Improving worker welfare

THIS WEEK'S TOPIC: As a business leader, would you support moves to uplift lower-wage workers even if the measures result in higher costs for your organisation?

Pavlos Spyropoulos Chief Executive Officer Lloyd's Asia

Ensuring that our people are remunerated sufficiently to meet their most basic needs is a priority for all employers. The Singapore government is clearly giving serious consideration to what the appropriate public policy should be but businesses can also play a more proactive role in doing right by their staff and instituting their own living wage policies. One notable example which exists in the UK - of which Lloyd's is a part - is the Living Wage Foundation. This institution helps to accredit over 6,000 businesses who pay their staff the foundation's independently-calculated and recommended ''real living wage'', above and beyond a government-mandated minimum.

John Bittleston Founder and Chair Terrific Mentors International Pte Ltd

Yes for three reasons:

1) Authority everywhere is being challenged on the grounds of its competence, its risks and its rewards. Social stability demands that we deal with these challenges.

2) Raising the wages of the lowest paid is the simplest and quickest way to increase the size of the middle class. Such increase is desirable for society's economic growth. We need this as we struggle to recover from Covid-19.

3) Social fairness is well explored in a world of high-tech communications. We can no longer have spurious reasons for social injustice. They have been seen through.

As an organisation, we already increased lower-paid workers' rewards. The money for doing so comes out of our profits. We are content that it should do so.

Victor Mills Chief Executive Singapore International Chamber of Commerce

One of several silver linings from the pandemic is just how many more people now appreciate how much we all depend on the essential workers who enable our lives. It is gratifying to see how this has translated into calls for essential workers to be remunerated commensurate with the value they provide to society.

Most people are prepared to pay more for their services and enabling role. We should move ahead and achieve this for the betterment of society. Another benefit will be that more people will see essential jobs for what they are: essential and worthy of building careers in.

Lawrence Loh Director, Centre for Governance, Institutions and Organisations NUS Business School

If wage levels put an organisation out of business, any assured threshold or pathway will be a non-starter. It will be a ''lose-lose'' situation. Yet, the organisation should look at the longer term perspective - it may be able to ride out any uncertainty more than the individual worker.

Organisations, particularly for-profit companies, have a moral and social responsibility to upkeep the welfare of their employees, including paying reasonable salaries. It is not just about a fair day's wage for a fair day's work. It is about a sustainable wage system for a sustainable organisation which will lead to a ''win-win'' outcome. So, beyond minimum wages or progressive wages, we should be looking at responsible wages.

Ong Pang Thye Managing Partner KPMG in Singapore

At KPMG in Singapore, we are committed and proud to pay our people for the value they create. Beyond wages, we have also continually helped our people to advance by upskilling and training, developing through structured career pathways and connect to the diverse opportunities internally, which have also enabled transitions to more knowledge-based roles relevant for today's economy. We value our employees, and believe this approach helps to build purposeful lives and livelihoods.

Jeffery Tan Group General Counsel & Chief Sustainability Officer Jardine Cycle & Carriage

Singapore's next ''growth ring'' requires us to move beyond the simplistic goal of merely paying the lowest cost for services that are perceived to be on the lower rungs of the economic pyramid.

Instead, we should ask ourselves whether a service brings value and contributes to the overall well-being and proper functioning of our community. If this is the case, what then is the proper price tag and compensation we should place on such services, for it to remain relevant and sustainable.

If this analysis results in higher costs, we should whole heartedly support it, as this will ultimately benefit everyone in Singapore.

Choe Peng Sum Chief Executive Officer Pan Pacific Hotels Group

Singapore has adopted a progressive wage model - a ''minimum wage plus'' with a sectoral approach. It recognises the importance of raising wages of its lowest-paid workers, with consideration given to their welfare, along with the sustained competitiveness and growth of the different industries. The model should also reflect the cost of living in today's modern Singapore.

The hospitality industry is labour-intensive, and wage structures should consider the need for and appeal of different skills levels and specialisation. It will be necessary to map out the skills ladder with upskilling and job redesign, productivity growth and wage progression. Timing is important. A calibrated and balanced approach must be taken in implementation as we consider these measures in the midst of an economic downturn.

Chris J Reed Global CEO and Founder Black Marketing

No. It is self-defeating, and will lead to an increase in companies outsourcing work to other countries from the Philippines to Vietnam, South Africa to Latin America. We are no longer in a local or even regional marketplace. We are in a global marketplace. If you can do remote working for 75 per cent of jobs, that means you can employ anyone, anywhere to do that job. They do not need to be in Singapore, and no law will prevent that. A minimum wage will only lead to a decrease in local jobs, not increase. CEOs are thinking global; are government MPs?

