Business, industry transformation must accompany workers’ productivity gains: Zaqy

Beyond improving each worker’s productivity directly in training, companies must also take ownership in driving wider business transformations to improve productivity, said Senior Minister of State for Manpower Zaqy Mohamad in Parliament on Wednesday (Feb 22).

“So our progressive wage moves are complemented by the industry transformation maps, or ITMs, which map out growth and transformation plans for 23 sectors across the economy,” he said.

Zaqy was responding to People’s Action Party Member of Parliament Yip Hon Weng (Yio Chu Kang SMC), who asked how the Ministry of Manpower is assisting companies that have implemented progressive wage models (PWMs) and are facing difficulties in boosting productivity.

“Businesses can find support for the transformation journeys through various government schemes, such as the Productivity Solutions Grant,” Zaqy said. “And they can also consider working with the NTUC (National Trades Union Congress) to set up Company Training Committees, or CTCs, and tap the NTUC CTC Grant, launched last year in 2022, to transform business processes, redesign jobs and improve work prospects for the workers.”

He also acknowledged that productivity-raising efforts take time, and may result in cost pressures for businesses in the immediate term.

Zaqy highlighted government schemes to help defray costs, such as the Progressive Wage Credit Scheme, enhanced in Budget 2023, and the Workfare Skills Support (WSS) Scheme.

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Addressing a supplementary question from Yip about which sectors demonstrate the greatest potential for productivity increases, Zaqy said: “All sectors with PWMs have shown potential for improvements in productivity to achieve long-term sustainability, alongside uplifting wages and wages for their lower-wage workers.”

Reiterating the need for workers, businesses and industries to transform in tandem, he said: “The outcomes vary, depending on how different companies progress and how different sectors progress.”

Businesses will move away from “lowest costs, and the maximum headcount” mindsets towards “outcome-based models”, Zaqy added.