Changing norms to raise productivity

S’pore firms ‘need mindset change’

Observers: Rethink business culture to transform economy

By Chia Yan Min, The Straits Times, 3 Mar 2014

Consumers need to change habits too

MENTION "productivity" and most think of a level of ruthless efficiency that stems from spending money on technology and employee training, but there is a less technocratic angle as well.

Deputy Prime Minister Tharman Shanmugaratnam added that extra ingredient in his Budget speech, pointing to the relatively amorphous concept of social norms.

Instead of focusing only on "dollars and cents", transforming the economy also means "changing our social norms", he said, highlighting three broad areas that could be improved.

One is that companies should develop a workplace culture where the views and contributions of employees are valued.

Society as a whole should also nurture a culture of job mastery - "we have to take pride in developing expertise and flair in every vocation, seeking not just competence but excellence".

"Doing the job well is what counts, not long hours on the job," said Mr Tharman.

Finally, consumers should change their habits to feel more at ease with self-service technologies; quality service, in other words, need not mean being constantly waited on.

Unlike investing in new technology or seeking new sources of revenue, such changes are not simply a matter of implementing new techniques and ironing out kinks.

In comparison with other developed economies around the world, it does seem like Singapore has some way to go.

In London, for instance, supermarket shoppers rarely encounter a cashier. Most checkout counters are automated and customers scan and bag their own groceries. Japan is renowned for its high- tech retail and dining concepts.

Meanwhile, countries such as Germany and Switzerland have retained their competitive edge with the help of well-honed apprenticeship programmes that turn out master tradesmen and certified professionals in different areas.

Not just cogs in a machine

NATIONAL University of Singapore sociologist Paulin Straughan said a vital element of becoming more efficient is "being able to see ourselves as part of a larger process".

"We often separate the worker from his skills because of this idea that labour is dispensable," said Dr Straughan. "When you have engaged employees who are active stakeholders, it becomes more than a job to them."

A 2012 Gallup poll of about 600 Singapore workers found the ratio of "disengaged workers" - 76 per cent - to be one of the highest in the world. Singapore fared worse than countries such as the United States (52 per cent) and Britain (57 per cent).

Similarly, the ratio of "engaged workers" here - 9 per cent - paled in comparison with the global average of 13 per cent.

Gallup's Singapore and South-east Asia manager, Mr Leong Chee Tung, wrote in The Business Times in January that research has shown employees are most productive when they can achieve "autonomy, mastery and purpose" in their work. Real cultural change happens when a company's top leaders clearly define the values and benefits of engaging with employees, he noted.

"This can only happen when leaders and managers understand deeply that any productivity or innovation returns they will gain from their investments will come from their employees."

A survey by Randstad released last week showed that 20 per cent of Singapore companies polled intend to hire more people on flexible working arrangements over the next five years, compared with 35 per cent in Australia and 39 per cent in New Zealand.

It showed that concerns about employee productivity are the biggest barrier to introducing flexible working arrangements.

Mr Michael Smith, country director of Randstad Singapore, said many employers still believe in Singapore's traditional business culture, "where job commitment is demonstrated through long hours and a culture of presenteeism - the practice of being present at one's place of work for more hours than is required".

"Business leaders need to be aware that presenteeism due to a lack of flexibility might be a bigger drain on productivity, through poor employee engagement and collaboration," he added.

Changing way of thinking

MS LIM Zhiyi, a Singaporean who spent three years studying in Tokyo, said automation and self-service in the retail and food and beverage industries are more common there, especially in lower- end establishments.

"In Tokyo, it's widely acknowledged that service labour is expensive - on a par with the wages of white-collar executive positions," said Ms Lim, 26, a consultant at a public relations agency.

Dr Straughan said consumers should not see themselves as merely purchasers of a product or service. "As consumers, we also have to understand and appreciate why changes like more automation in restaurants and supermarkets are necessary, and see the whole picture."

Consumers are "hugely adaptable" and preferences have evolved alongside technological advancements in sectors like retail and food and beverage, said Mr Aaron Boey, a member of the National Productivity and Continuing Education Council.