Chia Ngiang Hong President Real Estate Developers' Association of S'pore (REDAS)

Uplifting lower-wage workers to ensure their wages are sufficient to meet basic living costs and providing a clearer pathway for skills upgrading with career/pay progression deserves greater attention.

Proactive support for this important segment of our workforce - who generally are older Singaporeans, less educated and particularly vulnerable to technological changes - through the Progressive Wage Model will ultimately benefit all sections of society and help to narrow the income gap.

Upskilling lower-wage workers and improving their welfare through job restructuring and upgrading, improved working conditions as well as better wages, will help them improve productivity and ensure better job opportunities, benefits of which will flow back to society.

The additional cost of uplifting these workers could be justified by the resultant higher productivity, service standards and workers' competitiveness, which also benefit service recipients and consumers. Above all, I believe, even if costs are slightly higher, this is a small price to pay for Singapore to become a fairer and more equitable society.

Na Boon Chong MD & Partner, Human Capital, Southeast Asia Aon

The pandemic has compelled me to reconsider my stance, ''let the market forces determine wages''. Providing floor wages, wage subsidies and training grants makes the economy resilient; increases purchasing power; and drives consumer demand.

We have learnt that resilience is as important as efficiency. The pandemic has brought into sharper focus issues such as inclusiveness, community interests, employee well-being and fairness to suppliers. It raises the question: Should businesses widen the scope of social responsibility by paying for some of the externalities?

Aon has recently formed the Work, Travel & Convene coalition with leading Singapore employers to address these issues. The aim is to help business leaders make the right decisions to protect communities, and to make the future better.

Dileep Nair Independent Director Thakral Corporation Limited

Paying workers a fair wage is a moral imperative. Companies can prosper only if they also contribute to the prosperity of society as a whole. It is disingenuous of companies to argue that they cannot afford to raise salaries of their least-paid workers. Companies must take the view that people are their most valuable assets and invest in them to raise their productivity and enhance their worth for the business.

While the Progressive Wage Model does aim to raise wages in three sectors, it is complex and bureaucratically costly to implement. Moreover, the roll-out since 2015 has been very slow. Introducing a minimum wage, on the other hand, would be across the board and administratively much simpler. It deserves a closer look. Ultimately, companies will need to wean themselves off cheap low-skilled foreign labour for our lower-wage earners to be paid fairly.

Sebastian Mueller COO & Co-Founder MING Labs

When the open and free market does not produce the conditions for workers to earn a living wage, the government needs to step in and help create a bottom. We cannot allow those without bargaining power to be without any support in wondering how to make ends meet while gainfully employed.

While a mandated minimum wage can lead to higher costs of specific goods and services, it does not necessarily present an economic detriment. Higher earnings also lead to increased spending and more opportunity. And stability in low-income households leads to better outcomes for the next generation.

Charles Reed Chief Executive Officer Royal Greyhound

I first came to Singapore in 1996 and found this country to be a vibrant breath of fresh air. Doing business in Singapore was exciting and fulfilling. The workforce was positive; people wanted to work hard. They were proud of contributing to Singapore. I am not sure if I can say the same now. Since then, the Singapore spirit has waned and been replaced with a sense of entitlement.

Any discussion of minimum wage must be done alongside productivity - just like you need two hands to clap. It is by increasing productivity that we uplift low-wage workers. This position is supported by Lee Kuan Yew, who said in his memoirs: ''The task of the leaders must be to provide or create for them a strong framework within which they can learn, work hard, be productive and be rewarded accordingly. And this is not easy to achieve.''

Jay Varman Founder / CEO Dei Holdings Pte Ltd

I believe we should definitely look into raising wages. However, we have to exercise precaution when it comes to setting minimum benchmarks. As much as organisations will have to pay for the increase in wages, at the end of the day, the cost will trickle down to the common man. The cost of goods (including food, water) will rise.

I support the progressive wage model as it allows testing and growth. So far, there has been minimum impact where it has been implemented. However, a nationwide net on minimum wage may lead to other unwanted outcomes, such as higher bus fares or maintenance fees. Are we ready to accept those price hikes?

Mark Billington Regional Director, Greater China and South-East Asia ICAEW

Encouraging more opportunities for all individuals should be of critical importance as we try to rebuild economies that have been greatly affected by the coronavirus pandemic. There is only so much any one business can do, but every action taken to promote fairness, no matter how small, will help build towards a better and more equitable tomorrow for all in our society. Companies should aim to play an active role in effecting change and creating a holistic sustainable approach towards issues such as economic inequality.

