Singapore companies coping with foreign labour cuts with effect from 1 July 2013

New foreign labour cuts since July 1 put even more pressure on firms here. But companies are coping. In a five-part series, The Straits Times looks at how they are doing it.

Help yourself, please

By Amelia Tan, The Straits Times, 22 Jul 2013

SOUP Restaurant executive director Wong Chi Keong admitted he would have pooh-poohed opening a self-service Chinese restaurant when he entered the food business two decades ago. To him, it was a fast-food concept.

But he changed his mind a year ago, and in March this year, the chain opened two self-service eateries - Potluck and Cafe O - in Jurong East's IMM mall.

"The rules of the game have changed. If you want to continue to play, you have to adapt," he said.

Restaurateurs have been pushed to embrace self-service because the food and beverage sector is buffeted by higher levies and stricter quotas for foreign workers.

From this month, the maximum proportion of foreigners in a service firm is 40 per cent, down from 45 per cent before - although this applies only to new hires.

To combat this squeeze, at least five restaurant groups have launched, or are in the midst of starting, manpower-light concepts.

The aim is to let workers spend less time attending to customers so they can multitask and do other tasks more efficiently.

For instance, at Potluck, which serves Chinese claypot dishes, customers make their own way to the tables instead of being led by a waitress.

Staff are freed up to clear tables and take food out from the kitchen to the tables.

Customers also order and make payments with a cashier and help themselves to cutlery, rice and drinks at a self-service station in the middle of the restaurant.

Snack chain Old Chang Kee and casual dining Han's Cafe are going one step further.

They are doing away with cashiers altogether by installing electronic ordering and payment kiosks.

Diners at Old Chang Kee's two-month-old restaurant Curry Times Tingkat at Alexandra Retail Centre, which serves curry rice dishes, pay with Nets ATM or FlashPay cards at the kiosks and collect food from the counter. The food comes in paper boxes to save time spent on washing.

Han's Cafe has plans to install these kiosks at all its 23 outlets by the middle of next year, and is looking at getting customers to clear their own tables to lighten the workload of staff.

Restaurant bosses revealed that going self-service took some convincing. This is because many of them believed that diners go to restaurants to be served.

"But the reality is if we continue using the labour-intensive model, we will be finished," said Chinese restaurant chain Paradise Group chief executive Eldwin Chua.

The group opened halal self-service nasi lemak restaurant My Nasi in Sembawang Shopping Centre two weeks ago, and will open two more by the end of the year.

Restaurants are hopeful that customers will embrace the changes - especially since the food is cheaper.

Prices have been lowered, and many do not charge for service, evidently.

For example, diners spend an average of $12 each at Potluck compared with $22 at Soup Restaurant.

Customers like software engineer Loke Ee Foong, 37, are embracing the self-service concept.

He spent about $30 when he dined with his family of three at Potluck, and said: "I find that it is value for money to eat here.

"I will definitely come back again."

Small savings in time, work can reap big dividends
By Janice Heng, The Straits Times, 23 Jul 2013

AS THE labour crunch bites, some firms are willing to do a lot to save a little manpower - shaving off a few minutes here and there in the hope that it will add up.

Take the time workers spent waiting around at construction sites for materials such as ready-mixed concrete or asphalt premix to be delivered.

To save those wasted minutes, construction firm Samwoh Corporation spent more than $300,000 fitting its 300-odd trucks with Global Positioning System units.

"We can monitor all our trucks on the road on the computer screen at any time, and hence optimise the delivery speed and reduce waiting time," said chief operating officer Ho Nyok Yong.

This way, workers could be deployed to do other work first.

As the tight labour situation persists, productivity is valuable not just to boost business but as a way to cope with staff scarcity.

The construction industry has seen its quotas or man-year entitlements slashed by 45 per cent since 2010, and levies are set to rise steadily in the next two years.

So even tasks as peripheral as clearing debris from a work site can be improved.

At the D'Leedon condominium construction site, each 36-storey block has refuse chutes with openings on every floor. Debris is thrown down these chutes into a disposal area, which builds up and must be cleared.

When this happens, all chute openings must be temporarily closed so that workers in the disposal area are not hit by debris.

Previously, workers went from floor to floor to close all the openings. Though this took only 5-1/2 minutes for each level, seven 36-storey blocks meant some 22 man-hours' work.