Mr Boey, who is also the former executive vice-president and president of commercial operations for Asia-Pacific at Levi Strauss and Co, said retailers need to understand their target customers better in order to take advantage of new retailing concepts and technologies that can help boost productivity.

Some United States department stores, for instance, are divided into "selling floors" and "non-selling floors". Products that customers usually need more help with are placed on the "selling floors", while shoppers largely serve themselves on "non-selling floors".

Retailers - including big names like Apple - are also increasingly making use of automated kiosks.

"We often think that automated retail is for low-priced, disposable items, but these machines sell a wide range of products across price ranges," said Mr Boey. "The consumer doesn't come away saying that quality of service has declined simply because the in-store experience has changed - in many cases, it's enhanced," he added.

Mr Jeremy Lim, head of Asia-Pacific health and life sciences at Oliver Wyman, noted that social norms surrounding banking have evolved dramatically, with the advent of Internet banking and ATMs before that. In the past, visits to the bank often involved long queues at branches.

"People were gently nudged forward, and I think that the same thing is going to happen as we shape consumer attitudes over time," he said.

While consumers will eventually have to learn to feel more at ease with self-service technologies, "this does not mean replacing service staff", who will have to learn how to serve customers in different ways and "redefine their whole brand of service", said Mr Boey.

Flexitime brings smiles to firm's staff

By Chia Yan Min, The Straits Times, 3 Mar 2014

EMPLOYEES at ECG Holdings can choose to spend their weekday mornings sleeping in or head to work early to avoid the peak- hour crush.

Staff at the property firm do not have fixed working hours; They are required to work 40 to 44 hours weekly but can start work any time before noon.

Chief executive Eric Cheng said he hopes the policy, implemented in January, will lead to higher levels of job satisfaction.

The firm, which also has a presence in Malaysia, Japan, Taiwan and Australia, has about 70 staff at its Singapore headquarters.

"To be fair, I have not seen an immediate drastic change in productivity levels, but I can see that staff are happier," said Mr Cheng.

"When staff are happier, hopefully that means better results."

Previously, employees were expected to work from 9am to 6.30pm, five days a week.

Mr Cheng said the company is still considering whether the new policy should be implemented in its offices in other parts of the world.

"Different cultures have different expectations and ways of working... We're trying to do this in Singapore first to see how it works out," he said.

Bar taps tech solution to labour woes

By Ivan Teo, The Straits Times, 3 Mar 2014

THE Grape & Grain bar is redefining what alcohol on tap actually means. Customers with a pre-paid card purchased at the bar can serve themselves at the push of a button on either of the two wine dispensers.

The bar in BIG Hotel Singapore in Bugis has offered the service since last October.

Mr Steven Foo, executive director of food and beverage firm The Quayside Group, which owns the Grape & Grain, believes the wine dispensers encourage customers to be more self-sufficient.

"People like the wine dispensers because they are easy to use and reduce spillage and spoilage of wine," he said. The dispensers have also halved waiting times.

The machines underscore Finance Minister Tharman Shanmugaratnam's call for consumers to be more at ease with self-service technologies and be less dependent on service staff.

It also helps Mr Foo cope with the manpower shortage as fewer service staff are needed to restock mini-bars or serve customers.

As a result, he employs two workers instead of four and saves more than $60,000 a year.

Mr Foo imported the wine dispensers from the United States at US$6,000 (S$7,600) a piece.

Craftsman bent on boosting expertise

By Chia Yan Min, The Straits Times, 3 Mar 2014

WHEN it comes to job mastery, nothing beats experience and regular skills upgrading.

Mr Ang Kian Hua, a craftsman at precision engineering company Makino Asia, has been in the industry for seven years.

The 30-year-old started out as a technician and is now studying for the Precision Engineering Master Craftsman certification, which he will complete in April.

The programme is an industry recognition scheme that aims to elevate standards of craftsmanship.

"This will help me advance further in my career," said Mr Ang, a father of a one-year-old boy.

His job scope and responsibilities have grown with his years of experience with the company.

As a fresh graduate from the Institute of Technical Education, Mr Ang was in charge of troubleshooting and programming a highly precise machine that manufactures machine parts.

He now oversees three such machines and guides his colleagues in their use.

