According to the Economic Survey of Singapore 2012 recently released by the Ministry of Trade and Industry, Singapore's labour productivity plunged by 2.6 per cent last year. The drop pales in comparison to the 1.3 per cent increase which it enjoyed in 2011.
In fact, productivity growth has been on a decline for the last three years. The republic’s achievement of 11.1 per cent in 2010 is easily forgotten when one looks at its humble score of 1 per cent in the following year. In 2012, productivity went down by 2.4 per cent on average for the first three quarters.
It has been three years since the government started the productivity drive but the outcome has, to this point, not been positive. It is evident that firms and manufacturers have heeded the call to boost productivity. Nevertheless, it is a vicious cycle. Plans to increase productivity are countered by the challenges faced while the latter can only be solved by outlining more plans.
The conventional and most predictable method to raise output and workforce efficiency is automation. Automation allows companies to reduce manpower and time. This, in turn, is effective in countering the labour crunch. Management of manpower is especially crucial now as foreign workers will be harder to come by after the government announced plans to moderate the inflow of foreigners.
Although sectors like furniture, where majority have shifted their operations overseas, have nothing much to progress from; others such as food manufacturing still possess lots of room for improvement in the area of automation.
Industries where automation is still lacking in basically have two problems which are standing in their way. Space constraint s and budget limitations. The addition of machinery means more room is required for accommodation and they come with a hefty price tag.
Micro companies, those with revenue of less than 1 million, do not have the financial capabilities to purchase machinery. That is not to mention that these companies occupy considerably smaller areas compared to the big boys.
Moreover, these small firms only cater to the local market so there is little incentive for them to alter the way they operate. Also, they do not have many employees so there is barely any economic need to cut down the amount of staff.
There are also certain jobs which are unable to be replaced by machines. Most of these hail from the food and beverage industry where signature dishes can only be perfected with a human touch.
A feasible alternative to automation is through training and education. In the area of logistics, skills upgrading has been a common thing among companies. Numerous Workforce Skills Qualifications (WSQ) courses in the field of logistics and transportation have sprung up over the years.
In the furniture industry, there are programmes like the Furniture Industry Capability Programme which was introduced a decade ago to deal with the rising obligations of talent development to make sure that the sector continues to be viable in the long run.
Elsewhere in food manufacturing, the Singapore Food Manufacturers Association conducts cost control courses every three months in an effort to educate firms on how to increase efficiency.
However, some do need to think twice before opting to put the focus on improving the skills of their workers. Restaurants may not be able to send employees to courses on a regular basis as most are usually short-handed. The F&B circle suffered an average monthly resignation rate of 4.6 per cent in the third quarter of 2012.
For those who are fortunate to have adequate staff, there is the concern that they may end up on the losing end as workers might call it quits after receiving training. Plus, it is natural that people demand for a pay rise after their employability has been enhanced.
In recent years, another viable choice has emerged from various industries. Creativity and innovation.
In the unglamorous construction sector which suffers from an image problem, most are still not utilizing the software called Building Information Management (BIM). It is a 3D modelling programme that aids in clash verification plus construction sequencing as well as planning. If it is put to good use, the BIM will no doubt raise output in the building industry.
As for the F&B industry which experiences high amounts of job vacancies (up to 5500 in September 2012), a creative approach is to abolish service charge. Restaurants and eateries are able to boast more competitive prices and cut down on the wage bill if they move towards tipping.
A more forward-thinking proposal is to make the entire dining experience a self-serving one. Patrons place their orders electronically, take their drinks, collect utensils and crockery, get their food and clear their own tables.
In this case, the only necessary labour would be the cooks in the kitchen who receive orders electronically and the manager who is in charge of the dining area and doubles up as the sole point of contact for customers.
Although creative suggestions may sound enticing, they can only become a reality if fundamental problems are first cracked. First, there is the problem of necessary labour, jobs which must be done with a human hand or brain. Then, the reorganization of infrastructure may cause more problems than it is supposed to solve. Lastly, the lack of a dedicated human resources (HR) team to systemize processes may end up as the bottom line of low productivity.
As we can see, the goal towards increasing productivity without negatively affecting resources, workers’ welfare, clients’ interests, space etc. is a tough and enduring one. The solving of one problem may result in the emergence of a new setback. The best possible solution may be forgotten if it is deemed as too costly from (but not just) an economical point of view).
The drive to expanding productivity can be likened to Newton’s first law (Law of Inertia).
If an object experiences no net force, then its velocity is constant: the object is either at rest (if its velocity is zero), or it moves in a straight line with constant speed (if its velocity is nonzero).
Increasing efficiency is a continuous process as firms constantly face new challenges or it can be a stationary one if they choose to cross their arms and make no effort. The “net force” is ultimately what everybody is looking for. Striking a balance.
