Construction firms offer pay hikes to skilled workers

Wages have risen over past 2 years as supply from China, India dries up

By Amelia Tan, The Straits Times, 9 Sep 2013

CONSTRUCTION firms are offering pay rises of up to 20 per cent to retain and attract experienced workers amid the labour crunch, and activists are cheering the hike.

Until about two years ago, wages in the sector had been stagnant with most workers earning just $500 a month, regardless of their experience.

It has since been bumped up to about $800 monthly for those who have toiled for four years, and is further rising to $1,000 with the latest jump.

"The thinking a few years ago was: 'If you want a job, take it. If not, I will find someone else who will want to do it.' But firms cannot afford to do this now," said Yang Seng Engineering senior manager Richmon Ng.

The reason is the drying up of the China and India supply pool.

Workers from the two countries, along with Bangladeshis, make up the bulk of the nearly 300,000 construction workers here. But Chinese and Indian nationals are now preferring to stay at home where the economies are booming.

The Building and Construction Authority (BCA) here has been trying to ease the shortage by tapping new sources. It recently helped firms to recruit experienced workers from Sri Lanka and the Philippines.

But higher pay is still the best weapon to combat the labour shortage.

"In the past, employers did not feel the need to increase pay because workers could be easily replaced since there was a ready supply," said activist John Gee of migrant workers group Transient Workers Count Too.

Not any more. Construction firms now raise salaries when seasoned workers renew their contracts. Top performers also get a bonus of one month's pay, according to 10 firms which The Straits Times spoke to.

Bosses said that experienced workers are crucial in helping them tackle the labour crunch, as they are more productive and need less supervision.

Seasoned hands also mean lower levies for firms. They pay less to the Government when they hire workers who have been in Singapore for at least four years and have gone for skills upgrading courses and tests offered by the BCA. This is to encourage companies to upgrade the workers' skills and retain talent.

Firms such as Fonda Global Engineering, for instance, are even giving workers a further 10 per cent pay rise when they pass the tests.

"The raise is our way of motivating them to pass the test and to encourage them to stay on to work for us," said the firm's director Melvin Ong.

Employers pay $300 or $600 in monthly levies for higher-skilled workers. The monthly levy for basic-skilled workers, who are relatively new to Singapore and have not gone for the upgrading courses, is $450 or $750.

Lower levies help maintain the bottom line to some extent, said construction bosses. However, they added that overall labour costs have still gone up.

So far, firms said they have been absorbing the costs of salary rises, reducing their profit margins.

But this is "not sustainable", said the president of the Singapore Contractors Association, Dr Ho Nyok Yong.

Although companies are currently placing low bids to win tenders for construction projects, he expects the tender offers to rise by 10 per cent to 15 per cent due to higher labour and operating costs.

Regardless of whether tender prices go up, bosses predict that salaries will soar as the race to get the best workers continues.

To buttress the spike, Mr Andy Goh, chief financial officer of Sysma Holdings, believes the long-term solution is to keep workers happy and loyal to firms.

"Pay is the No. 1 consideration for the workers, but other things like respect and giving them a choice in the type of work they like to do is important in building loyalty," he said.

Working for the same boss for 17 years

By Amelia Tan, The Straits Times, 9 Sep 2013

BANGLADESHI construction worker Abdul Latif, 38, has been working for the same company for 17 years and has no plans to job hop.

Over the years, his salary has more than trebled from about $500 a month to $1,800 now.

He is also a site supervisor and has seven certificates for the skills upgrading courses that his employer Fonda Global Engineering has paid for him to attend over the years.

Mr Abdul says he has turned down several job offers from other companies offering salary increases.

"Other bosses may not be as good as my boss," said Mr Abdul. "He trusts me and the workers feel like my family."

Long-serving construction workers told The Straits Times that good pay motivates them to stay on with a firm.

But other factors such as being able to attend training courses and having supervisors who care for them are important too.

Bangladeshi Anwar Hossain, 30, who has worked for Fonda for seven years, said his supervisors had no qualms about giving him an advance on his salary of about $1,000 a few times when his family needed the money urgently.

"My boss said: 'No problem. You take the money and take care of your family first.' That made me happy," said the father of a seven-month-old boy.

For Mr Fakhrul Islam, 31, another Bangladeshi who has worked for Fonda for seven years, perks such as free plane tickets home every three years and bonuses for good performance have made him stay on with the company.

Fonda's director Melvin Ong said: "We cannot stop workers from finding better opportunities. But I believe if you treat workers well, they will be loyal."