"It's especially important to constantly upgrade yourself in this industry... Things keep changing. There are new machines, and we have to learn different types of skills," said Mr Ang.

Taking up the service challenge

Changing norms about good service and improving service quality will take time, say restaurateurs

By Eunice Quek, The Sunday Times, 2 Mar 2014

Getting diners to change their service expectations in restaurants might be one way to grapple with the manpower crunch, but restaurateurs said it would be an uphill task because many Singapore diners expect full table service.

They also said that it is not impossible to provide the niceties that Singapore diners have come to expect when they eat out but it would take time for service standard to reach the levels in Europe and the United States.

Some are already working towards the vision that Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam articulated in his recent Budget speech.

He wanted restaurants and cafes to be more like those in Europe or the US, which operate with fewer staff, each with more responsibility and better pay, and "where customers treat staff with respect and the staff wear their uniforms with pride".

He also said that quality service comes in many forms and need not mean having service staff constantly waiting on consumers.

Responding to this, restaurateurs, hotel operators and culinary schools told SundayLife! that while this is not impossible, it will take time, especially when the food and beverage scene here is facing a severe manpower crunch due to government regulations restricting the hiring of foreign workers.

They added that Singapore diners expect full table service.

Ms Cynthia Chua, founder of the Spa Esprit Group, which owns several food and beverage outlets such as Skinny Pizza, Tiong Bahru Bakery, 40 Hands cafe and House, called it a Catch-22 situation.

She says: "It is difficult to cut down on manpower when consumers have high expectations. And if you are constantly at the beck and call of people, you won't be proud of your job. There needs to be give and take, and customers need to be more patient."

At its casual cafes such as Tiong Bahru Bakery and 40 Hands which do not levy the 10 per cent service charge, she said diners are still waving to the staff when they want their water glasses topped up.

"It's ingrained in diners to expect full table service," she said.

Agreeing, Mr Philippe Pau, director of Bistro du Vin, said: "The current lack of full-time waiters requires us to rely on part-timers who are less experienced. Most of our time is spent on training them. We can increase wages, but the current staff crunch is already driving salaries higher and higher. The transition to have fewer employees and increased responsibility will take a minimum of two years."

Mr Yuan Oeij, chairman of the Prive Group which runs restaurants such as Wolf, Roadhouse and The Green Door, brought up the example of Bistro Moncur in Sydney. When he dined there in 2007, there were only four waiters serving a full house of 100 diners.

"All their movements were graceful, precise and very efficient," he said. "They had a strong awareness of what was going on while carrying out their multiple tasks."

He noted that local servers here may not be exposed to what he terms "great service", which their counterparts in Australia, the US or Europe provide. Waiters there are also valued for their skills.

Mr Oeij said: "To have a system like those in the US or Europe where you have great friendly service and fewer, but higher-paid servers performing a lot of tasks is going to be extremely difficult. It involves changing the whole tipping culture and how service charge is practised in Singapore."

Besides monetary incentives for staff, he is looking to focus on quick-service concepts in the restaurant group that would require fewer staff to serve customers.

Mr Adrian Tan, group manager of Peperoni Pizzeria, highlighted a difference in culture. "Casual restaurants experience a faster flow and turnover rate. While guests at fine-dining restaurants tend to take their time to wine and dine, guests at casual outlets tend to eat faster," he said.

"In Europe, a dinner can last for three hours and restaurants usually have very few staff, who multi-task. The staff are not expected to be at the beck and call of guests all the time as the guests prefer to take their time to eat and enjoy their meal."

At hotels, negotiating manpower has added complications, with various departments such as housekeeping to factor in as well.

At Orchard Hotel, responsibilities for the food and beverage sections would include serving dishes course by course.

Those who hold banquets at the hotel are also required to pay more if their events require additional staff.

Mr Riaz Mahmood, 51, the hotel's general manager, said: "The usual service ratio is two staff serving three tables and one beverage server to three tables. For requests to allocate additional staff, there is a charge of $100 for every extra service staff throughout the event, from pre-event cocktails to the end of the event."

But he also pointed out concerns with having fewer staff take on bigger respon- sibilities.

