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New rules to boost construction skills

From 2017, at least 1 in 10 Work Permit workers must be of higher skill, says DPM Tharman

With the inflow of foreign workers easing to the pace that the government wants, the policy focus is now shifting to raising the quality of these workers - starting with the construction sector.


WITH the inflow of foreign workers easing to the pace that the government wants, the policy focus is now shifting to raising the quality of these workers - starting with the construction sector.

Come Jan 1, 2017, at least one in 10 Work Permit workers on construction companies' payrolls must be higher- skilled R1 workers, Deputy Prime Minister Tharman Shanmugaratnam said on Thursday night.

A company that fails to meet this requirement won't be permitted to hire new basic skilled R2 Work Permit holders for up to 12 months, according to a media statement issued by the Building and Construction Authority (BCA) and the Ministry of Manpower (MOM).

Construction firms with at least 15 per cent R1 Work Permit workers will be exempted from the new measure.

Mr Tharman, who first indicated making such a move when he unveiled Budget 2014 early this year, said the government will also let construction firms upgrade experienced foreign construction workers to R1 status, or hire R1 workers directly from overseas.

Currently, firms can recruit only R2 Work Permit workers and they can have R1 foreign workers only by upgrading their existing R2 workers.

The new direct R1 pathway will take effect from Sept 1, 2015.

The new move to build up a pool of skilled workers and help raise the productivity of the construction sector - which has been a big drag on the national effort to boost productivity - has come after consultations with the industry, said Mr Tharman. He was speaking at the 20th Business Excellence Awards and Inaugural Singapore Productivity Awards ceremony.

To retain the pool of skilled workers, he said firms can now hire construction Work Permit workers who are at the end of their work permit period, without them having to first leave Singapore. This new measure takes effect from June 1, 2015.

This means construction firms can benefit from the experience that these workers have built up on the job here, while reducing the firms' search and hiring costs for skilled workers.

The 10 per cent R1 target is doable and, as one senior MOM official noted at a media briefing, "not onerous". About three in five construction firms already meet the minimum requirement, according to BCA and MOM. Of the rest, around 80 per cent need to upgrade just one or two of their R2 foreign workers to R1 status in the next two years to meet the new condition.

To avoid a large move all at once and to make progress in growing the overall R1 pool, Mr Tharman said the requirement has been broken into two phases: firms must upgrade 5 per cent of the workers by end-2015, and another 5 per cent by end-2016.

Construction firms can meet the requirement in three ways: recruit R1 workers directly from overseas; send their R2 workers for training and testing; or convert those with market-based skills (that is, those with a minimum of six years' local experience and earning S$1,600 monthly) to R1 workers.

Mr Tharman said by upgrading and retaining a bigger chunk of skilled workers, construction firms can enjoy lower foreign worker levies, better manage manpower costs, and stay competitive.

In his speech, the DPM said the effort to improve productivity is a major, multi-year journey aimed at transforming Singapore into an advanced economy and inclusive society. It will take time and can't be achieved in a few years.

Singapore can get to where it wants in the long haul only by taking steps each year - to spread innovations, from the early adopters to firms across an industry, to support change and by never thinking that the status quo can last, he said.

According to Mr Tharman, market restructuring is part of the answer to higher productivity. Some countries have done this quickly only because they went through a major or prolonged recession.

Singapore is not operating in crisis - and that's a good part of the reason why economic restructuring for higher productivity will take time here, he said.


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