Small and medium enterprises (SMEs) in Singapore face a hard time recruiting people. For one, they cannot hold on to talent because the job market is so tight. A person can find a better paying job anytime in Singapore these days, simply because all organisations are looking for talent. This is exacerbated by the crimp in foreign manpower quotas, which in the past, have been a boon for SMEs to fill vacancies. Now that this has been tightened, they are turning back to Singaporeans, only to find them lured by better paying jobs, with MNCs. Even if they increase salary, SMEs cannot compete with the big boys. As such, they are faced with a double whammy - with their talent being pulled away, and they cannot find suitable replacements. And whatever is left to be chosen in the available talent pool are basically unsuccessful MNC applicants; not exactly the cream of the crop. SMEs are having a tough time.
In the past
SMEs have not really had the best manpower practices. Most of them try to hire 8 people to do 10 people’s job, paying them 6 people’s salary. While they try to squeeze every ounce of working time and effort from their people, they do not recognize them for their effort. Their salary is often lower than the industry average. But they get by simply because there is foreign labour to fall back on. They can hold Singaporeans ransom by saying, “Well, if you don’t want to do the job, we can get a foreigner to do it. And they are cheaper too!” As such, easy access to cheap foreign labour has kept Singaporeans’ pay low. But with the current situation, SMEs now cannot “exploit” cheap labour as they had in the past, and there is a need for them to retune their thinking.
The new normal – 5/10/7
Manpower productivity becomes a very important focus. There is a need to now hire 5 people to do 10 people’s job, but to pay them 7 people’s salary, the 5/10/7 strategy. This new normal will help SMEs find better talent, since they are paying higher than the industry average, and increase their productivity – getting one worker to do the work of two. But how the work is being done needs to change as well. Gone are the days when manual labour is the solution. In fact, technology is required to double a person’s output. It will be unconscionable to force one person to do two people’s job without technological advantage. Identifying and implementing this advantage, therefore, must be the key focal point of all HR directors and CEOs. If processes don’t change, and fulfillment options don’t improve, then there is no way we can adopt the 5/10/7 strategy.
Help is on the way
There is a fortunate ending to this story. SMEs are not left to fend for themselves. The government has launched the Lean Enterprise Development (LED) Scheme, where an inter-agency taskforce has been set up by the Minister for Manpower to help Singapore SMEs become manpower lean. They will put down money to help SMEs find the right technological solutions, thereby benefiting every SME in the industry. And SMEs don’t have to go it alone. The LED scheme will identify suitable consultants to work with SMEs, thereby helping them get better on the government’s account. Now this is a great solution if ever there was one!
But this needs one thing – SME bosses need to think differently. They need to learn to embrace the new way of working, and the new way of compensating. This has been the biggest stumbling block that the Ministry of Manpower has faced for the longest time. Ultimately, if SMEs do not want to change, in vain would the government labour. Perhaps it is time for all SMEs to band together to address the changing landscape together; and together get government support to make that new transition. After all, what other options do we have? It is only a matter of time.