"In the long run, it may affect service levels. One individual might be able to do more, but not all at once. Such a prolonged situation may cause our employees to be overworked and thus compromise their work-life balance."

While the challenges seem daunting, some employers are working their way around the issue.

Mr Andrew Ing, chief operating officer of The Lo and Behold Group, which owns restaurants such as Extra Virgin Pizza, The White Rabbit and The Black Swan, offers higher salaries for service staff with at least four years' experience.

He said senior service staff who are called assistant managers do not manage or do any administration work. They get an assistant manager's pay but continue to serve customers because that is what they are good at.

"We can have fewer staff and fewer headaches because they are the best. This also motivates the junior staff to work harder to get a higher salary once they are managers," he added.

Others turn to using automation in their restaurants. Mr Tharman cited the example of Japanese restaurant chain Genki Sushi, which reduced the number of staff serving tables by about 85 per cent and cut waiting times for orders by half.

Pacific Marketplace at the Pan Pacific Singapore uses iPad menus and is looking to introduce an automated system of food ordering.

Instead of using iPads, restaurants such as casual restaurant chain Manhattan Fish Market get customers to place their order through an order form, as well as pay at the cashier, so that waiters do not have to deliver bills to the table.

Similarly, at ramen restaurant chain Ramen Keisuke, diners also tick their meal options on a form, which helps to minimise the chance of waiters making errors.

Mr Nobuyasu Sato, 43, director of Ramen Keisuke Tokyo, said: "It helps to cut down on manpower and most importantly, is efficient and avoids any miscommunication. So there are fewer mistakes and fewer complaints."

In Japan, diners order ramen via vending machines but he does not intend to implement this here as "communication is very important".

Moving forward, culinary schools said they are working to turn out the kind of service staff that Mr Tharman said Singapore should have.

All the schools include service training in their curriculum.

Ms Eve Felder, managing director of The Culinary Institute of America, said key lessons include beverage and wine service, setting and clearing of tables, menu engineering, organisation of service crew, taking orders, speaking clearly and articulating appropriately, among many other lessons for both formal and casual settings.

The institute started training students in 1946 when it was established in the United States. It opened its first overseas campus here at Temasek Polytechnic three years ago, in partnership with the Singapore Institute of Technology.

Ms Felder said the "rewards" of training and education in hospitality will be reaped in years to come.

She said: "In Singapore, as it was in the United States 20 to 30 years ago, the food and beverage industry - including service - is not valued as a career.

"As the industry matured and more restaurants opened and food manufacturing grew, career opportunities expanded.

"It took a while, particularly for parents, to understand that working in the food industry could be a professional career choice. Now, of course, we have seen more and more food-related jobs opening up."

She also said that the launch of the Food Network cable channel, an Asian version of which is available here, gave the public greater insight into the complexities of the hospitality and food and beverage industry.

"While the primary focus of television is entertainment, the Food Network has helped to increase interest in our industry," she said.

Good service is more than just table service, noted Mr Alvin Goh, deputy director of culinary arts at ITE College West.

He said: "In fine-dining, customers would expect service staff to have good product knowledge, make recommendations, explain the menu and exercise flexibility in service. Yet, service staff must be emotionally connected to guests because everyone has different needs.

"If you have a couple on a romantic evening out at a fine-dining restaurant, then as a service staff, you need to be discreet and non-intrusive with your service. In this case, perhaps less service is more."

Over at Shatec hospitality school, the finer aspects of service are covered in the subject, Fundamentals of Hospitality Hosting, which is part of all its diploma level programmes.

Ms Margaret Heng, 53, chief executive of Shatec, said: "Students are immersed in role-playing and simulation exercises based on actual workplace scenarios.

"Some topics covered include the importance of positive attitudes and the art of being a gracious host. I look forward to the day when quality service is synonymous with the Singapore service industry."

Are diners ready to get their own water?

By Eunice Quek, The Sunday Times, 2 Mar 2014

Cut out the 10 per cent service charge and diners say they are willing to help themselves to water, order, pay at the counter and even collect their own food, they told SundayLife!

Straits Times readers who responded to a call for views on the subject, posted on the paper's Facebook page, agreed, with most saying they were happy with self-service.

