31 Oct 2023

The Singapore National Employers Federation strongly endorses the National Wages Council (NWC) 2023/24 Guidelines.

2. According to the Ministry of Trade and Industry, the Singapore economy grew by 0.7% in the third quarter of 2023, as compared to 4.0% in the same period in 2022 and 0.5% in the previous quarter. For the whole of 2023, MTI expected the economy to grow between 0.5% and 1.5%, which was revised downwards from between 0.5% and 2.5% in August 2023 and lower than the 3.6% of 2022.

3. While job vacancies remained high, the number of job vacancies to each job seeker had declined from 2.54 in June 2022 to 1.94 in June 2023. With slower economic growth, labour market tightness may ease further.

4. SNEF noted that labour productivity[1] grew by 2.7% per annum between 2016 and 2022 while real total wage grew by 2.3% per annum over the same period, which straddled across the COVID-19 pandemic. Keeping wage growth in line with productivity growth had ensured its sustainability even as the Singapore economy went through a difficult phase.

5. Therefore, SNEF supports the NWC call for wage increases to be fair and sustainable, and based on the Flexible Wage System (FWS).

6. Despite the economic headwinds, SNEF echoes the NWC in calling on employers and employees to press on with business transformation and take decisive steps to transform jobs and invest in upskilling and reskilling. Therefore, SNEF strongly urges employers to persevere in upgrading HR capability, persevere in upskilling employees, and persevere in uplifting lower-wage workers.

Persevere in Upgrading HR Capability

7. Business transformation can only be successful when the workplace and workforce are transformed correspondingly. In this regard, HR practitioners play a crucial role in supporting business transformation. Employers should encourage their HR practitioners to upskill and be accredited with the Institute for Human Resource Professionals (IHRP) certification. Employers can send their HR practitioners for training at SNEF to acquire the required competencies to drive workplace and workforce transformation.

8. SNEF also stands ready to assist employers in transforming their jobs. Employers can approach SNEF to apply for the Support for Job Redesign under Productivity Solutions Grant (PSG_JR) to work with pre-approved consultants to embark on job redesign.

Persevere in Upskilling Employees

9. As business transformation and job redesign take time, employers should take the opportunity during the transition period to upskill their employees for future jobs. Employers could refer to the relevant Jobs Transformation Maps to determine what types of skills training they should send their employees for. There are also many Career Conversion Programmes to support employers in reskilling their existing employees and new hires.

10. SNEF recognizes that due to shortage of manpower, employers, especially SMEs (small and medium-sized enterprises), may face difficulties in sending their employees for external training. SNEF, in partnership with the National Centre of Excellence for Workplace Learning (NACE) at Nanyang Polytechnic, can assist employers to enhance their workplace learning capability so that training at the workplace can be conducted effectively, which will also reduce employees’ time away from work.

11. As the Jobs-Skills Integrator for the Retail Industry, SNEF will be placing specific focus on the retail sector, and retail employers can seek assistance from SNEF and our partners to develop their employees with industry-relevant skills even as they seek to transform their business.

Persevere in uplifting Lower-Wage Workers

12. SNEF supports the call to uplift the wages of lower-wage workers, in line with the recommendations of the Tripartite Workgroup on Lower-Wage Workers (TWG-LWW). This year, the NWC had also issued the wage guidelines for the Occupational Progressive Wages (OPW) for administrators and drivers, for 2024 and 2025.  
13. The aim is to narrow the income gap between lower-wage workers (LWWs) and median wage earners by 2030, and we need to persevere in uplifting the wages of LWWs. Taking into account that the Government has introduced a five-year Progressive Wage Credit Scheme (PWCS) to co-fund the wage increases for LWWs, which the Government will enhance its share in 2023 as announced during the Singapore Budget 2023, SNEF supports the NWC recommendation for granting workers earning gross monthly wage of up to $2,500:
    5. an increase of 5.5%-7.5% of gross monthly wage or
    6. wage increase of $85-$105, whichever is higher.

Concluding Remarks

14. Said Dr Robert Yap, President, SNEF, “Faced with slower economic growth, manpower shortage and persistent high inflation, employers need to ensure wage growth continues to be in line with productivity growth. To do so, SNEF strongly urge employers to persevere in transforming their business so as to grow sustainably.

15. Employers should prepare their employees for future jobs and bring their employees along in the transformation journey. In particular, employers should redesign low value-added jobs so that their employees can contribute more to the business, which will in turn sustain the higher wage increases for lower-wage workers.

16. SNEF would also like to reiterate that the wage recommendation for the lower-wage workers is necessarily higher than median wage growth, so as to narrow the income gap.

17. To further help their employees cope with the higher costs of living, in addition to the support that the Government is already providing, the federation encourages employers to consider giving a one-off special lump sum payment to employees.

18. In conclusion, Singapore had emerged stronger from the COVID-19 pandemic because wage growth was in line with productivity growth and both employers and workers pressed on with business transformation and skills upgrading. Therefore, I am confident that this set of NWC Guidelines will help us to navigate the economic headwinds and emerge stronger together again.”

[1] As measured by value-added per actual hour worked.

About Singapore National Employers Federation

The Singapore National Employers Federation (SNEF) is a trade union of employers. Our mission is to advance tripartism and enhance labour market flexibility to enable employers to implement responsible employment practices for sustainable growth. SNEF has a membership of over 3,400 companies with a combined workforce of over 800,000. For more information, please visit www.snef.org.sg