Wage rise not only criterion to judge worker outcomes in grant funding

Singapore

WAGE increases will not be the only criterion to judge worker outcomes tied to grant funding, Senior Minister of State for Trade and Industry Koh Poh Koon told the media on Wednesday.

"Enterprise Singapore will take a flexible approach on a one-to-one basis to understand the companies' needs and help them to scope the kind of workers' outcomes that will be relevant for them," he said.

From April 1, 2020, the labour movement's Inclusive Growth Programme - which supports firms making productivity changes provided they share these gains with workers through higher wages - will be merged with the Enterprise Development Grant (EDG), which is currently run by Enterprise Singapore. With this move, funding support from the EDG will be contingent on the "fulfilment of worker outcomes".

However, such outcomes are not limited to wage increases, and could also take the form of job redesign to aid older workers, or a more conducive working environment, Dr Koh said on Wednesday at the sidelines of the 14th LNG (Liquefied Natural Gas) Supplies for Asian Markets Conference at Sentosa Cove.

Dr Koh's comments follow earlier feedback from companies that linking grants to worker outcomes could backfire. In an article published by The Business Times on Tuesday, business leaders told BT that the move may add to business costs without surety that profits will go up. This could make Singapore less competitive in the long term.

Dr Koh explained that the additional requirement of workers' outcomes is aimed at making companies undergo "deep transformation" rather than a superficial one, and ensure that workers are taken along the transformation journey.

"Building capability is not about just buying technology, but really building the capacity of the workforce to continue to be able to adopt new technology and new workflows."

If companies focus only on technology and not on training, the capability of their workforce could then become a bottleneck, he added.

Nonetheless, understanding that companies differ in their needs, the demographic profiles of their workers, and their strategic focus, Enterprise Singapore will work with firms to arrive at appropriate worker outcome targets and milestones.

Firms could face issues in meeting targets if market conditions change or unanticipated challenges arise, Dr Koh acknowledged: "So I think these are things we will take into account."

He also noted that the EDG's 70 per cent funding support level has been extended to March 31, 2023, three years beyond the original expiry date, after which it will fall to 50 per cent. This extension signals the government's commitment to continue working with firms on this journey and consolidate the productivity gains of the last three years, he said.

The ministry will be engaging firms and trade associations and chambers through dialogues to get their feedback on the Budget measures, he added.