But this applies only to casual restaurants, they added, saying that the more expensive the bill, the more they expect from wait staff.

Mr Andrew Lau, 40, a senior engineer, said: "It depends on where I'm dining at. I have no issue collecting drinks or food in a casual cafe.

"But I definitely expect full service at a fine-dining restaurant. The experience of eating at posh restaurants is what I'm paying for too. I expect servers to be polite and have good knowledge of the menu."

Helping herself to water has never been an issue for sales assistant Janice Yeo, 25. "I'm perfectly fine pouring my own water. In fact, it's easier for me when I'm eating out with my friends, instead of having to constantly ask a waiter for service. It's best if they just put a jug in front of us and we can help ourselves," she said.

But freelance designer Agnes Ong, 32, draws the line at collecting her own food.

She said: "I don't mind pouring my own water and paying at the cashier's counter. But I'm not too keen on collecting my own food, even if I'm not paying service charge. It feels like I'm at a fast-food restaurant or school canteen."

Using iPads to order food may not be a hit with diners either.

Housewife Celine Lim, 54, said: "I'm not sure if using iPads for ordering is the best idea for customers. It helps the waiter process the orders quickly, but sometimes, I'm not sure how to use the system.

"I'll end up having to call the waiter to help me anyway and that probably wastes more time for them. I also prefer to ask the waiters to recommend dishes."

However, retired taxi driver David Tan, 63, said he has learnt to adjust his expectations.

"In the past, I used to get frustrated when I didn't get proper service from waiters who were too slow," he said. "But over the years, I've realised that there needs to be a compromise. It won't kill me to take my own water. It makes the waiter happy and I also don't ruin my own dining experience."

Productivity challenge stumps builders
Staffing problems, lack of incentive to innovate, higher levies among issues
By Cheryl Ong, The Straits Times, 1 Mar 2014

BUILDERS are used to meeting complex challenges - just look at the Marina Bay Sands or any MRT station - but lifting productivity in the construction sector seems to stump them at every turn.

It is not for want of trying, however, or due to a lack of incentives - whether carrot or stick - from the Government.

Deeper issues that have made productivity gains hard to achieve remain, said industry players.

Bosses cite the extra costs of implementing new building methods, the advantages giant overseas construction firms have when it comes to tackling big jobs and the never-ending struggle to get skilled staff, whether foreign or local. They also want more time to adjust to the economy's restructuring push.

An extra push came in last week's Budget, with requirements for more efficient building designs and construction methods as well as the use of prefabricated components in state land tenders.

Foreign-worker policies were further tweaked to help firms retain valuable higher skilled workers or upgrade lower skilled staff.

"This is good because it's a pity that when workers are trained till they are skilled enough, they have to leave. It's tough for the firm because we have to start retraining new ones after that," said Mr Eric Ng, executive director of Logistics Holdings, a main contractor for public projects. Higher constructability scores - building standards that measure how far labour-efficient building methods are adopted - also mean that firms will be forced to look at more advanced technologies to speed up the construction process, Mr Ng said.

However, the Government also pressed on with its campaign to tighten foreign-worker inflows. Monthly levies for lower skilled workers - now $450 and already due to hit $600 from July 1, 2015 - will rise to $700 on July 1, 2016.

This comes on top of additional measures introduced in past Budgets, such as imposing cuts to the number of foreign workers allowed for a project. But the many levy increases have not delivered a better report card with labour productivity falling 2.9 per cent last year, down from a 0.1 per cent gain recorded in 2012.

Structural problems

MUCH of the sector's staffing problems stem from the Singaporean aversion to construction work. With locals reluctant to get their hands dirty and construction costs rising, firms turned to cheap foreign labour, particularly when the industry began to boom in the 1980s, said Singapore Business Federation chief executive Ho Meng Kit.
That was also when tunnelling work for the Circle and North East MRT lines began and construction of the Westin Stamford Hotel got under way.

The number of foreign workers shot up again when key projects like Marina Bay Sands and Resorts World Sentosa were started in 2007, said CIMB regional economist Song Seng Wun.