*This article was a microeconomics project of the blogger
In fact, productivity growth has been on a decline for the last three years. The republic’s achievement of 11.1 per cent in 2010 is easily forgotten when one looks at its humble score of 1 per cent in the following year. In 2012, productivity went down by 2.4 per cent on average for the first three quarters.
It has been three years since the government started the productivity drive but the outcome has, to this point, not been positive. It is evident that firms and manufacturers have heeded the call to boost productivity. Nevertheless, it is a vicious cycle. Plans to increase productivity are countered by the challenges faced while the latter can only be solved by outlining more plans.
The conventional and most predictable method to raise output and workforce efficiency is automation. Automation allows companies to reduce manpower and time. This, in turn, is effective in countering the labour crunch. Management of manpower is especially crucial now as foreign workers will be harder to come by after the government announced plans to moderate the inflow of foreigners.
Although sectors like furniture, where majority have shifted their operations overseas, have nothing much to progress from; others such as food manufacturing still possess lots of room for improvement in the area of automation.
Industries where automation is still lacking in basically have two problems which are standing in their way. Space constraint s and budget limitations. The addition of machinery means more room is required for accommodation and they come with a hefty price tag.
Micro companies, those with revenue of less than 1 million, do not have the financial capabilities to purchase machinery. That is not to mention that these companies occupy considerably smaller areas compared to the big boys.
Moreover, these small firms only cater to the local market so there is little incentive for them to alter the way they operate. Also, they do not have many employees so there is barely any economic need to cut down the amount of staff.
There are also certain jobs which are unable to be replaced by machines. Most of these hail from the food and beverage industry where signature dishes can only be perfected with a human touch.
A feasible alternative to automation is through training and education. In the area of logistics, skills upgrading has been a common thing among companies. Numerous Workforce Skills Qualifications (WSQ) courses in the field of logistics and transportation have sprung up over the years.
In the furniture industry, there are programmes like the Furniture Industry Capability Programme which was introduced a decade ago to deal with the rising obligations of talent development to make sure that the sector continues to be viable in the long run.
Elsewhere in food manufacturing, the Singapore Food Manufacturers Association conducts cost control courses every three months in an effort to educate firms on how to increase efficiency.
However, some do need to think twice before opting to put the focus on improving the skills of their workers. Restaurants may not be able to send employees to courses on a regular basis as most are usually short-handed. The F&B circle suffered an average monthly resignation rate of 4.6 per cent in the third quarter of 2012.
For those who are fortunate to have adequate staff, there is the concern that they may end up on the losing end as workers might call it quits after receiving training. Plus, it is natural that people demand for a pay rise after their employability has been enhanced.
In recent years, another viable choice has emerged from various industries. Creativity and innovation.
In the unglamorous construction sector which suffers from an image problem, most are still not utilizing the software called Building Information Management (BIM). It is a 3D modelling programme that aids in clash verification plus construction sequencing as well as planning. If it is put to good use, the BIM will no doubt raise output in the building industry.
As for the F&B industry which experiences high amounts of job vacancies (up to 5500 in September 2012), a creative approach is to abolish service charge. Restaurants and eateries are able to boast more competitive prices and cut down on the wage bill if they move towards tipping.
A more forward-thinking proposal is to make the entire dining experience a self-serving one. Patrons place their orders electronically, take their drinks, collect utensils and crockery, get their food and clear their own tables.
In this case, the only necessary labour would be the cooks in the kitchen who receive orders electronically and the manager who is in charge of the dining area and doubles up as the sole point of contact for customers.
Although creative suggestions may sound enticing, they can only become a reality if fundamental problems are first cracked. First, there is the problem of necessary labour, jobs which must be done with a human hand or brain. Then, the reorganization of infrastructure may cause more problems than it is supposed to solve. Lastly, the lack of a dedicated human resources (HR) team to systemize processes may end up as the bottom line of low productivity.
As we can see, the goal towards increasing productivity without negatively affecting resources, workers’ welfare, clients’ interests, space etc. is a tough and enduring one. The solving of one problem may result in the emergence of a new setback. The best possible solution may be forgotten if it is deemed as too costly from (but not just) an economical point of view).
The drive to expanding productivity can be likened to Newton’s first law (Law of Inertia).
If an object experiences no net force, then its velocity is constant: the object is either at rest (if its velocity is zero), or it moves in a straight line with constant speed (if its velocity is nonzero).
Increasing efficiency is a continuous process as firms constantly face new challenges or it can be a stationary one if they choose to cross their arms and make no effort. The “net force” is ultimately what everybody is looking for. Striking a balance.
*This article was a microeconomics project of the blogger
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