The traditional Asian concept of good service involves personal attention, but it is no longer feasible to improve service by simply relying on more manpower, said Deputy Prime Minister Tharman Shanmugaratnam on Thursday.
Singapore's service industry needs to redefine its idea of service excellence and raise service quality, he added, without losing the human touch.
DPM Tharman delivered this message to industry players at the Singapore Service Excellence Medallion Award Ceremony on Thursday night. In his speech, he painted a stark picture of the current situation: A tight labour market that will remain, slow growth of the resident labour force and tightening access on foreign labour.
The challenge of restructuring, he said, is "profound for the services sector", which is highly dependent on manpower.
Technology - like the use of cooking robots in kitchens and automated ordering systems in restaurants - is one solution, but it is rarely about that alone, he said.
"To remain competitive, we need to go beyond simple economising or replacing of manpower. We have to re-imagine our service industries," he urged the 320-strong audience. "Reducing manpower reliance does not have to mean an impoverished customer experience."
He gave two examples of companies that have done so: Tesco Homeplus and the Changi Airport Group.
Tesco set up a virtual supermarket at Seolleung station at the Seoul subway in 2011, allowing smartphone users to scan the barcode of pictures of goods on billboards, make payment and have them delivered to them on the same day.
In the case of Changi, touchscreen feedback systems for visitors were installed at areas such as washrooms and check-in counters.
This helped the airport group monitor service standards without stationing someone in each area.
"It can be done and has to be done," said Mr Tharman, who added that the Government would continue to help businesses develop new approaches.
Spring Singapore's Customer Centric Initiative (CCI) launched in 2005, for instance, helps companies integrate front- and back-end processes. Mr Tharman, who is also Finance Minister, revealed the CCI's preliminary findings on Thursday.
The more than 550 firms involved reported a 23 per cent average rise in sales per employee, comparing results attained a year after and one year before they embarked on the CCI.
As a result of the gains, each employee earned 17 per cent more on average.
Singapore scored 69.9 per cent last year for the Customer Satisfaction Index of Singapore, a tool to benchmark service levels here for continuous improvement, up from 68.7 per cent in 2007.
But it still lags behind the United States (76 per cent) and South Korea (73 per cent).
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