There were $24.5 billion worth of building contracts awarded that year, up 46.6 per cent on 2006. This soared by a further 45.6 per cent to $35.7 billion in 2008. Employment numbers went through the roof as well: from 254,600 in 2006 to 294,900 in 2007 and a spike to 360,200 in 2008. There are now 469,500 employed in the sector.

The construction sector also contributed $15.2 billion to last year's gross domestic product of $370 billion, accounting for 4.1 per cent of the economy.

"The construction sector's heavy dependence on manpower causes it to lag behind," said Dr Randolph Tan, associate professor at SIM University's Centre for Applied Research.

Mr Song added: "All these years, they've just been so used to having so many foreign workers on call until now. So this is where the adjustment becomes far more abrupt."

Putting in more capital

ALTHOUGH firms have been pushed to mechanise and train higher skilled workers, the sector's low margins remain a barrier to investment in innovation.

"Contractors don't have this budget to pay (for innovation)," said construction director Jeffrey Teo of Lian Beng Construction.

"Even then you must have the project to invest for; I can't just buy (machines) and stock up."

And unlike manufacturing, construction is not based on straightforward replication, said Dr Tan, adding: "So any technology may not be easily re-used."

That the big contracts for MRT lines are awarded to large foreign players gives local firms even less incentive to invest. "If you innovate but can't get jobs, it would take a long time to recover your costs," noted Mr Daniel Or, executive director of OKP Holdings.

Mr Ng of Logistics Holdings said: "In a way, we're not given a chance to show what we're capable of, and so why should I spend so much to invest in high-tech equipment."

Some firms also noted that local players just do not have the financial prowess to undertake the projects won by foreign competitors. The industry is also young given Singapore's development only started in the 1960s, said Mr Or, and it was only in the past 10 to 15 years that more complex projects came on the scene.

"Foreign players... usually have an advantage because they have built up to a larger size beginning with their own countries," added Dr Tan. "Their larger size enables them to exploit the significant economies of scale that a large-scale project entails. This is something smaller local economies cannot do."

What next?

BUT Mr Teo Han Jo, partner (building sector) at KPMG Singapore, said local companies may find it challenging to renew themselves as young Singaporeans are hesitant to get their hands dirty.

It is common, for example, to hear of aspiring civil or industrial engineers becoming financial engineers instead, thanks to the prospect of fatter pay cheques, said Mr Song. In contrast, apprenticeships in countries like Australia develop the expertise of young talent early, said developer Lend Lease.

"With these qualified and experienced tradesmen, fewer workers are required on sites. We are currently exploring opportunities to introduce similar programmes in our Asian business," said Mr Stuart Mendel, managing director of project management and construction, Lend Lease Asia.

It is a similar situation in Hong Kong, where foreign workers are barred from the construction industry. It takes four to six days to complete one storey in a typical high-rise building in Hong Kong, but eight to 12 days in Singapore.

The key difference is that local construction workers in Hong Kong are paid four times more than foreign workers, estimated Dr Ho Nyok Yong, president of the Singapore Contractors Association, although he added that foreign workers here do not have to pay for their accommodation.

Family-owned firms that rely heavily on the next generation to keep running suffer and are the slowest to innovate as a result as their founders could well be ready for retirement, said Lian Beng's Mr Teo. "They need a lot of encouragement to adopt new technologies, they don't have the good staff to be innovative that way."

To stay in the business, firms are likely to consolidate to keep up with the Government's productivity campaign, especially if standards are set higher, said Mr Kevin Scully, executive chairman of finance house NRA Capital, who has analysed construction firms for over 30 years. "They have to team up with joint venture partners, then they'll be able to import the technology and keep on being relevant."

While the industry seems far off from Singapore's target of increasing labour productivity by an average of 2 per cent to 3 per cent each year until 2020, more time - not just levies - is still needed to change the industry's mindset.

"Fixing the problem is not impossible, but it will probably take a combination of time, mindset changes and 'tough love'," said Ms Selena Ling, head of treasury research and strategy at OCBC Bank. But the consolation is that there is still an abundance of building contracts to be won - $31 billion to $38 billion this year, according to the Building and Construction Authority's forecast.

"Inevitably adjustments mean that some will fail, but as long as the economy creates enough opportunity for growth, that's the plus," said Mr Song. "It depends on how you take advantage of it."