Earlier this year, site contractor Woh Hup hit on a solution.

When an infrared sensor detects that the disposal area is being cleared, a pneumatic tube system makes the chute covers swing shut.

Costing $6,000 per block to install, the system "saves" 2.46 men per day. This is a fraction of the 2,100 or so workers on-site each day, but every bit counts.

"This means that the two men can be tasked to perform other activities on site, which will aid in the progress of the site," said Woh Hup Workplace Safety, Health and Environmental manager Don Wilson Paua.

Construction firms are not the only ones seeking to save time and manpower. The services industry has also faced waves of foreign labour curbs in the form of higher levies and tighter quotas.

From July, the maximum proportion of foreigners in a service firm is 40 per cent, down from 45 per cent before.

The good news is that this applies to new hires, with firms not having to shed existing workers until 2015. Such lead-times have been the norm for foreign labour tightening measures - and Holiday Inn Singapore Atrium has made the most of it.

"We mapped out our people strategy more than 18 months ago," said executive assistant manager Kung Teong Wah.

Passport and credit card scanners at reception, for instance, have cut check-in times from five minutes to three.

At Royal Plaza on Scotts, even rubbish gets renewed attention. Before, two stewards would push bins up a slope to the garbage disposal - a 10-minute trudge - six to eight times a day.

But after a rail conveyor was installed, it takes five minutes and one worker to do the job.

The savings may be just five minutes each time, but general manager Patrick Fiat noted that this means 10,800 minutes a year.

"Since only one steward is required to do the job... the other employee can be deployed to cover other duties," he added.

As the labour crunch continues, saving man-hours, every micro second of it, counts.

Good service is all in the details: Labour chief
Govt fund to help firms boost service pays off with more happy customers
By Amelia Tan, The Straits Times, 23 Jul 2013

WHEN labour chief Lim Swee Say goes to Chinese restaurant Din Tai Fung, he is not eyeing its world-renowned dumplings and noodles. Instead, he looks out for the toothpicks.

They are well-designed and of good quality, he said. And in what he calls a "confession", he admits to pinching half a box during each visit.

"It's so good I can never resist," he said, while fishing for a toothpick from his pocket to illustrate his point. "They (the restaurant) really pay attention to all the finest details. Even to the small things like providing you with the toothpick.

"Many restaurants give you toothpicks but the toothpick is so big it can never go through. But this one is so fine that whatever is inside... can surely come out," he said to much laughter from the audience, made up of chief executives of food and beverage companies and reporters.

When asked, a Din Tai Fung spokesman said toothpicks are placed on tables and customers are free to use as many as they like.

Such attention to detail is the reason for a business' success, as it adds a gloss to good service, Mr Lim said on a tour of Din Tai Fung's parent company BreadTalk Group's new Tai Seng headquarters yesterday.

And it is the objective of a Government fund aimed at helping companies in sectors such as retail, food and beverage, and hospitality to improve their service standards.

Based on a survey by Spring Singapore last year, the results have been positive.

Thirty-five food and beverage companies, which tapped the Customer-Centric Initiative administered by Spring Singapore, were asked how they have benefited. The firms received grants of between $50,000 and $150,000 each.

The firms reported an average 23 per cent increase in customer satisfaction levels and a 35 per cent average increase in revenue.

Higher earnings have also helped to push up staff salaries by an average of 17 per cent for each worker.

Mr Lim said the survey also showed that good leadership and an employee-centric culture determine a company's success.

BreadTalk chairman George Quek agreed that getting workers to feel that they matter is important.

He reduced the staff training period from eight to four months at Din Tai Fung so they can start earning their full pay sooner.

Mr William Cheng, chief executive of BreadTalk's restaurant division, said the company's management also used employees' feedback to design the central kitchen at the new headquarters which opened last month.

He said: "The workers tell us where and how we should place the machines. They are doing the work, so they know best."

Mr Cheng said BreadTalk hopes to use Spring Singapore's grant to organise more training programmes for staff.

The company has already used the grant to develop a mobile application and website for customers to order pastries and cakes from the company's bakeries.

Foreign labour from new places
By Amelia Tan, The Straits Times, 24 Jul 2013

THE squeeze on foreign labour is driving companies to look for, well, more foreign labour.

