An inclusive Singapore: Firms must play role, says Deputy Prime Minister Tharman Shanmugaratnam at Singapore Business Awards 2012

They are critical in shaping country's future, says Tharman

By Magdalen Ng, The Straits Times, 21 Mar 2012

COMPANIES in Singapore have a critical role to play in shaping Singapore's future, said Deputy Prime Minister Tharman Shanmugaratnam yesterday.

They need to help ensure that Singaporeans remain at the core of the workforce even as the country brings in expertise and skills from abroad.

They also have a responsibility not just to shareholders, but employees and the wider community as well, and must pull their weight in building an inclusive society here.

'Building an inclusive society is not just about the Government redistributing resources to help those in need,' said Mr Tharman, speaking at an awards ceremony to honour Singapore's top businessmen.

'We can only be an inclusive society if employers treat their workers with respect, help them develop themselves, and reward them fairly.'

His comments come in the wake of the recently concluded Budget exercise, which saw a marked emphasis on helping at-risk groups such as the low income and the elderly.

'I encourage business leaders to take a more involved approach in understanding and addressing the challenges faced by those in the lower-paid rungs of the workforce,' said Mr Tharman, at the annual Singapore Business Awards ceremony.

'Think of how to improve every job, invest it with more skills, train up our workers to do the job well, and ensure they get a fair share of productivity gains.'

He cited Teckwah Industrial Corporation as an example of a firm where all levels of staff are involved in planning the company's strategic direction.

For example, its senior management walks the shop floor daily to engage employees. During the financial crisis of 1997 and 2008, Teckwah's staff volunteered to take a pay freeze and salary cuts to help the company.

'Of course, when the recession ended and the company's performance was better than expected, salaries were reinstated and all staff were given performance bonuses. Staff attrition has been kept low, and with a strong core of long-service employees,' he said.

Urging businesses not to forget older workers, Mr Tharman, who is also the Minister for Finance and Manpower, said that companies would benefit from tapping on the experience and skills of older workers by using them in jobs designed to suit their abilities.

Germany is one country facing similar issues confronting Singapore, with a falling fertility rate and an ageing population. A study from the University of Mannheim found that older workers in a Mercedes-Benz assembly line were more productive than younger ones. Experienced older workers made fewer mistakes and resolved unexpected problems more effectively, he noted.

Agreeing that businesses should redesign jobs for older workers, and invest in training, the president of the Association of Small and Medium Enterprises Chan Chong Beng told The Straits Times: 'If Singaporean companies are not going to help Singaporean workers, but instead depress their salaries, there will be a social cost that we will have to pay eventually.'

Mr Tharman also spoke about the responsibilities of businesses to the community, citing corporate philanthropy and the contribution of skills, expertise and time.

He highlighted Cerebos Pacific, which introduced a scheme to let employees leave work earlier to exercise. For each exercise session an employee attends, Cerebos donates $5 to The Straits Times School Pocket Money Fund.

The minister's bottom line: 'Businesses cannot exist without society. Neither can society prosper without strong businesses.'

Mr Tharman handed out the Businessman of the Year award to Mr John Chuang, group chief executive of Petra Foods, a maker of cocoa ingredients and chocolate.

Mr John Lim, group chief executive of ARA Asset Management, was named outstanding chief executive.

The Singapore Business Awards, now in its 27th year, is jointly organised by The Business Times and DHL Express.

Time for corporates to be responsible
Letter from Lim Zi Song, TODAY, 21 Mar 2012

I am impressed by the moves in Budget 2012 to help lower-income workers. However, these alone are insufficient in the long run. More should and could be done by corporates to help these workers.

Corporate responsibility seems to be more of a foreign concept in Singapore than in other countries. It is not just about ensuring that workers can earn enough for three meals a day.

It encompasses helping workers to improve themselves, thus increasing their social mobility. This could be done by increasing staff development, especially for those in support services or retail.

Proper training would ensure that they can handle tasks efficiently. As it may be difficult for companies to fully subsidise training for all, the Government should increase subsidies for these programmes.

Businesses need to acknowledge that skills upgrading is essential to their growth. Increased productivity would definitely go a long way in building a cohesive, dynamic workforce in Singapore.

Companies should also restructure their pay scale. Low-income workers face the main issue of stagnant pay, in spite of inflation and rising cost of living. Companies should provide incentives in the form of increased pay for these workers.

For its part, the Government could consider tax rebates for companies that are motivated and committed to developing their staff and increasing the pay of low-income workers.

Corporates must understand that they also have a stake in Singapore society and that their investment in people would improve the society as a whole.

As much as government incentives can help, there would be a point in time when corporates have to step in, and now is the perfect time for them to start playing their part.