As an advocate for the UN's Sustainable Development Goals, which include promoting decent work for all and eradicating poverty, ICAEW encourages businesses to uplift workers on lower wages wherever possible. Even if it seems that this may result in higher costs in the short term, this can be offset by training those lower wage workers and improving their skills, which could end up saving the business money in the long term.

Lee Siang Chief Executive Officer Dyslexia Association of Singapore

The lower-wage staff at the Dyslexia Association of Singapore (DAS) are our Learning Centre Student Support Assistants (SSAs). They play the integral role of regularly meeting and interacting with our clients at the front counters. We value their contribution, and have ensured that they are remunerated fairly by following salary guidelines set by the National Council of Social Services.

Beyond wages, DAS also believes in continuous professional development of our staff to add value to their roles and enable them to take on greater responsibilities. We map out professional and career development pathways for our SSAs so that they can see growth opportunities for themselves within the organisation. This is important for building morale, commitment and continuity.

Maren Schweizer Director Schweizer World Pte Ltd

Legislative changes raising the minimum wage pose challenges. To remain competitive and thrive in such a new environment, companies must have enough lead time to address the effects by proactively engaging in a thorough analysis of their business operations.

The resulting increases will be challenging for companies to pass on to customers and consumers in the short term, placing strain on profitability. This strain might be exacerbated by the potential increase of input costs as suppliers seek to recoup their increased wage costs. Productivity increases will be a must for businesses. In the digital age, offshoring of data-driven business processes is a viable short-term option and a downside risk for the community.

Overall, we have to consider various scenarios and their impact on government finances, too. In any case, minimum wages should aim to address and eliminate gender gaps.

Edward Tay Chief Executive Officer Sistema Asia Capital

We see the discussion on low wage workers as a positive start towards fair remuneration to employees by businesses. For instance, essential workers who are supporting us during this pandemic should have a fair wage that reflects their importance and value in society.

As Singapore continues to advance rapidly towards a digital economy, there must be measures in place to ensure that this group does not get left behind. Uplifting the low wages should be based on the premise of rewarding them for their good work, skills and value to the organisation, and not a cost issue.

Peta Latimer Chief Executive Officer Mercer Singapore

Many countries continue to debate the benefits of a living wage. As an employer, the response is always hedged against affordability with both a short-term and long-term angle to it. With any pay equity debate, unless the cash pool is grown, you need to redistribute within a limited allocation. That poses the question of how - from top earners, from jobs deemed less valuable than previous years? Revisiting the value of jobs and analysing wage distribution should be done annually or as your business strategy changes.

For us - a consultancy that supports clients with wage distribution - the current situation has certainly sparked a rethink of the minimum value of a job and what constitutes a ''core'' job.

Separately, a living wage needs good governance and a fair baseline - who decides the cost of living and the parameters of the person receiving it? If not done holistically and in consideration of how diverse a society like Singapore is, the outcome may lead to further unintended inequality, eg basing the living wage on the traditional family unit.

Eryk Lee Chief Executive Officer AAM Advisory

At the end of the day, we need to make sure lower wage workers can cope with the rising cost of living in Singapore. According to surveys by Mercer, Singapore has one of the highest quality of living in the Asia-Pacific, and also has one of the highest cost of living.

I am fully supportive of efforts to improve the lives of everyone living in Singapore. If that means a minimum wage is needed, we should find ways to support it to help ensure that everyone is able to provide for their families and meet basic needs. Doing so will also help Singapore to continue to enjoy political stability and continue to be one of the safest cities in the world.

Toby Koh Group MD Ademco Security Group

The Progressive Wage Model (PWM) for the security industry has served the purpose well of a structured framework for upskilling and increasing wages for security officers. Wages have increased for security officers over the last decade. However, when you factor in a 12-hour work day and a six-day work week, the hourly wage is still low. On top of that, the work requirements and conditions of some security officers can be demanding and physically taxing, especially if one is an older worker.

I suggest that the authorities mandate lower work hours per day. We must target to reduce work hours to eight hours per day. The Industry Transformation Map (ITM) launched more than two years ago attempted to address some of the issues by encouraging use of more technology which will help drive productivity and wages up, while cost may remain the same, if not decrease.

