Committee of Supply (Speech 3) by Mr Lee Yi Shyan, Minister of State for Trade & Industry and Manpower, 12 March 2010, 3:20 PM, Parliament

Mr Lee Yi Shyan, Minister of State for Trade , Industry and Manpower, Parliament

(I) INTRODUCTION

1. My Minister has laid out our plans to improve productivity and expand Continuing Education and Training (or CET), in response to the recommendations of the Economic Strategies Committee. Let me elaborate on these plans, in particular how we will be upskilling Professionals, Managers, Executives and Technicians, or PMETs.

(II) EXPANDING THE CET SYSTEM FOR PMETS

2. When WDA first started in 2003, our priority was to equip our rank-and-file workers with skills to overcome structural unemployment. Over time however, as the proportion of PMETs increased in our workforce to 52%, we clearly had to adjust our CET model to cater more to PMETs' needs.

3. 2009 was a milestone year for PMETs as far as CET is concerned. There were two key achievements:

a. We introduced an umbrella program called the "Professional Skills Programme" for PMETs. The PSP brought together the entire range of training programmes and services available to PMETs under our CET system

b. Also, from December 2008 to January this year, around 71,500 PMETs have gone for CET training. This accounts for a third of the 204,000 workers trained under CET in 2009.

4. Yet, our plan going forward is an ambitious one. In 2009, we had 50,000 PMET training places available. We want to increase this to 240,000 by 2015. This is 5 times the current 50,000 places. And this would mean 1 in 3 training places will be designed for PMETs. It is an enormous effort, but a necessary step jump.

5. Apart from quantitative changes, we are also making fundamental qualitative changes to the CET system for PMETs in 4 ways:

a. Helping PMETs acquire horizontal skills;

b. Helping PMETs deepen their professional skills and expertise;

c. Enabling PMETs to acquire new skills for new industries; and

d. Enhancing effectiveness of career services.

Let me elaborate on each of these 4 changes.

II-a) Developing Horizontal Skills for PMETs

6. First, to help PMETs develop horizontal skills (or making them more "T-shaped"), we will expand the range of such programmes available. Consider the recently introduced the WSQ Manufacturing Sales and Marketing programme. These programmes aim to equip engineers and technicians in the manufacturing sector with functional sales and marketing skills. Through a tie-up with IE Singapore, the programs will also expose them to working in different countries by way of overseas attachments. In this way, these otherwise purely technical professionals will become marketing- and sales-savvy. Being more well-rounded, they will help their companies grow by increasing companies’ top lines.

7. To expand the range of horizontal programs, we will launch a WSQ programme series in Business Management later this year. This will cover ten key horizontal skills areas including sales and marketing, negotiation, and risk management. This series will further enhance the versatility of our technical PMETs, so that they can multi-task and become more useful to their companies.

II-b) Deepening Professional Skills and Expertise

8. Next, we want to help PMETs deepen their specialist skills along certain functional areas. How do we achieve this? For functional areas that are already served by WSQ programs, we would create more vertical upgrading paths at the diploma, degree or even postgraduate-level.

9. We will target programs which are critical in ensuring our industries remain competitive. For instance, we have introduced a Graduate Diploma in Systems Analysis with NUS, and a Masters in Sustainable Building Design with the University of Nottingham.

10. Just two weeks ago, I attended the launch of two new WSQ graduate diplomas – one in Product Life Management and the other in Engineering Simulation for PMETs in the manufacturing sector. I am confident that these programs will help our engineers and manufacturing professionals deepen their capabilities.

11. Over the next few years, we will build more vertical upgrade paths for our PMETs in key growing sectors such as digital animation, human resources, aerospace, environmental technology, sustainable manufacturing and energy management.

II-c) Enabling Career Conversion to New Sectors

12. Third, we want to create more skill conversion programs for PMETs who are interested to switch to a new growth sector or industry. Sir, we have already put in place 50 conversion programs so far. They open up a whole new world of opportunities in professions such as chefs, occupational therapists, preschool teachers, social workers, hospitality managers, public relations executives, scriptwriters, designers and aircraft engineers for PMETs.