But instead of pounding the same old ground overseas, restaurant and construction bosses are exploring new territories.

Due to a mix of hiring restrictions and dwindling supply, firms in Singapore have found it necessary, and useful, to recruit workers of different nationalities.

In the food and beverage sector, for instance, the trend in recent months has been to go Taiwanese.

Six restaurant groups, including Tung Lok and Jumbo, will each hire a handful of waiters and cooks from the island in the coming months, and are hoping for more.

The reason is a quirk in the ruling. There are no specific caps on Taiwanese workers because they are classified as a North Asian source, along with those from Hong Kong, Macau and South Korea. So restaurants only have to pay heed to the 40 per cent maximum proportion of foreign workers that is allowed for service firms.

In comparison, the Manpower Ministry limits the proportion of such companies' mainland Chinese work permit holders to only 8 per cent of the firm's strength.

"There isn't an additional quota for the Taiwanese. So there are slightly fewer restrictions," said Mr Eldwin Chua, chief executive of Chinese restaurant chain Paradise Group, which employs six Taiwanese workers.

But restaurants emphasised that a key reason for hiring Taiwanese is to improve service standards, said the Restaurant Association of Singapore.

Its assistant honorary secretary Wei Chan explained that the manpower crunch in restaurants has led to a vicious circle: Service standards have dropped and eateries cannot send workers for training because there are just not enough of them around.

"We hope that the workers can learn on the job by watching how the Taiwanese serve with a smile and show this genuine warmth," he said.

Taiwanese are keen to come here because of bleak job prospects at home due to a lacklustre economy, said restaurateurs.

Taiwanese waitress Chen Yea Ru, 18, who is working at Jumbo Group's steamboat restaurant Jpot, said: "I could work in a restaurant in Taipei, but I think I can learn more here because the hospitality sector seems more vibrant with the new hotels and integrated resorts."

Similarly, construction firms are venturing to new lands for workers.

They are finding it harder to attract Chinese and Indian nationals who make up the bulk of the nearly 300,000 construction workers here, along with Bangladeshis.

The Chinese and Indian workers increasingly prefer to stay at home where the economies are booming.

Construction bosses hope to make up for the expected shortfall by hiring workers from Sri Lanka and the Philippines.

They have started to recruit and train workers from these two countries and expect about 400 workers to arrive every month by October.

The two countries also offer plenty of experienced workers who have returned home from the Middle East after the property boom some five years back.

The Building and Construction Authority (BCA) is helping with the search.

It has appointed six Singapore construction companies to run eight test centres in Sri Lanka and the Philippines, where workers will undergo a training course and take a compulsory skills certification test.

Mr Neo Choon Keong, BCA's group director of manpower and strategic policy, said it is wise for Singapore to focus on attracting experienced construction workers in the long run.

"We will need fewer workers if more of them are experienced. They need less training and can start work from day one," he said.

Firms hiring more ex-offenders, disabled
By Toh Yong Chuan, The Straits Times, 25 Jul 2013

CAR workshop TyreQueen found a novel way to beat the labour shortage: Hire ex-offenders.

When it opens at Bukit Timah's Turf City in September, all of its 10 workers trained to fit tyres onto customers' cars will be former prisoners.

They are a lifesaver for workshop owner Valerie Tan who was worried that she could not hire enough local workers due to a lack of labour.

So when a church friend with experience counselling ex-convicts suggested hiring them, she said "yes" immediately.

"Without them, I would not have been able to get the new business up and running since I started planning for it three months ago," said Ms Tan who recruited them this month.

She is not the only one turning to former offenders to cope in the tight labour market due to curbs on foreign worker numbers. More companies are now tapping these unlikely pools of workers - former prisoners, the disabled and students.

The trend does not surprise human resource analyst Martin Gabriel from HRMatters21: "In a way, this is how firms are forced to adapt with the local and foreign manpower pool drying up."

This is good news for ex-offenders, with the latest statistics showing that more are getting a second chance with a new job.

In the first six months of this year alone, 1,110 found jobs with help from Singapore Corporation of Rehabilitative Enterprises, compared to 1,344 in 2009 and 1,637 in 2010, before the inflow of foreign workers was tightened.

Another group of workers - the disabled - also saw a spike in interest from employers.