However, adoption and buyers' mindset have not increased significantly. PWM and ITM are excellent initiatives, but until Ministry of Manpower abolish the overtime allowance for security officers, buyers are unlikely to change their current preference for manpower-centric security.

Adrian Tan Practice Leader PeopleStrong

Any decent business leaders who have chosen to operate in one of the world's most expensive cities to live in (according to The Economist Intelligence Unit) would have to accept that enabling a respectable wage for their low-wage workers is key to ensuring employee satisfaction and longevity with the organisation.

For too long, companies that could hire cheaper hands from overseas relegated investments in tech and tools to drive productivity. Not only do low-wage workers suffer, but that does not add significant gains to the business or industry. Forcing the hand of business may turn that situation around.

Lim Soon Hock Managing Director PLAN-B ICAG

The issue is not about minimum wage, although morally and ethically it is the right thing to do, to ensure that all workers are paid adequately to be able to afford a decent standard of living.

The larger issue is to ensure that workers enjoying a minimum wage (or through the progressive wage model) are productive, commensurate to their wage. Here, both employers and employees have a joint responsibility to ensure that the workers are adequately trained to be productive and contributing to the viability and success of a business. Costs, of which wages are a significant component, will be less of an issue when adequately matched with productivity.

Companies must resist the temptation to pass any higher costs to consumers when there is a fundamental issue of productivity to be solved in the first instance.

Mario Singh Chief Executive Officer Fullerton Markets

My answer is a resounding yes. Two reasons: Firstly, from an economic perspective, most employers would prefer lower salaries while employees would want higher pay. This can sometimes create unwanted friction between both sides. Secondly, inflation rates in Singapore have been positive 17 times out of the last 20 years, which has a knock-on effect on disposable income.

Hence, mediation by the government in the form of raising salaries for lower-wage workers is the right move. Our current model embraces a Progressive Wage Model (PWM) for the cleaning, security and landscaping industries where workers are encouraged to upskill themselves over time. Additional schemes by the government, such as Workfare, provide extra support for those who need it most.

As a business leader, even if raising salaries for lower-wage workers results in higher business costs, it gives the organisation a fairer outlook on actual expenses incurred to remain competitive and helps to strengthen our overall social compact in Singapore.

Leonard Cheong Managing Director AdNovum Singapore Pte Ltd

Employees should be paid fairly based on their skills, capabilities and competencies attuned to the labour market needs.

Continued government support for the Wage Credit Scheme (WCS) will help employers attract and employ the skilled lower-wage workers required. Likewise, the skill-future training equips these workers with the relevant skills as they seek higher wages.

The Progressive Wage Model (PWM) advocated by the government is a good model for now. PWM should be extended beyond the three sectors (cleaning, security and landscaping) to progressively include workers in essential services.

At AdNovum, we benchmark our employees' salary and benefits annually against the market to ensure that they are compensated fairly. We believe that ''happy employees will lead to happy clients and ultimately a profitable business''.

Kartik Krishnamurthy Managing Director, Asia Cornerstone OnDemand

The global wage disparity has never been so stark and the current pandemic has exposed the issue in more ways than one. Globally, the top 0.1 per cent capture more wealth than the bottom 80 per cent.

However, I do not believe just raising the minimum wage is the answer. If companies are retrenching staff, there will be no work, no salary - and so no real minimum wage - to talk about.

I believe there needs to be a balance between lifting the minimum wage and government-backed programmes for lower-wage workers during tough times. Overall, I am 100 per cent in support of moves to uplift lower-wage workers as I believe that if you take care of your staff, it will only help in improving their engagement with the company. So yes, short-term it may increase my costs; but long-term, the higher engagement will mean better services for my customers which in turn will drive more organic business growth.

David Leong Managing Director PeopleWorldwide Consulting Pte Ltd

Minimum wage is persuasive and a tug at the heartstrings of the working classes because it would seem that these minimum levels will be equal to a living wage. This is myth number one - that higher wages across the board will cause inflationary pressure on all wages and costs will run as well. Workers may be better off with increasing costs.

Second, Singapore has close to a million foreign workers on work permit and about 250,000 foreign domestic workers. About 400,000 Singaporeans received Workfare Income Supplements (WIS). This same vulnerable group of Singaporeans also received more support in the Covid budgets. These WIS and budget supplements are laser-focused on Singaporeans, and help is targeted. When minimum wage is applied, it will cut across foreigners and locals alike, and will cause wage inflation across board.

I prefer the progressive wage model with a wage ladder included to provide better pay over time with improving skills. This is technically a ''minimum-wage-plus'' with an uplift factor marked against a ladder.