13. In 2009, about 1,700 trainees have signed up for conversion training, of which 500 of them were placed in related jobs. 200 have completed their training. I am certain the rest who are still undergoing the training will stand in good stead to switch to a new occupation of their choice.

II-d) Enhancing Career Services

14. Finally, in addition to training, some of our PMETs will also require career services that are tailored to their needs. This is especially true for those who have been in the same line for many years and need to update their understanding of the labour market or to refresh their career skills.

15. WDA, together with the Community Development Councils and e2i have launched a series of career skills workshops targeted at PMET jobseekers. The workshops covered a range of topics including resume writing, job search and interview skills. There are also recruitment events and advisory services provided by trainers or coaches.

16. Since the start of SPUR, we have reached out to about 1,100 PMETs through the career skills workshops. I’m happy to report that the response continues as the economy recovers. WDA will continue to fine-tune these services to better meet the needs of our PMETs.

17. All our efforts under the Professional Skills Programme are bearing fruit. Many PMETs have taken upgrading seriously as they see the need to stay current and relevant to the changing job market.

18. Mr Jayern Woo is 29 years old and a business development manager who holds a Mechanical Engineering degree. After working in his company for just over 2 years, he recognized the importance of upgrading himself to advance his career. He enrolled for the Precision Engineering WSQ Specialist Diploma at the Singapore Institute of Manufacturing Technology in July last year. Together with more than 30 other like-minded individuals, he has kept abreast of the latest complex technologies critical for the Precision Engineering sector.

19. We spoke to Mr Woo recently and he revealed that he truly appreciates the chance to build valuable relationships with industry experts. Keeping updated on the latest technology in the industry has also helped him be more confident when promoting his company’s services to potential clients. It is always heartening to hear how our upgrading programmes have real impact on the working experiences of our trainees.

20. Other PMETs have used the CET system to successfully switch careers. Ms Jasmine Hu was in the finance industry for twelve years and held various roles from sales, to training, to customer service and even stock trading. She was also volunteering at a special school for autistic children when she decided to further her studies and work towards becoming a lecturer in pre-school education.

21. Ms Jasmine Hu then enrolled in a conversion programme as a stepping stone. She will graduate from the programme at the end of this year and would have enjoyed government subsidies for 90% of the course fees on top of a monthly training allowance of $1,000.

22. During her pre-school attachment however, she was inspired to be closer to the ground and decided she wanted to set up her own pre-school centre instead. Not just any pre-school, but one for children with different learning needs. From the financial industry, to attending a pre-school conversion program to a budding entrepreneur dedicated to pre-school children of different learning needs, Ms Jasmine Hu's learning and development journey is an inspiring one. If she succeeds, and I am sure she will, our CET conversion program would have done more than just helping people switch jobs, but also enabled them to realise their dreams. The latest is that Ms Jasmine Hu is looking for a location to build her new school.

23. Let us take a step back and consider the larger picture. According to a survey in the US, an average worker is likely to change jobs 10 times between the ages of 18 and 38. In Singapore, our own data shows that about 1 out of every 3 workers aged 25 to 29 changed jobs within the previous two years. Among those in their 30s, about 1 out of 4 of them changed jobs in the previous two years. We operate in a globalised world where industry and therefore job requirements change at a quickened pace. Our workforce including PMETs must be on their toes in upgrading themselves.

24. In view of this, we have been developing a CET system that is responsive to our economic needs and new developments world-wide. WDA is looking into an online self-service portal, similar to the UK Skills Account, which is an online skills account that provides information on lifelong learning and individual training pathways, for individuals to help them monitor and plan their training.

25. Since the launch of CET Masterplan in 2008, we have quietly but resolutely made a commitment to life-long learning and upgrading for our workforce. While the spending in CET system accounts for only between 0.1% to 0.2% of the GDP today, compared to the 0.3% in advanced economies, we believe we have made a fundamental shift, a strategic step towards keeping our workforce relevant, current and agile. We have made a great start and we will ensure Singapore’s workforce remains the world’s most competitive, by putting in more resources for a First-class CET system.

