Not enough wood for the fire, geddit?

Regular visitors of this blog may remember that I wrote about going to Sentosa’s Resorts World for a two-day conference in early July, mostly bitching about the early wake up times I had to endure and spending time at an activity I didn’t have an interest in, or expecting to derive any intellectual or financial benefit from.

I wasn’t in the HR business and have no aspirations to be in it, whether as a recruiter or trainer. As for being trained, well, I’m a strong believer that you can’t teach old dogs new tricks! 🙄

So I started out a most ungrateful guest at the annual Human Capital Singapore conference.

This said, one month after the event, I continue to replay scenes from the conference in my mind, the people I met, the information that was unloaded by those with much to impart and soaked up like a sponge by those who attended to learn and/or benefit from government training subsidies and even by yours truly. I went like a horse being forced to water… and ended receiving new insights as if by osmosis.

You see, although the conference had a mouthful for its theme — COMPETING AT A GLOBAL LEVEL: LEVELLING UP HUMAN CAPITAL CAPABILITIES – it was really about jobs, foreign talent and productivity, once the formidable subject line was distilled and deconstructed. In short, about yours and my economic relevance and survival in a hugely interconnected world!

300 plus participants attended the conference from corporate blue-bloods who mostly did panel discussions and the CEO “roundtable” while the non-VIPs like moi formed the audience in the main talk chamber or the workshops in seminar rooms.

Although the jobs-foreign talent-productivity hot button issues are relevant anywhere, they have a special resonance in Singapore given the impact that these very issues have had on the outcome of the May general election where the long ruling PAP saw its share of the popular vote clearly crimped.

The new junior Minister for Manpower Bg Tan Chuan-Jin, who opened the conference, was only oblique about the need for foreign talent – using his magnum opus to talk about how essential it’s to have a highly capable and motivated workforce to enable Singapore to attract investments that a) require more complex skill sets and b) offer better career opportunities and prospects.

Yet, I believe all listening read the unspoken subtext: what were Sg’s options if the local workforce can’t meet the needs of investors or, at least, not in the required numbers?

What Bg Tan left unsaid was articulated the second day by Mr Ong Ye Kung, deputy sec gen of NTUC, who highlighted the seemingly non-stoppable nightmare of stagnating wages: “The Berlin wall fell and China started to open up, (and) their huge populations became part of the global workforce”.

The pain suffered by the lower rungs of Singaporean workers isn’t unique to Singapore because “many countries let the cheaper foreign workers come in (too)”.

“This lowers business cost, but also pushes down wages for locals. For countries which do not let them in, industries simply move abroad to where the cheaper labour is, resulting in rising unemployment and falling wages. The dilemma for Governments is stark – preserve jobs but risk stagnating wages, or keep wages rising but risk destroying jobs.”

This dilemma was best illustrated by Mr Clement Woon who generously shared his experience as a global manager confronted with the reality of Hobson’s choice in a world of porous borders where not only goods but also people flow to places where they are best appreciated.

For Mr Woon of SATs, it isn’t a dilemma of either/or but how to seamlessly manage the talent holding those jobs created at home and abroad because that’s what the SATs business model is about: it operates 33 airports worldwide, including ours in Changi.

(Interestingly, not long after his talk at the HCS conference, Mr Woon quit SATs right after the company’s financial results were announced. A case of a local talent going global or staying local with another employer hungry for internationalised talent? Who knows?)

If all of Singapore’s business is eventually going to have a similar global footprint like SATs, Capitaland et al, then the debate of local versus foreign talent may, over time, become moot as a rising tidal wave of our domestic talent moves overseas and themselves become foreign talent in an alien world overseeing Singapore’s and third countries’ business interests in foreign lands!

But that’s as yet far-off comfort as is the view of NTUC’s Ong who suggested that a turning point might be in the offing — in the massive outpouring of cheap labour from China, India and liberated Eastern Europe and other ex-communist countries.

His opinion is based on what he said economists call the Lewis turning point when a labour abundant developing economy runs out of labour and wages like those in China are rising so fast that workers instead of going overseas could find jobs almost as easily at home. Moreover, industries are also starting to revert to advanced economies, like the US and Germany.

“We are therefore likely to be at a turning point of history, from stagnating wages and over abundance of labour, to a situation of labour shortage. The era of competing with cheaper labour will be soon over…” Mr Ong declared.

But “soon” may still not be soon enough for those in Singapore squeezed between high foreign talent and cheap labour from far flung countries.

And nowhere illustrates this better than by comparing the data shared on the second day of the HCS conference by Prof Tan Khee Giap, Co-Director, Asia Competitiveness Institute at the Lee Kuan Yew School of Public Policy with those by Mr Then Yee Thoong, director of the Ministry of Manpower’s Work Pass Division, at a workshop on managing change on the first day.

Prof Tan mentioned that as of 2010, there were 400,000 Singaporeans who earned less than $1700 per month. Further, the median gross income of Workfare Income Supplement recipients in 2008 and 2009 was $808 and $822 per month respectively with the qualifying income ceiling known as the “living wage” set at $1500 per month in 2009 by the government.

Given their level of pay before government offsets, many Singaporeans already have low paying jobs and so will not be available to take up those going to low-pay work permit holders even if the Government were to tighten work permit entry requirements!

Further, although no age or educational profiles were provided, it’s implicit that this large wedge of Singaporean labour isn’t going to challenge, let alone replace the foreign talent coterie that MOM is courting so assiduously.

And court is what MOM is doing, having even created a specially and thoughtfully designed centre – taking into consideration the employment pass holders’ accompanying family members like spouse, kids and/or parents – for foreign professionals when they turn up to have their papers processed!

MOM’s aspirations, as articulated by Mr Then, don’t stop at offering the fastest processing time for work passes but to offer “the best Work Pass Service in the world, anticipating and supporting our customers’ needs with a delightful experience.”

Some 800 to 1,000 employment pass applicants – or about 234,000 per annum — are processed a day at this centre on High Street. So one can imagine its size and what it must cost the Government to run (even if it’s a service that’s outsourced), especially when it has a full wide window giving an unimpeded view of Singapore’s new and still evolving expensive waterfront!

Of all the participants in Mr Then’s workshop, only one person in the room have had experience of this gilt-edged reception centre and he wasn’t a participant but Mr Then’s co-workshop facilitator who is a “foreign talent”!

Speaking of which, of the six workshops held on July 6, Mr Then was the only Singaporean
facilitator while the four workshops on July 7 were led half and half!

Yet there is hope that we do have and can grow our own timber, as reflected in Mr Liak Teng Lit, the maverick hospital administrator who chaired the CEO roundtable and rolled out for the benefit and enjoyment of attendees his decades of experience from rookie pharmacist to CEO of Khoo Teck Puat Hospital, Singapore’s newest hospital in which he was involved from inception to completion.

The trouble is that Singapore just doesn’t have enough of timber, including branches and twigs: whether it’s Prof’s Tan’s 400,000 low wage earners, Mr Then’s foreign talent enjoying red carpet room with a super view welcome or workshop facilitators or Mr Liak.

Hence if Mr Ong’s Lewis turning point does come about, it may not bring the relief from job competition that some Singaporeans complain about but simply loss of the extra wood that fires the economic engine with adverse consequences. 😦

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