Putting 'inclusive' in Singapore Inc
Editorial, The Straits Times, 23 Mar 2012

IN CALLING on companies in Singapore to help build an inclusive society, Deputy Prime Minister Tharman Shanmugaratnam helped to refresh the navigation bearings of all stakeholders. Certainly, this is not the role of the Government alone - a perception perhaps born from the visible lead it has taken in the process and the hefty increase in social spending. All have a part to play.

Employers have long been aware of the important role of businesses in society. Companies are primarily responsible to their shareholders, of course, but they also have duties towards their employees and the wider community. In today's context, this means ensuring that, in general, Singaporeans remain at the core of the workforce. Older workers should be seen as assets to be tapped and lower-income workers can be given a leg up through skills training and better jobs.

An enlightened business mindset goes beyond the call of corporate social responsibility. It touches on the issue of tripartism - the ability of an interventionist government, responsible labour unions and enlightened management to work together for economic growth. This formula allowed Singapore to escape the adversarial business environment of the 1950s and early 1960s, created by short-sighted employers and confrontational employees. The stability that followed helped the country attract substantial foreign investment. The message of that era is that while the state can help to balance the changing needs of capital and labour, it can do so only if all concur with its social goals.

The goal of an inclusive society is not a political platitude. As the recent Budget shows, the Government is willing to invest heavily in Singapore's future. However, there must be a limit to state funding if Singapore is to avoid slipping into welfare dependency.

While Singaporeans should help themselves before they turn to the state, they can do this only if the market gives them an opportunity to make the most of their abilities.

Companies can help by constantly finding ways for workers to upgrade their skills and by giving them a fair share of productivity gains. Firms benefit from this corporate culture because it inspires employees to give their best in both good times and bad. At the national level, since workers constitute the vast majority of citizens, their well-being has a direct and lasting impact on the social climate in which firms operate. A social deficit doesn't just diminish the country, it can also show up in the bottom line of a business.

Let's help every Singaporean to move up

Mr Tharman Shanmugaratnam, Deputy Prime Minister, Minister for Finance and Minister for Manpower, made a speech last Tuesday at the Singapore Business Awards 2012, calling on companies to inculcate greater inclusiveness in their operations. We provide an edited excerpt below:

WE ARE seeing a slowdown in our economy this year. However, it comes after a strong recovery from the global crisis of 2008-09. The labour market therefore remains tight and unemployment is low.

There remain major uncertainties in the global economy. However, our key task must be to press ahead with restructuring our economy so as to sustain growth over the longer term and raise the incomes of our workers.

We have to invest more in our workforce, in every industry, and make high skills and business innovation our key competitive strengths. We have to create better jobs and entrench a culture of learning and skills upgrading at all levels of our workforce. We are not there yet.

There is no reason to believe that industries that have relatively low productivity today will remain that way. In fact, industries such as construction, food and beverage, and the retail sector, where productivity has lagged the most, are also the areas which have the most obvious and greatest scope to improve. Their productivity levels remain far below the best practices internationally, or in Tokyo and Hong Kong.

We must make a determined effort in this decade to upgrade these sectors and enable them to be vibrant players in the Singapore economy even as our labour market remains tight. It can be done. And we can surely achieve this, if businesses, industry associations and Government work together to achieve this transformation. We must borrow every lesson on how productivity has been raised in other countries, develop our own ways to improve processes or develop new and higher value offerings, and take advantage of every government scheme to upgrade.

Raising the quality of jobs and productivity is the only sustainable way to hold our own in the international marketplace, especially as China and other emerging players move up the value chain. It is also the way we can raise incomes for all Singaporeans, and build an inclusive Singapore.

In this year's Budget, we have made significant enhancements to measures to help businesses, and especially our small and medium-sized enterprises, to make the transition to high productivity. We will work proactively with our business chambers and trade associations to help our smaller players take full advantage of these measures.

Making business inclusive

OUR overarching objective is not economic growth in its own right, but higher incomes and a better quality of life for all Singaporeans. Both the economic and social measures in this year's Budget are aimed at achieving an inclusive Singapore. We are introducing further initiatives, building on the significant moves we have made in recent years, to help lower- and middle-income Singaporeans do well. We are providing greater economic security and care for the elderly, and for Singaporeans with disabilities.

But building an inclusive society is not just about Government redistributing resources to help those in need. That is a necessary and important role for Government, but it is not what makes a truly inclusive society. We all know that. We can be an inclusive society only if employers treat their workers with respect, help them develop themselves, and reward them fairly. When Singaporeans actively participate in causes that will make this a better society. And when the more successful step forward to help others in the community because they feel it is their responsibility to do so. An inclusive society is about this engagement among fellow citizens, so that we can help everyone move up together.