Bizlink, a non-profit body which helps those with disabilities find work, said the number of firms hiring them is growing by 10 per cent annually. It now has 6,000 companies on its database.

At Holiday Inn Singapore Orchard City Centre, about one in eight of its 270 employees has disabilities and the hotel plans to hire more. By 2016, they will form 20 per cent of the hotel's staff strength, said its general manager Jagdeep Thakral.

Students working part-time are also providing a lifeline for some restaurants.

When the House of Seafood opens its fourth branch at Tanjong Katong tomorrow, four of its 12 waiters on weekends will be part-timers, two of whom are students. These students who work during weekends fill the shortage of workers when the restaurant is the busiest, owner Francis Ng told The Straits Times.

Local manpower firm TCC Solutions also saw a surge in firms hiring students this year.

The number of firms that sought to hire student part-timers grew from about 100 last year to over 150 this year.

To meet the increase in demand, the agency added 2,000 students to expand its pool of part-timers to 7,500 this year, said its general manager Frey Ng.

Member of Parliament Denise Phua said it is a "good outcome" that firms are looking to hire more ex-offenders and workers with disabilities as fewer foreigners are allowed to work here, but these workers have to be treated well.

Employers should not "exploit them and treat them as lesser second-class employees simply because they are more vulnerable and perhaps less mobile due to their special backgrounds".

"They deserve the same opportunities in terms of pay, benefits and training as typical employees."

Bosses such as TyreQueen's Ms Tan agreed. "They will be trained and paid market rate, which can be more than $2,000 each month including commission," she said.

Machines make hard work a breeze
By Janice Heng, The Straits Times, 26 Jul 2013

AS FAR back as the Industrial Revolution, workers have feared the rise of machines. But in a tight labour market, machines are more friend than foe: saving firms' bottom lines and sparing workers from unsavoury jobs.

Imagine, for instance, perching on a girder several storeys up to cut steel sheets with an abrasive saw or oxy-acetylene torch. That is how metalworking firm M Metal used to provide floor decking for construction sites. As the tough work continued, workers would tire and slow down.

But the firm's new laser-equipped robotic arm can slice away all day. Instead of three workers taking 10 minutes a sheet, only two are needed to man the machine, which cuts a sheet in under a minute.

With manpower scarce, firms are looking to machines - not just for assembly-line work, but for specific tasks too. M Metal's $300,000 robotic arm also frees up workers to work on other machines.

"We exhausted our quota, so we needed to look at automation," said managing director John Kong.

In manufacturing firms like his, foreigners can form no more than 60 per cent of the headcount.

And even as it reduces the need for workers, the robotic arm improves their jobs by eliminating the risk of cutting steel at heights.

In other cases, brute force may be all that is needed, such as in the removal of painted markings from roads and runways. Construction firm Samwoh Corporation's workers used to do this with a grinder, scraping off just 7 sq m a day.

Their new "ultra-high waterblasting equipment", which shoots a powerful water jet, literally blew away the old method.

A worker can now blast off 100 sq m of paint a day - 14 times as much as before.

At almost a million dollars, it was no small investment. But chief operating officer Ho Nyok Yong said the firm needed to ramp up productivity to cope with the tighter foreign worker policy.

Levies have been rising, while man-year entitlements (MYE) - the quota of foreign workers for each project - have been cut by 45 per cent since 2010.

Civil engineering firm Sunteq Construction, for one, is within the industry limit of seven foreign workers for every local one. But it has been hit by MYE cuts, and has just 65 foreign workers now, down from 150 last year.

So machines are helping the firm to cope. Concrete screed levellers and power trowels mean that smoothening concrete floors is quick and easy.

Preparing walls and ceiling for painting is now done with sanding machines rather than sandpaper, reducing the number of workers needed from eight to five, and raising productivity by 60 per cent.

All this cost about $30,000, half of that paid for by the Building and Construction Authority's Mechanisation Credit scheme. Said managing director Khoo Boo Sun: "It's investing for a better future. You can have fewer foreign workers, and better quality."

Machines are not just found in manufacturing and construction. Even plant nursery Far East Flora has a use for them.

Before, unsold Christmas trees were chopped up with chainsaws for disposal. Two workers, spending their entire day sawing, would take about a week to get through 300 or so trees. But in late 2011, when there were 1,000 trees, the workers complained.

