Thursday, 4 October 2012

8 in 10 SMEs having trouble hiring: Survey

Association of Small and Medium Enterprises finds that 3 in 10 are considering moving overseas to stay viable
by Ng Jing Yng, TODAY, 3 Oct 2012

In a concerted cry for help, an Association of Small and Medium Enterprises (ASME) survey of some 200 companies found that eight in 10 of these companies currently face manpower shortages, following the tightening of regulations on foreign labour.

And the crunch is not just in jobs traditionally shunned by Singaporeans: The companies face difficulty in hiring across a range of job openings, including customer service officers, nutritionists, researchers, store managers, R&D engineers, and chefs.

They also lament that they are unable to expand or take on more business as a result. "Some are even considering folding. Many have the capability to employ and need to employ in order to meet the demand. However they are restricted by quota and this restricts business growth," the survey said.

About 30 per cent of SMEs said they are looking to relocate overseas to stay viable, given the current manpower crunch.

The ASME survey findings were backed by a separate survey by employment portal JobsCentral, which found that many SMEs have new vacancies they want to fill as they expand their business, but there's a high level of concern about whether they will be able to find suitable candidates.

The JobsCentral survey of about 400 HR professionals and hiring managers showed that two-thirds of the respondents will be hiring till the end of the year to fill newly-created positions - and the majority of those with new vacancies are SMEs.

Noting the SMEs' traditional reliance on foreign manpower, JobsCentral Group CEO Lim Der Shing said: "The situation is especially bad for SMEs, who may not have the resources and ability to compete with multi-national corporations or the Government in terms of compensation, benefits and career development."

The lifeblood of the economy, SMEs contribute to half of Singapore's gross domestic product and employ 7 in 10 of the workforce here.

As Singapore seeks to reduce its reliance on foreign labour, Members of Parliament (MPs) TODAY spoke to reiterated the need for better support to help SMEs cope. Acknowledging the vital role that SMEs play here, they expressed concern over the potential loss of jobs and business opportunities if more SMEs find their operations unsustainable.

Ang Mo Kio GRC MP Inderjit Singh noted that SMEs had gotten used to liberal policies on imported labour in the past. As a result, they did not invest in efforts to boost productivity levels and attract Singaporeans to work for them. Now, they could struggle to adjust, Mr Singh noted.

Concurring, ASME President Chan Chong Beng told TODAY that "some of the pay that SMEs are offering are just too low". He said: "They have been spoiled by the influx of cheap foreign workers."


The ASME survey also found that 63 per cent of respondents had difficulty seeking Singaporeans for low- to middle-skilled jobs. More than half (57 per cent) said they were not able to hire Singaporeans for professional and managerial roles.

On the range of jobs that SMEs face difficulty in hiring, MPs noted that it was not just about Singaporeans being picky.

Other factors include the greater allure of working for an MNC, compared to an SME.

Chua Chu Kang GRC MP Zaqy Mohamed, who sits on the Government Parliamentary Committee for Manpower, said: "In a tight labour market where there are a lot of choices for job applicants, smaller companies may also not be as attractive as compared to bigger ones."

Mr Singh also noted that for some of industries, the shortage could be due to the perception that they are dominated by foreigners. Citing the healthcare sector, he said that over time, less Singaporeans took up courses in those fields, leading to the shortage today.

While the Government has put in place a raft of measures to help companies raise productivity, Mr Zaqy suggested more outreach efforts to help companies get onboard the schemes available. Relooking operations to boost productivity could be challenging for smaller and less established firms which are already trying to deal with day-to-day issues, he noted.

On Sunday, Acting Minister for Manpower Tan Chuan-Jin wrote in his blog about the need to calibrate the foreign workers number. His comments came after concerns over population statistics released last week that showed continued growth in foreign workforce numbers.

Despite adopting aggressive marketing strategies, responses to job openings for the SMEs were dismal, the survey said.

Pine Garden's Cake had advertised on job portals and newspapers at least three times a week for position such as bakers and drivers but applications are "just a trickle coming in", said its business development director Wei Chan. These jobs offered salaries between S$1,600 and S$1,800 a month, said Mr Chan.

Seng Hua Hng Foodstuff HR and administrative manager Damien Tong said that young graduates may prefer established companies while SMEs may also not have the means to offer attractive career packages for job seekers. Mr Tong said that the company has invested in machines to raise productivity and tapped on government funding to hire a consultant to streamline their work processes.

However, automating processes may not work across the board for SMEs. Mr Chan cited the example of a tunnel oven which can make 1,000 cakes in an hour but would be unsuitable for a small bakery, for instance. 

To help them cope with the manpower crunch, the respondents in the ASME survey suggested, among other things, that the Government further differentiate between foreign labour categories and to apply separate regulations to each group. They also proposed that the Government tighten the foreign inflow of groups such as spouses, dependents and professionals, instead of groups such as low- to mid-skilled workers.

Foreign labour tightening has affected SMEs
By Saifulbahri Ismail, Channel NewsAsia, 2 Oct 2012

The gradual tightening of foreign labour regulations has affected businesses of some small and medium companies.

That is according to a recent survey conducted by the Association of Small and Medium Enterprises (ASME).

The survey also showed that some companies are looking to relocate or have already relocated overseas due to difficulty hiring in Singapore.

It was conducted last month based on the ASME's 6,000 strong members.

In the survey, two in five SMEs said that the recent manpower policies have negatively affected their business.

About three in 10 SMEs indicated they have moved or are thinking of moving their operations elsewhere.

The rest who are not looking to relocate said they are still cautiously monitoring the current business environment and labour shortage in Singapore.

ASME's president Mr Chan Chong Beng said: "We have also heard people not expanding at the moment because they are waiting for a clearer picture to come and any additional expansion could be a burden to them.

Mr Chan added: "The next alternative is to relocate to a cheaper country and we have seen companies who have relocated to Malaysia and the trend will continue because you want to survive."

This may cause retrenchment and higher unemployment among Singaporeans.

The current labour crunch faced by companies includes skilled workers.

But recent figures revealed the number of skilled foreign workers in the S Pass category, rose by some 12 per cent.

As of June this year, there were 128,000 S Pass holders, as compared to 113,900 last year. These are for workers earning at least S$2,000 a month.

The number of employment pass holders dropped by 0.4 per cent for the first half of this year.

The contraction could be due to tighter requirements such as higher minimum salary, which was introduced in January. It is possible that companies are using S Passes to bring in more junior level PMEs.

President of the Singapore Chinese Chamber of Commerce and Industry, Teo Siong Seng said the sentiments on the ground may be different.

Mr Teo said: "The real feeling on the ground, especially among my 40,000 members is that in fact they are facing a very severe manpower crunch, especially the SMEs.

"I think the government may need to release more figures as to exactly different sectors of the business industries, what are the net increase or decrease, in the work permit, in the S-Pass and also in the Employment Pass."

The Manpower Ministry said it will be taking a closer look at S Pass holders.

Chairman of Government Parliamentary Committee for Manpower Zainudin Nordin believes there is a possibility of further tightening for this group of foreign workers.

Mr Zainudin said: "If there is no progress in building productivity or building the Singapore core, then something has to be done because as long as there is still the option of and the availability of cheap labour source, people will also make that option.

"I would expect the government to tighten measures to ensure that we go towards less dependency of foreign labour because in my view, it's just not sustainable."

The government had indicated that it is on the right track in reducing dependency on foreign labour but this will take time.

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