Speech by MOS Teo Ser Luck at the 2nd SME Centre Conference at Max Atria, Singapore Expo

Mr Douglas Foo, President of Singapore Manufacturing Federation

Distinguished Guests,

Ladies and Gentlemen,

Good Morning.

Introduction

I am pleased to join all of you at the 2nd SME Centre Conference today.

Importance of Human Capital

In today’s competitive business environment, the ability to attract, retain, and develop talent, is crucial to success. In that light, the focus of today’s conference on “building the winning team” is timely and very relevant.

Having an engaged workforce is crucial for enterprises to improve their productivity and grow their businesses. A 2013 survey

[1]

by the global consultancy company Gallup, found that engaged employees are 20 per cent more productive than unengaged employees. Companies with engaged workforces have higher earnings per share, and recover more quickly from downturns. In addition, organisations that have highly engaged workers have lower absenteeism and turnover, fewer safety incidents and fewer quality incidents. Employees also benefit from high workforce engagement as they rate their lives better. Actively engaged employees are more than three times as likely to report that they were thriving in their overall lives as those who were disengaged.

Promoting Lifelong Learning through SkillsFuture

The Government is committed to building a more engaged workforce. The SkillsFuture initiative announced in Budget 2015 aims to build the necessary skill-sets and mind-sets to take our economy to the next level. SkillsFuture focuses on empowering our workforce with skills mastery that will enable them to actively chart and shape their careers. Under the initiative, support will be provided from an individual’s schooling years all the way through their working life. This will inculcate a culture of lifelong learning and self-improvement. For this to be realised, the government will complement this support with assistance to our enterprises, so that they can offer opportunities for their employees to grow and thrive with their companies.

Government Support for Building HR Capabilities

To support our businesses, the Government has been providing strong support, particularly to SMEs, to help build up their HR capabilities. In particular, SPRING has in place a suite of funding schemes which SMEs can tap to undertake HR improvement projects.

One beneficiary is SH Cogent Logistics, an integrated logistics management service provider, which implemented various initiatives in 2014 to improve HR management and development of their employees’ careers. With support from SPRING, the company embarked on a project to formulate structured career development pathways for groups of jobs that require similar knowledge, skills and abilities. This enabled employees to identify the skills and knowledge needed for their growth within the organisation, and identify relevant training needs.

We have augmented these support schemes based on feedback from companies. For example, we recognise that SMEs also need support in the form of knowledge and expertise about best practices in workforce development. Hence, as announced in Budget 2015, SPRING will be working with industry partners to develop a shared pool of SkillsFuture Mentors to help SMEs develop the potential of their workforce. These SkillsFuture Mentors will help SMEs to implement measures to deepen the skills of their workforce, and help their supervisors and managers develop their coaching skills. We aim to build a pool of 200 mentors over the next two years, starting with Food, Retail and Logistics.

In Budget 2015, I announced SPRING’s HR shared services initiative. SMEs, especially micro and small enterprises, often do not have the scale to have a specialised unit to support their HR needs, and may find it costly to tap on external consultants. To address this challenge, SPRING has appointed a pool of HR service providers to offer micro and small enterprises shared access to professional HR advisory and management systems. Through this HR shared services initiative, micro and small enterprises can outsource HR operations such as payroll processing and employee data administration, allowing them to focus on their core business and strategic HR functions. Interested SMEs can approach any of the appointed HR service providers listed on SPRING’s website to sign up. SPRING will also provide funding support of up to 70% of qualifying costs, including a one-time set up cost and up to a year of subscription costs for the service.

SME Centres as a first-stop advisory centre for SMEs

Many SMEs require guidance to learn about what steps they can take to strengthen their businesses, and where the government can come in to help. This is where our network of 12 SME Centres comes in. The SME centres serve as a first point of contact for SMEs, providing business diagnosis and advisory services, and helping SMEs identify the government schemes that best meet their needs. As Mr Foo pointed out earlier, over 36,000 SMEs were directly engaged through the SME Centres in one year alone.

For example, Feinmetall Singapore Pte Ltd is a service centre for wafer probe cards used for semiconductor testing. As the company grew, Feinmetall approached SME Centre@SMF for assistance on improving their existing HR policy and systems in 2014. The business advisor at SME Centre@SMF recommended tapping on the Singapore Workforce Development Agency’s (WDA) Enterprise Training Support (ETS) scheme. Through the ETS Scheme, the company was able to conduct enterprise-wide industry salary benchmark reviews. This led to a restructuring of its employee wages to better attract local talent and retain existing staff in the company.

In a move to provide more targeted assistance to SMEs and build their workforce’s capabilities, we will be further enhancing the services provided by the SME Centres. As an example, the SME Centres have collaborated with WDA to place a dedicated business advisor at each of the five main SME Centres to provide training advisory services and information about the WDA manpower development schemes.

Conclusion

In conclusion, the Government is committed to building a high quality workforce that has deep skills under the SkillsFuture effort. This can only be accomplished if businesses also invest in human capital development and work to build and strengthen the capabilities of their teams.

I would also like to take this opportunity to commend our Trade Association and Chamber Partners as well as SME Centres staff for their strong and dedicated support throughout these years. The government looks forward to working closely with you to continue to engage our SMEs, identify their key needs and develop programmes to help them grow and become successful.

Thank you.

[1]

Gallup, “State of the Global Workplace”, 2013.