"They told me it was not possible to chop all of it," recalled director Alex Cheok.

The firm then bought a $70,000 woodchipper, which can shred 1,000 trees in two days. "For long-term use, it's worth it for sure," said Mr Cheok.

Labour-strapped firms learn to do more with less
By Janice Heng, The Straits Times, 27 Jul 2013

JAPAN may be famed for its customer service, but you can also get a meal there without speaking to anyone.

At some self-service restaurants, you place your order and pay at a "vending machine" that dispenses a ticket. Pass the ticket to the kitchen staff, get in the queue, collect your food at the other end - and you're done, without having to say more than a "Thank you" to the chef.

Now, that efficient model has made its way to Singapore.

Snack chain Old Chang Kee has electronic ordering and payment kiosks at its restaurant Curry Times Tingkat, while casual dining chain Han's Cafe plans to equip all its outlets with them by the middle of next year.

The surprise, if any, is that the concept took so long to get here. But better late than never, for these restaurant chains' forays into self-service represent a broader trend: Firms have stopped fighting foreign labour cuts, and are getting on board the productivity drive in earnest.

When I began covering the labour crunch over a year ago, a common sentiment among firms was that the Government was going too far in its repeated tightening of foreign labour policy.

Give more leeway to specific sectors that need the human touch, said some.

Others simply hoped the authorities would give in and loosen the tap.

But the Government has shown no sign of letting up. Rather, it has pressed on, with levy hike after levy hike, quota cuts and criteria soon to be raised for the highest-tier Employment Pass.

Instead, it is firms which have given in, as my colleagues and I noticed while working on a series of stories this week.

Yes, some companies are admittedly still trying to tap other pools of labour, such as ex-convicts and the disabled. And this is good news for such workers, who might previously have been passed over.

But for the most part, the firms we spoke to were focused on doing more with fewer workers. Finding alternative labour sources was peripheral - as it should be.

After all, the Government's aim is to reduce Singapore's reliance not just on foreign workers, but on labour in general, with Acting Manpower Minister Tan Chuan-Jin calling for a "manpower-lean" economy.

Firms seem to have finally heard the call. From self-service concepts to powerful machines, their new investments were going towards labour-saving measures.

Granted, these efforts may have yet to show up in the numbers, which have not looked good for the productivity drive.

After 2010's stunning 11.1 per cent increase, labour productivity growth slowed to just 1.3 per cent in 2011, and even fell by 2.6 per cent last year.

But that measure of productivity is a top-line figure, given by the difference between GDP growth and employment growth.

When one looks at the situation on the ground instead, there is more reason to be optimistic.

For a start, as self-service ordering shows, many productivity measures can simply be adopted from elsewhere rather than have to be invented.

As my colleagues and I spoke to firms, it was clear that many labour-saving methods have been out there for ages - perhaps not in Singapore, but certainly somewhere in the world.

One example that did not make it into print was a hotel that microchipped its uniforms and linen to speed up the sorting process - something already being done in the United States and Britain.

And there were many examples in the construction industry, which has long been recognised as lagging behind other countries'.

There, productivity improvements could be as small as using spray paint machines instead of brushes and rollers, or sanding machines instead of sandpaper.

These are not groundbreaking innovations, just common practices that Singapore has taken too long to adopt. Now that firms are looking for solutions, they should not find the search difficult.

Another reason for optimism is that official support abounds.

The labour movement has its Inclusive Growth Programme, which co-funds productivity improvements if gains are shared.

The Government's Productivity and Innovation Credit rewards productivity spending with tax deductions or cash payouts.

And SME Centres across the island can hand-hold the smallest firms through the process.

Does more need to be done? With all these resources and infrastructure in place, perhaps only minor tweaks are required.

Some of these ideas were given at a construction industry event earlier this month by Singapore Contractors Association Limited secretary Dominic Choy.

The industry already has the Building and Construction Authority's $250 million Construction Productivity and Capability Fund.

But more equipment could be made eligible and the minimum required expenditure lowered, said Mr Choy. This would let smaller contractors tap the fund for equipment "which may cost as low as $1,000 to $2,000 but still represent a big investment for small, cash-strapped firms".

Now that the Government seems to finally be getting firms on board, what remains is to make the ride as easy as possible.