Helping Progressive Small and Medium Enterprises to Adapt and Grow in a Manpower-Lean Economy

1. Singapore’s total workforce growth is projected to slow going forward. As Small and Medium Enterprises (SMEs) collectively are a major source of employment for our workers, it is important to help them adapt to this new business environment.
2. The Ministry of Manpower (MOM) today announced the Lean Enterprise Development (LED) Scheme to help progressive SMEs transform and grow in the new manpower-lean landscape. Our objective is to support SMEs that want to be pioneers and early adopters of change: becoming more productive, more innovative, and more manpower-lean. This will help create stronger business growth, and offer better jobs and careers to Singaporeans.
3. The LED Scheme will be piloted for two years, starting from 1 October 2015. The key features are:
   
   (a) Alignment of efforts towards becoming more manpower-lean, with emphasis on a stronger Singaporean core and better quality workers
   The Government has made significant investments in helping SMEs upgrade, through programmes such as the Capability Development Grant administered by SPRING, and Enhanced iSPRINT by IDA. These schemes cover three broad areas:
   • Capability development;
   • Manpower development; and 
   • International market development.
   With the LED Scheme, we will support SMEs that are committed to:
   • Becoming more manpower-lean: Higher productivity and faster innovation is essential to achieve this.
   • Building a stronger Singaporean core: The restructuring process should result in better jobs, pay and careers for Singaporeans.
   • Developing better quality workers: Such employees, including foreign workers, should be more skilful, and have more relevant expertise and / or experience.
      
   (b)Transitional manpower support for early success
   To generate momentum for change in our SME community, we need to help pioneers and early adopters validate the business viability of transformational business models. Our tight labour market and some of our current manpower policies may hinder SMEs from this restructuring. Therefore, besides the current support schemes offered by the various agencies, MOM will exercise some temporary manpower policy adjustment during the period of transition. This is intended to support projects which will result in a stronger Singaporean core, with a smaller but higher quality pool of foreign workers as a supplement. Such initiatives include:
   • Transformation of existing businesses to reduce manpower wastage and overall reliance on foreign manpower. One way is to progressively enhance the productivity and attractiveness of jobs and careers to locals, as well as to improve the skill profile of employees. This will allow firms to cut down on the number of foreign workers required.
   • Introduction of breakthrough ideas to make industries more future-ready. Such proposals should lead to the growth of new types of manpower-lean businesses, or the major re-development of existing industries, to generate new types of jobs and careers that are more attractive to Singaporeans.
   • Transfer of advanced skills and knowledge. This should help to strengthen the capacity and capabilities of our local workforce, improve the quality of employees, and speed up the process of restructuring.
   The transitional adjustment to be granted by MOM will be tailored to the specific needs of the transformational projects. It may include the following:
   • Allow companies to cut down on the number of Work Permit Holders (WPHs) without affecting their existing quota for S Pass Holders.
   • Allow companies to have temporary foreign workers while recruiting and training locals to take on better jobs when the new business models have stabilised.
   • Allow pooling of foreign sources of expertise, such as master craftsmen, at the industry level, to help transfer know-how to the local workforce.
   Proposals should be impactful, scalable, and have the potential to transform industry practices, within a two to three year timeframe. The transitional manpower support for each SME project will be reviewed annually and renewable for up to a maximum of three years. Some illustrative examples can be found in Annex A.
   
   (c) Closer coordination and wider outreach to SMEs
   A cross-agency LED taskforce, led by SPRING and WDA¹, will build on the current efforts of the various agencies and integrate their existing assistance schemes to help SMEs in a more coordinated manner.
   
   The LED taskforce will also empower relevant industry and business bodies, such as the various SME Centres, and NTUC’s U-SME, to be outreach channels. This will enhance the two-way responsiveness between Government agencies and the SME business community, so that we can transform faster and grow better together.
   
   ELIGIBILITY CONDITIONS
4. The LED Scheme is open to progressive SMEs that want to become more manpower-lean, develop a stronger Singaporean core, and build a better quality workforce. Priority will be given to projects which have the potential to be scaled up to create transformational change for their respective industries. Proposals which involve groups of companies and / or are endorsed by the relevant industry association or union will also be given priority.
5. To submit proposals for the LED Scheme for assessment, please click here for the application form. Please fill in the application form and email to leds@mom.gov.sg. The LED Scheme will take effect from 1 Oct 2015.
   
   

¹ Other agencies involved in the taskforce include: MOM, IDA, e2i, EDB and STB.