitive enforcement action against such employers, we should ensure that in the meantime, foreign workers are provided with adequate assistance. In this case, my Ministry works with the Migrant Workers’ Centre (MWC) in this regard.
  55. Foreign workers who approach MOM on housing or other subsistence issues will receive timely assistance from MOM and our partners like MWC.
  56. MWC has been helping foreign workers with various employment issues since 2009. Such assistance includes providing housing and subsistence to workers in need, as well as advising and assisting workers on the enforcement of Labour Court orders. In some cases, foreign workers have been provided with an ex-gratia payment if the prospects of recovering the monies were slim. MWC’s aid to the workers is provided using the Migrant Workers’ Assistance Fund (MWAF) set up in 2012. 
  57. We have seen MWC in action. For example, MWC has been helping two Bangladeshi foreign workers who were badly burnt in a serious workplace accident since January this year. MWC has been working closely with like-minded partners like Silver Ribbon and Healthserve, as well as the hospital to provide emotional, psychological and physical support to the workers. As the employer has exhausted his finances helping the workers, MWC stepped in to provide the workers with housing and financial assistance for the payment of additional surgery through the MWAF.
  58. To better help foreign workers in need, MWC will set up a new office to be co-located with TADM at the MOM Services Centre. This is in addition to their two offices in Serangoon and Geylang. Foreign workers who need help can approach MWC at any of these three locations.
  59. Besides having a safe working environment, it is also important that foreign workers return to a clean and safe accommodation after a hard day’s work. 
  60. These standards ensure foreign workers have access to cleaner and safer accommodation with amenities.
  61. This is exactly the reason why we implemented the Foreign Employees Dormitories Act (FEDA) from 1st January last year to regulate large dormitories that house 1,000 or more workers.
  62. These are mostly purpose-built dormitories (PBD). With the higher standards required under FEDA, foreign workers in licensed large dormitories are assured of safe and well-maintained living spaces. They also have access to recreational areas, and amenities such as ATM machines, canteens and mini-marts, all within their dormitories.
  63. So far, 48 out of the 50 large dormitories have been licensed.
  64. As announced in Aug 2016, factory-converted dormitories (FCDs) which are smaller will have to meet additional conditions, including providing personal lockers to workers, the establishing a feedback mechanism and the installation of Wi-Fi.
  65. While the new requirements were put in place only in January this year, over 70% of FCDs inspected already comply with the standards. For many, before we come up with the additional conditions, many already implemented them.
  66. On foreign domestic workers (FDWs), Mr Louis Ng asked if MOM had plans to support the Centre for Domestic Employees (CDE) and employment agencies in their push for electronic payment of salaries for domestic workers as proof of salary payment in the event of a dispute.
  67. Our employers are required to maintain a record of the monthly salary paid to FDWs. Employers are also required to pay the FDW’s salary electronically if she so requests. Some FDWs may prefer to be paid in cash and to avoid being charged a fee if their bank accounts fall below the minimum sum required.
  68. We are open to Mr Ng’s idea and we also support CDE’s push towards electronic payment.  It is heartening to note that CDE is currently working with some banks to help FDWs set up bank accounts more easily and with better terms. We will help to support and facilitate that.
  69. Madam, migrant workers who have come here to earn a living for their families. We will continue to work with employers, employment agencies, NGOs like MWC and CDE to ensure that these foreign workers can work safely and be treated fairly during their stay in Singapore.

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