If you want wages to rise, then productivity is key.
Prime Minister Lee Hsien Loong said this in his speech to over 800 businessmen at the inaugural National Productivity Month, held by the Singapore Business Federation and Singapore National Employers Federation yesterday at the Suntec Singapore Convention & Exhibition Centre.
He said that in the short term, wages may rise by themselves in a tight labour market, but in the longer run, wage rises can be sustained only through higher productivity.
He outlined the Government's three-pronged approach to achieve this.
First, there are incentives and schemes to support firms to upgrade productivity, whether by investing in technology, training workers or streamlining operations.
There are also schemes tailored to companies in individual sectors, which they can tap on to make productivity and innovation improvements and to upgrade their workers.
There has been a steady increase in the take-up of such schemes, Mr Lee said.
Second, foreign worker inflow is being controlled in order to put pressure on employers to upgrade their workers, instead of just hiring more.
But companies still get enough access to foreign workers to complement their Singaporean workforce, so businesses can survive and Singaporean jobs do not disappear.
He said: "As I said last week, I do not expect any further major measures to tighten our foreign worker numbers."
The third prong is making the productivity drive a national effort.
Mr Lee set out the different roles which players should take.
Companies must have a "productivity mindset" and not be afraid to change for the sake of efficiency.
Employers must seek to improve their operations, recognise their workers' skills, and value and train workers.
But businesses are not the only ones that have to change their mindset - customers must accept changes in the business models such as self-service formats, he added.
This article was first published on Oct 8, 2014.
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