26. The training participation rate takes into account all forms of training and education activities, including those supported or provided by companies. In view of the severe economic downturn in 2009, many individuals and companies scaled back on training. At the same time, in response to the economic recession, the Government rolled out the now well-known SPUR to help companies and workers manage the downturn and invest in skills for the recovery. We saw a larger proportion of trainees taking up government-supported courses. Without SPUR, the decline in overall resident training participation rate could have been worse.

27. Although the number of job placements between FY2007 and FY2009 increased from 16,700 to 24,000, the number of new job seekers increased even more due to the recession in 2008. With the recovering economy, we can expect the number of new job seekers to decline. But we still expect a group of job seekers who lack the skills for new jobs and will need to be trained before they can get these new jobs.

28. CET will remain affordable to workers. Today, courses under the CET system are already heavily subsidised by the Government, with up to 90% of course fees subsidised under SPUR, including selected tertiary courses. In addition, WSQ course fees can be paid on a per-module basis and some CET centres allow deferred payment arrangements on a case-by-case basis.

29. Low-wage workers can now benefit from both the Workfare Income Supplement and Workfare Training Scheme. Those who face financial difficulties can also approach our Career Centres at the CDCs or e2i, or seek assistance from NTUC and the Self-Help Groups which provide additional training subsidies under the Surrogate Employer Programme.

30. In addition, MOE has a Tuition Fee Loan scheme which includes graduate research programmes and government-subsidised coursework graduate programmes, and various banks also provide education loans. The recent announcement during the Budget Statement to enhance course fee tax relief for individuals from $3,500 to $5,500 will also be helpful.

31. In summary, there are many channels available and it is unclear that there is a further need for a Government-run loan scheme. If there is a gap, we can look into it.

32. We believe our investments in a First-Class CET system will be beneficial for this group of job seekers, and many others. But our investments cannot produce the kind of outcome we hope for if our employers and workforce don't take collective and individual ownership toward upgrading and life-long learning. I therefore appeal to all employers and workers, PMETs and others, to take full advantage of the training places made available under CET to learn, grow and to stay meaningfully employed.

(III) EMPLOYMENT DISPUTE RESOLUTION MECHANISM FOR PMES

33. I will now touch on the proposed employment dispute resolution mechanism.

34. On average, about 270 executives seek MOM's assistance each year. Close to half of them were resolved with MOM's help, while the rest sought settlement with their employers or were withdrawn. On the progress of the dispute resolution mechanism, I am pleased to report to the house that the feedback from our tripartite partners has been positive so far. Employers recognize the growing segment of PMEs and the benefits of having the tripartite partners play a role in resolving employment disputes. Unions have also expressed strong support for the mechanism as it will allow them to reach out to PME union members when employment disputes arise. In general, most agree that it will be a cost effective and speedy avenue for employment dispute resolution. We target to implement this new mechanism in 2011.

35. The ESC also suggested that we should adopt good employment practices on foreign workers. I would now like to touch on our ongoing efforts to improve foreign worker recruitment practices.

36. As part of our national productivity drive, we are emphasizing the importance of workforce training and re-skilling alongside other measures such as innovation, process re-engineering and adoption of technology. Good recruitment practices, pertaining to foreign workers, will also strengthen Singapore as an attractive destination for experienced and skilled foreign workforce, who can help us achieve productivity-driven growth.

(IV) Review of Employment Agencies Regulatory Framework

37. In the management of foreign workers, employment agents play a key role.

38. MOM treats this subject seriously. We are currently reviewing the Employment Agencies regulatory framework to improve compliance and minimise malpractices.

39. The current situation is this: the Employment Agencies Act was last amended in 1984. Since then, the number of employment agencies has increased seven-fold to just over 2,300 at the end of 2009. Low barriers to entry and a growing foreign worker population have led to more malpractices in the industry and insufficient differentiation between good and poor agencies.

