Singapore's human resource of nearly 2 million is recognized as one of the most efficient in the world, based on inputs like worker's productivity, attitude and technical skills. Due to limited size of the workforce and low unemployment rates, Singapore either has to increase the productivity of the domestic workers or bring in bring in foreigner workers. At present Singapore has a significant number of International Workers, most of them in the blue collar sector.
Singapore's small work force of 1.87 million restricts the labor supply at all levels. The domestic workforce is not able to meet the requirements for skilled technical and professional personnel. To reduce the deficit, the Government has allowed for the entry of selective workforce from abroad, mostly from neighboring Southeast Asian countries.
Firms would have to pay a fee to the Government for using foreign production and assembly workers. The fee varies according to the skill level and industry.
Singapore is heavily dependent on the domestic labor force, for its economic development. To improve the efficiency of the human resource, Singapore follows three basic strategies:
- Educate each individual to his or her maximum potential;
- Develop skills that meet the needs of industry and business; and
- Promote continuous training and retraining.
Education and Training
The Government is very clear that the only way Singapore can match other developed countries is through heavy investment in education and the continuous upgrade of labor skills through training and development. Singapore’s investment in education and training amounts to about 20 percent of the Government’s spending annually. Primary education is free and more than 93 percent of children between the ages of 6 and 17 are enrolled in school. Most Singaporeans speak English, which is the language of the business and government. In addition to primary and secondary schools, there are around 25 International schools in Singapore, from pre-schools to college preparatory to cater to the needs of the foreign and local residents.
The Government has set up a separate Ministry called Ministry of Manpower, to strategize plans for worker training. The main objective is to continuously upgrade the workers skill set to meet the future challenges.
Special Government Training programme operates in Cooperation with Corporations to leverage on their expertise and technical knowledge. To give impetus to firms to retain workers on a continuous basis, the Singapore Government came up with the Skills Development Fund. It is financed by a required payment by employers of 1 percent of base pay of any worker earning less than S$1200 (about US$706) monthly. Firms may then qualify to use money from the fund to finance training programs.
Wages and salaries in Singapore are at par with other industrialized countries including Japan and the United States. The salaries of managers, executives and professionals vary according to the ability, experience and type of business. Annual bonuses and other benefits can add significantly to base salaries. Bonuses are at all levels and are equal to one month’s wages. The Government monitors the wage policy and other aspects affecting labor conditions through the National Wage Council (NWC), which includes representatives from Government, business and labor. The NWC sets the standards for annual wage negotiations between employers and workers.