Speech at The STF IR Seminar 2009 "Building a More Inclusive Workforce in a CBF (CHEAPER, BETTER, FASTER) Economy"
Mr Gan Kim Yong, Minister, NTUC Club, Downtown East
Mr Lim Swee Say, Secretary-General, NTUC,
Mr John De Payva, President, NTUC,
Mr Stephen Lee, President, Singapore National Employers Federation (SNEF),
Participants from the tripartite partners,
Ladies and Gentlemen,
Good morning.
Introduction
This has not been an easy year for employers, workers and Singapore as a whole. Many employers and workers have had to implement various cost-cutting measures made necessary by the global economic crisis. We had worked together to save jobs and minimize the impact of the recession.
2. This crisis has put to the test our ability and willingness to stay united to overcome adversity. Our employers, unions, workers and the government rallied together as one united front to overcome the challenges of one the most severe business downturn, and avoided the spectre of massive retrenchments and high unemployment that other economies have faced. Tripartite partnership and mutual trust were further strengthened as a result of this crisis.
Signs of economic recovery
3. There have been positive signs that the worst is over and Singapore's economy is beginning to recover. MTI has upgraded the economic growth forecast for 2009 to -2.5% to -2.0%. Even as we emerge from recession, we must step up our efforts to prepare ourselves for the long-term manpower challenges. As Brother John said in his opening address, the CBF (Cheaper, Better, Faster) economy is for all businesses and employees, not just limited to particular sectors, or workers of particular ages. It is really about building a more inclusive workforce that will serve as an engine to sustain continued growth for Singapore's CBF economy. We have to improve the productivity of our enterprises so that we can be more cost effective. We need to bring in higher value businesses and upgrade our workers' skills and knowledge so that we can be better, produce better products and provide better services. We will also have to ensure that our business environment and labour market remain flexible so that we can respond to the market faster. The CBF drive is all the more timely with Singapore's rapidly ageing population and workforce.
Re-employment for an ageing workforce
4. By 2020, just over 10 years from now, more than one in three Singapore residents will be 50 years older. At the same time, life expectancy continues to improve: Someone retiring at 62 today can expect to live for another 20 years or more. Therefore, we need to provide opportunities for workers to continue working beyond the age of 62. According to preliminary results from MOM's comprehensive mid-year Labour Force Survey, the employment rate for older residents aged 55 to 64 in Singapore is 57.2%. This is unchanged from 2008, despite the severe recession which saw the overall employment rate for those aged 25 to 64 fall from 77.0% in 2008 to 75.8% in 2009. In fact, the employment rate for older men has increased from 73.8% to 74.7%. We should press on to encourage employment of older workers, especially women.
5. If we can help more older workers stay in the workforce, it will enable them to remain active, earn a regular income, contribute to society, and better prepare for a more comfortable retirement. This will also benefit the companies as they can continue to tap on the experience and expertise of older workers as a valuable resource. For Singapore, continued employment of these workers means productive deployment of our limited manpower resources. It is a win-win-win outcome. For these reasons, we are pressing on with legislative changes to introduce re-employment of older workers by 2012.
6. To help companies adopt re-employment early, the Tripartite Implementation Workgroup, or TIWG in short, co-chaired by Alexander Melchers, released a Tripartite Advisory on the Re-employment of Older Workers in April last year. The tripartite partners have followed up by organising a series of workshops and seminars to raise employers' and workers' awareness of the Advisory. Response and feedback from employers and unions have been positive and many companies have implemented some form of re-employment to retain workers beyond the statutory retirement age of 62. According to an MOM survey done last year, more than nine in ten (94%) companies which do not specify a retirement age allow their employees to continue working past the statutory retirement age. While nearly two-thirds (65%) of companies which do stipulate a retirement age offer re-employment or allow employees to continue working beyond the statutory retirement age of 62.
Building on Tripartite Advisory
7. However, the re-employment concept is still new to many companies. Employers need more guidance on how to put in place the proper processes before the legislative changes for re-employment come into effect. To build on the Advisory, TIWG, has actively solicited feedback to better understand the challenges on the ground and studied age-friendly practices in various companies. Based on TIWG's recommendations, as well as inputs from other stakeholders, the Tripartite Committee on Employability of Older Workers that I chair has formulated a draft set of Tripartite Guidelines on Re-employment of Older Employees. I would like to thank Mr Melchers and other TIWG members for their good work and all the stakeholders for their valuable contributions in developing these Guidelines.