40. Last year, we received 1,280 complaints from employers, foreign workers and members of the public regarding employment agency malpractices. This was an 80% increase compared to the year before. While part of the reason for the spike in errant agencies was the fact that we ramped up our enforcement efforts in the past year, we recognise that we need to strengthen our regulatory system to check on malpractices. The review of our regulatory framework aims to achieve four objectives.

41. First, we intend to update the coverage and provisions in our framework. Currently, unlicensed employment agencies merely face penalties for operating as an unlicensed agency. One of our key changes is to ensure they will be subject to employment agency regulations. Apart from imposing penalties on unlicensed employment agencies, we want to discourage any transactions between employers with any unlicensed employment agencies. By making it an offence for persons to knowingly engage an unlicensed employment agency, we intend to break the collusions involving kickbacks between employment agencies and errant employers.

42. We aim to expand the coverage of the Act to ensure that employment agency personnel will be accountable for their actions. Currently, all agencies are not restricted in who they employ to perform recruitment or placement work. To ensure all key appointment holders and staff performing recruitment or placement work are appropriately qualified, we will impose certain requirements on them, such as tests on knowledge of relevant laws. This will raise the standards and accountability of employment agency personnel.

43. We will also update the caps on fees charged by agents to employers and workers, including transfer fees, to reflect market realities.This will also make both placement and transfer fees paid to employment agencies more transparent and realistic.

44. Our second objective in the review of the employment agencies regulatory framework is to ensure adequate deterrence. This will involve increasing our penalties for some offences to impose costs that are commensurate with the large potential gains from malpractices. For example, the maximum penalty for operating an employment agency without a licence at $5,000 pales in comparison to the fees that some foreign workers pay to come to Singapore.

45. We will also expand the range of our enforcement options in order to calibrate our actions for offences of different gravities. This will include introducing the power to compound all offences and not just some of them. Suspending the operations of agencies undergoing investigations will also be an option.

46. Third, we aim to better ensure minimum service standards when employment agencies deal with employers. Minimum service standards such as being clear to employers about their refund policies are currently found in the standard service agreement that accredited agencies must use. Accreditation is mandatory for agencies that place foreign domestic workers. Since these standards are basic, they should become part of the new licensing conditions for all employment agencies.

47. Accredited agencies already use the standard employment contract that requires employers to stipulate, among others, the number of rest days per month. Zero is not an option. It also stipulates the amount of compensation the foreign domestic worker should receive, if they agree to work on their rest day. Failure to provide the agreed number of rest days or the compensation in lieu is a breach of the Work Permit conditions, as is the failure to provide adequate rest.

48. We already have the standard service agreement and standard employment contract. What is missing is a standard service agreement for employment agencies and foreign domestic workers. We agree that such a service agreement could be developed, and would help reduce downstream disputes. We could also develop a similar set of standard agreements for non-domestic foreign workers and their employers or their employment agencies. As these types of standard service agreements would have to be developed from scratch in consultation with the industry, we will consider mandating them after we have had some time to pilot and refine them.

49. Beyond making minimum service standards part of the licensing conditions, we would also encourage accreditation bodies such as the Association of Employment Agencies Singapore and Casetrust to introduce a new voluntary trust mark scheme. The objective is to differentiate the better agents by indicating the quality achievements of employment agencies to potential employers. We will be working closely with the accreditation bodies to develop the new trust mark scheme.

50. Finally, our proposed changes to the employment agencies regulatory framework will place greater onus and compliance burden on employment agencies that deal with vulnerable workers. For headhunters and executive search firms, they will continue to be managed with a light touch.

51. We can all look forward to many progressive changes to the employment agencies regulatory framework in this coming year. We hope to ensure better compliance and improve the standard of recruitment practices among employment agencies in Singapore. In doing so, Singapore will remain a choice destination for experienced and skilled foreign workers. They in turn can make valuable contributions towards our objective of developing a sustainable and a productivity-driven economy.