Less overtime for workers in manufacturing, construction

Boost in productivity and slowing demand may explain slide, say bosses and economists
By Joanna Seow, The Straits Times, 17 Aug 2015

While some may be happy to do less overtime, Bangladeshi construction worker Siddik Abu Bakar, 25, is not happy to be working shorter hours this year.

Overtime, which by law must net him at least 11/2 times the basic hourly rate, makes up a sizeable proportion of his monthly pay.

He said that without extra hours, he makes a basic salary of only $18 for a nine-hour work day.

Workers like him in the manufacturing and construction sectors have been clocking out earlier on average over the past year - their paid overtime hours a week have fallen, going by Ministry of Manpower (MOM) statistics.

Improvements to productivity and slowing demand could explain the slide, company bosses and economists told The Straits Times.

"We have been instructed by clients to invest heavily in productivity, so a lot of things we are doing are to reduce the time taken to complete jobs," said Mr Hooi Yu Koh, chief executive and managing director of engineering and construction firm Kori Holdings.

These include shifting to modular components and moving more labour-intensive activities out of Singapore. Mr Hooi estimated that paid overtime has been reduced by 5 per cent to 10 per cent.

Workers in the construction sector clocked an average of 7.3 hours of paid overtime a week in March this year, down from a high of 8.6 hours in June and December 2013.

In the manufacturing sector, the average employee worked 6.4 hours of paid overtime each week in March this year.

This was the lowest figure since June 2009 and an hour less than the highest figure since then - 71/2 hours in June 2010.

Companies manufacturing food, beverages or tobacco, as well as fabricated metal products, machinery or equipment, are some of those that posted declines.

Overtime is paid for manual workers earning up to $4,500 and office workers earning up to $2,500, according to the MOM website.

Increased productivity has helped precision engineering company PLC Industries to put a lid on overtime hours.

It had previously asked staff to work more overtime in order to meet the orders in 2013 and last year amid the labour crunch.

After installing two robotic arms this year to relieve workers of some load, it has not needed the workers to increase overtime further.

"We need to constantly cultivate productivity at our workplace in order to stay competitive," said the firm's chief executive Esmond Lim.

Dr Moh Chong Tau, president and chief executive of precision engineering firm Makino Asia, said the company has reduced the number of staff doing overtime on Saturdays from three quarters to "a handful" who go back only for urgent jobs.

Among other things, it restructured jobs so that senior workers do lighter work, he said.

Besides improved efficiencies, the challenging economic environment may have contributed to a slowdown in demand, reducing the need for overtime.

OCBC Bank economist Selena Ling said the manufacturing sector is facing sluggish external demand, while the construction sector has seen demand cool for private residential properties.

Companies could also be turning to part-time workers to manage labour costs, reducing the need for paid overtime, said Credit Suisse economist Michael Wan.

Some bosses said that changing demographics in their companies may also affect how much overtime workers are willing to do.

"When workers are younger, they tend to want more overtime, but after some years they require a more balanced lifestyle," said PLC Industries' Mr Lim.

Omni Mold general manager Simon Tan said employees from different countries may have their own preferences.

For Mr Siddik, the preference is clear. "I came to Singapore to earn money, so if I have more overtime, I can earn more."