Release of draft Guidelines for public consultation
8. Today, we are releasing these draft Guidelines for public consultation. My colleague will share with you the Guidelines in greater detail later. The release of this set of draft Tripartite Guidelines marks a major milestone in our journey to prepare employers, unions and workers for the legislative changes that will come into effect in 2012. I encourage you to study the draft Guidelines and we welcome your feedback and views to help us refine the Guidelines.
9. We hope to finalise the Guidelines by early next year. They will serve as a reference guide to help companies understand re-employment, offer practical solutions to help them put in place the necessary systems and processes, and ultimately establish the norms for re-employment. The Guidelines will be the foundation for the legislative changes which will come into effect in 2012.
Engage early to plan for re-employment
10. Let me take this opportunity to highlight some of the key features of the Guidelines. Firstly, the guidelines provide flexibility to both employers and workers in terms of job scope and terms of employment. This will help companies retain their experienced workers and allow them to continue working beyond the retirement age.
11. One good practice is for employers and workers to engage each other early in the re-employment process. Under the draft Guidelines, companies are encouraged to discuss possible re-employment options with employees a year before re-employment. The discussion should cover the relevant training the workers may need, as well as any adjustments in job role, wage and benefits. On the part of the older workers, they need to keep their skills and expertise up-to-date and proactively participate in discussions on their re-employment plans.
12. Given the experience, expertise and good performance of older workers, employers should see them as valuable contributors to the organisation and integrate re-employment processes as part of the HR system.
Implement performance-based wage system
13. Another recommendation in the Guidelines is to implement a performance-based wage system. This is important, as employers with older workers need to remain nimble and competitive, especially given today's volatile business cycles. The re-employment of older workers, which allows for mutually agreeable adjustments in wages, will help companies implement competitive wages based on job worth, productivity and performance. Both employers and employees have to be flexible and work together to make adjustments, so as to ensure that the re-employment of older older workers does not undermine business competitiveness.
Examples of employers with positive re-employment practices
14. Let me share two examples of employers who have adopted positive re-employment practices. Mr Bean is a local brand-name in the F&B sector. More than half of its workers are aged 40 years and above. One of them, Madam Lee Yin, was 57 when she joined Mr Bean in 2003. Last year, Mr Bean promoted 62-year-old Madam Lee Yin to Team Leader, and extended her existing employment contract without any change in terms and benefits because of her excellent work performance. The company also provides re-employment counselling and advice to its workers aged 55 and above, and career counselling for its mature workers on job options for them to continue working in the company beyond the retirement age.
15. Another positive example is from the hospitality industry. Copthorne King's Hotel Singapore currently has about 85 staff aged 40 and above at different levels. This makes up 40% of their staff strength. 8 older workers aged 62 and above have also been reemployed. The management not only provides re-employment but also career counseling and looks after the medical fitness of older workers. The hotel continues to insure their older workers out of its own pocket with no age cap. They provide free annual medical check-ups to ensure that their older workers are still physically fit for their jobs. The hotel also re-designs job for older workers and provides them with a safer workplace. Where they cannot re-employ or re-deploy, the company also provides job placement assistance for them. Different companies have different needs and different challenges.
Resources for re-employment
16. There are many resources available to help employers and workers make re-employment work in their organisations. Employers can tap on the ADVANTAGE! scheme for help in hiring older workers. Started in 2005, ADVANTAGE! has seen more than 1,200 companies sign up to the programme as at end September 2009. These companies have committed to recruit over 8,000 mature workers, retain 19,000 older workers and re-employ nearly 10,000 older workers. We are reviewing the scheme to see how to make ADVANTAGE! more useful for employers implementing re-employment.
17. Employers can also go to the re-employment portal at www.re-employment.sg to refer to case studies on companies in various industries. Companies wanting to implement flexible work arrangements to make their workplace more age-friendly can tap on Flexi-Works! and WoW! Fund. Training courses such as ASME's PREPARE programme and the WSQ HR courses under SNEF can also help companies integrate re-employment into their HR systems.
18. Workers who want to enhance their employability can take up WDA's functional and skills-based training courses to continually upgrade themselves. To help get prepared for re-employment, they could look at the Seniors Employability Programmes developed by the Centre for Seniors.
Work together to make re-employment a success
19. This economic crisis, which has again put Singapore's tripartism model to the test, has demonstrated the ability and commitment of our tripartite partners to stay united to overcome adversity. As the labour market tightens along with economic recovery, companies that can leverage best what older workers can offer will push themselves ahead to establish a competitive edge. To realise this, companies should make re-employment an integral part of their HR policy as soon as possible. Just as the tripartite partners successfully managed to tackle the downturn together, I am confident that we will successfully implement re-employment to benefit employers, workers and Singapore.
20. On that note, I would like to wish you a fruitful seminar. Thank you.