Speech by SMS Lee Yi Shyan at the Singapore Contractors Association Limited Human Resource Forum
Apr 15, 2015
Ladies and gentlemen
Good morning! Thanks for inviting me to join you for this inaugural HR Forum by SCAL and partners.
The HR factor
1. Yesterday, MTI announced that the Singapore economy grew by 2.1% in the first quarter of 2015, based on advanced estimates. The construction sector was amongst the fastest growing – growing at 3.3%.
2. In fact, as we look at the medium term, our construction industry is projected to enjoy a healthy pipeline of public sector infrastructure projects. Our built industry should therefore take full advantage of this steady and benign environment to restructure, innovate and raise productivity.
3. Speaking of productivity and innovation, we often talk about technology and machinery. They are tools and we must not forget the importance of the roles of workers in creating values and raising productivities. In fact, most studies show that it is the human resource that differentiates a winner from the mediocre. When I launched the BCA’s five-year Rebranding Roadmap for the built industry last year, strengthening HR practices was identified as one of the key initiatives. I am therefore happy to commend SCAL for taking the lead in urging members to adopt HR best practices and organising this HR forum to share and learn from one another. I urge more firms to step forward and pledge their commitment to make the built industry a workplace of choice for job seekers.
Limited Workforce Growth
4. Currently, our construction industry employs about 323,000 workers, excluding PMETs. Realistically, we cannot expect this pool to grow continuously given that our national workforce is only growing at 2.5%. It is thus important for the industry to discuss the best way forward in harnessing the pool of limited human resources we have. Our sources of productivity improvement must come from a high quality workforce supported by advanced equipment and technology. To this end, BCA has been partnering the industry to attract locals into the sector through a comprehensive suite of scholarship and sponsorship programmes. BCA has also expanded this suite of programmes from the undergraduate programmes offered initially to the Diploma and ITE levels. I am pleased to share that BCA is further enhancing these programmes under the 2nd Construction Productivity Roadmap to provide more competency-based progression pathways and support part-time upgrading of in-service personnel.
Quality workforce
5. Benchmark studies show that productivity in our construction industry, in terms of value added per employee, is about 47% of the US and 48% of Japan – so it is about half of the US and Japan. This means that if we are as productive as the Japanese, for example, we should be able to generate double the amount of output with our current workforce. Or, putting it the other way around, if we are producing the current level of output, we would only need half the workforce, if they were all Japanese.
6. So herein lie the questions. How do we level up our labour productivity? How do we upskill our workers? Can they be trained to be specialists? Can they be trained to multi-task? How can we re-align our processes to support multi-tasking? How do we create upgrading paths for career development, and enhance the appeal of the industry to job seekers? Can we future-proof our construction workforce? These are many questions in human resource development that we have to find answers.
Taking a leaf from Japan
7. Best practices elsewhere give us some clues for good HR practices. In Japan, companies commonly provide education and training to their employees. Employees and fresh hires are given on-the-job training and internal rotation throughout their career. Companies benefit from a workforce that is all-rounded. Employees benefit from opportunities to learn new skills. They are also more motivated and loyal because they appreciate employers who are interested in their personal career development.
8. Obayashi Corporation for instance, runs an ‘Obayashi Excellent Supervisor Certification Program’. It is to certify and recognise exceptional excellence of site supervisors. Obayashi also works to create a people-centred workplace which is conducive and pleasant for all employees, whether young or old, male or female.
9. Another example is Takenaka Corporation. Training at Takenaka is competency based and structured in stages to progressively develop their employees in different professions. Their HR development programmes are deliberate and systematic.
Absorbing best practices
10. There are many best practices around the world. But the most important thing that can happen to us is our willingness and ability to adapt these best practices in our own firms. I am happy to note that some of our local construction companies already have developed progressive HR practices.
Upskilling our workforce
11. Earlier on I spoke about the need to improve the skill profile of our 323,000 construction workforce. At the macro level, we hope to see an industry workforce profile that comprises 30% R1 workers and 70% R2 workers. In fact I think this 30/70 split can be further enhanced, maybe to 40/60 or 50/50 in the longer time horizon. This contrasts with 2014’s 19% R1 and 81% R2. Now it is about 20/80. To achieve this qualitative change, the Government has introduced policy measures such as reduced levy for R1 and increased levy for R2 to tilt the balance of attractiveness between R1 and R2 workers.
12. In addition, BCA has worked with MOM to introduce various upgrading pathways, such as the CoreTrade scheme, the Multi-skilling scheme and the market-based skills framework.
13. From September this year, we will also implement the new Direct R1 pathway to allow firms to bring in better quality workers from overseas and also, to upgrade their better existing workers. This was really in response to a suggestion by SCAL.
14. Furthermore, the Government is also helping the industry to retain experienced and skilled workers. Last year, in response to SCAL’s feedback, we increased the maximum allowable period of employment for the higher-skilled R1 workers from 18 years to 22 years. Come 2017, MOM will require all firms to employ at least 10% R1 workers among their work permit holders.
The way forward
15. The measures that I have just mentioned are but some of the programmes and initiatives that we have put in place to effect a mind-set change in the industry, particularly in the human resource policies. Our goal is to groom a highly-trained workforce by adopting effective recruitment, training and retention measures. We want to establish a workforce comprising proud workers and skilled craftsmen. One that will attract ambitious job seekers to establish their careers.
16. So on this note, let me congratulate SCAL for taking the initiative to launch the inaugural HR Forum, and I wish everyone a fruitful day ahead. Thank you.