As corporate citizens, you therefore play a major role - both with regard to your employees, and, as stakeholders in society, with a responsibility towards the broader community.

We must ensure that Singaporeans remain at the core of a diverse and competitive workforce. To do this, companies must actively look out for and groom local talents. We have to provide them the necessary exposure, training and career development opportunities, so that every Singaporean can maximise his or her potential. It is also how companies can build lasting competitive advantage, an advantage that rests on a skilled and experienced core of Singaporeans even as we bring in expertise and skills from abroad.

We have to get this balance right. We must stay open to expertise and know-how from around the world so that our companies can have the diverse teams that allow them to remain competitive. That is how we have grown many more jobs for Singaporeans themselves, and enabled most Singaporeans to do well. We should not give up this strength. But we must at the same time ensure that we maximise every Singaporean's potential, and develop the local capabilities that have to be at the core of Singapore's sustainable advantage in the world.

Our business leaders must also take a more involved approach in understanding and addressing the challenges faced by those in the lower rungs of the workforce. Think of how to improve every job - no matter how simple - invest it with more skills, train up our workers to do the job well. Think of how you can give them a fair share of productivity gains.

Many of our businesses already do so. They find it improves morale, reduces attrition and attracts people to the organisation. But creating better jobs and giving workers a fair share of productivity gains are also part of the broader culture of responsibility that businesses must share in as we build an inclusive Singapore.

Companies must also do more to redesign jobs to meet the needs of our older workers. What we face is not just a tight labour market where older workers are a useful resource, but also the reality that older Singaporeans are fitter, increasingly skilled and keen to contribute to the workplace for longer.

We are not the only economy facing this demographic challenge. Much like us, Germany has been experiencing a declining fertility rate and an ageing population. They have seen how companies have begun to adopt a different approach towards older workers. Recent surveys in Germany show a significant shift in attitudes towards older workers within the space of a decade, on the part of both employers and the public.

German employers now view older employees as valuable members of their workforce, and are putting in more effort in retaining them and maximising their contributions. In one example, researchers found that older workers in a Mercedes assembly line were more productive than their younger counterparts. The reason for this was that experienced older workers made fewer mistakes, and were able to resolve unexpected problems more effectively.

We need to make a determined effort to eliminate age-based discrimination. I would like to urge businesses to hire fairly based on the merits and experience of the candidate. And to put in extra effort to harness the full potential of Singapore's older workers. They may start slower or be a little unfamiliar with a new job, but if they are treated well and know the employer is going out of his or her way to make the job suit them, I think we will be surprised by what we find - the motivation, skills and the way older workers respond when given the opportunity. That is what happened in Germany.

Responsibility to the community

MORE companies have brought social responsibility into their mission statements. It is a heartening trend. They believe that corporate social responsibility, or CSR, is not a zero-sum game between a company's profits and costs. In fact, CSR can generate long-term benefits for businesses by enhancing brand image, as well as provide avenues for strengthening employee engagement and leadership development. More importantly, it sends a signal to the community about how the more successful in our society feel for their fellow citizens and take responsibility for strengthening our society.

One aspect of CSR is corporate philanthropy, which has been steadily increasing over the years. In 2010, about half a billion or $507 million came from corporate donations. This is almost double the figure in 2001. But we are still some ways behind several of the developed countries. For example, corporate giving as a percentage of gross domestic product in Singapore is about half the level that it is in the United States.

I would like to encourage companies to build on what we have achieved so far and develop corporate philanthropy in various segments of our community, working where necessary with voluntary welfare organisations and the Government. Put some thought into areas you would like to contribute to - not just financially, but by taking ownership over some part of community improvement.

Some of our companies are now giving their employees a day or more of paid leave to volunteer at a charity of their choice. Cerebos is an example. It has also put in place a scheme where its employees can leave an hour earlier each day to exercise, and for every exercise session each employee engages in, even on weekends and days off, Cerebos donates $5 to The Straits Times Pocket Money Fund.

Our growth must help improve the lives of all Singaporeans, for it to be meaningful.

Our local talents must be developed and stretched to their fullest potential, every worker must have the prospect of improving his or her income, and every Singaporean the opportunity to contribute to a stronger and better society. I encourage our companies to play their full roles as stakeholders in an inclusive Singapore.

Our business leaders must also take a more involved approach in understanding and addressing the challenges faced by those in the lower rungs of the workforce. Think of how to improve every job - no matter how simple - invest it with more skills, train up our workers to do the job well. Think of how you can give them a fair share of productivity gains.