~ By Martin Gabriel ~
It was a rather surprising to read the media reports of Professor Lim Chong Yah, who chaired the National Wages Council from 1972 – 2001, advocating 'shock therapy' in Singapore’s wage system ("Professor's 'shock therapy' to revamp wages", Straits Times, 10 Apr 2012). According to reports, Prof Lim suggested that those earning S$1,500 a month should have their pay increased by 50 per cent over the next three years. He also said wages for those earning S$15,000 or more a month should be frozen for the same period ('Local economist suggests second wage revolution', The Business Times, 10 Apr, 2012).
This is indeed surprising, and it only underscores the decades-long failure of the NWC which has brought Singapore’s wage system to the current wage disparity among the top earners and lower-wage unskilled workers. Ministers have been quick to dismiss it, highlighting that increased in productivity must take the lead in determining higher wages, and that any artificial wage increase would lead to dire consequence of structural unemployment if productivity is unable to catch up with wage increase ("Wage shock therapy 'too risky': Lim Swee Say", TODAY, 14 Apr 2012).
So how can we do it?
While the government keeps advocating an increase in productivity, we are still waiting for the, ‘how do we do it?’ Cheap foreign workers easily available have depressed wages for the lower income group and allowed corporations to see higher profits. It is almost impossible to reverse this over-reliance which has contributed to companies focusing towards business processes rather than innovation. Companies simply increase output by adding cheaper manpower and man-hours rather than using innovative methods to produce higher quality output.
What the government and the tripartite or NWC should be doing is to help companies study every job description of employees earning less than S$1,500 per month, by adding value to the jobs which are seen to be unskilled. Let me cite an example.
A hotel doorman can be paid $1,000 per month. His job is to greet the hotel guests and open the main door for them to enter. A very simple task indeed, which is why hotels may not pay more or find it an ‘injustice’ to pay for a task that is simple and unskilled. Every increment would mean opening and closing the door becomes more expensive. Moreover, the very nature of the job is so simple, that even HR practitioners do not know how to ‘grow’ the job scope to achieve retention with higher wages and rewards.
Devil is in the details
The tripartite should take the lead by training companies HR personnel and line Managers to be able to scrutinise every job description and come up with innovative ways to add value to jobs that are seen unskilled. As the saying goes, the devil is in the details (and it is in the details of every job description). With reference to the hotel doorman’s job, by looking at the task, it is very simple, but if that job can evolve into something with greater value, then paying a higher wage would be justifiable.
The doorman at the Raffles Hotel who wears a loud colourful uniform can command a higher salary as his job does not encompass just opening and closing doors, but he has become part of the branding and icon of the hotel. Tourist take pictures with him and every picture taken produces marketing value as the tourists boast their pictures to friends and relatives back home. Therefore the job is no longer just about the task but the significance of hotel branding. This I believe is a very good example of how a simple unskilled job has evolved into a job that has an added value to its scope and thereby justifies a higher salary as compared to doormen in other hotels.
I have also observed petrol pump attendants at petrol stations. Another job that encompasses simple tasks - which is why they are categorised as low-paying jobs (no disrespect intended to them). If one looks at the task alone, the job appears simple but if one is able to add value to that job a higher wage can again be justified. Service oriented jobs are not just about the task, but rather how is the task done, which is more important.
Culture of tipping might work
Encouraging a culture of tipping for excellent service can help lower wage workers in the service industry earn more. The tipping should also be towards the individual employee and not a pooled system. An individual who earns his own tip would be motivated to up his service standards as the amount of tip he receives is directly due to his own service performance. Tips that go into the pooled system does not motivate individuals as lazy workers take refuge in a group, only to claim an equal share with others who work harder in earning the tips. In the service industry it is not about how to do it, but rather how you do it that counts.
Although Mr Lim Swee Say has repeated many times about job redesign, I believe it has fallen on deaf ears. Not enough is being done on the ground as companies are just not strategic thinking when it comes to redesigning jobs and adding value to these jobs to command higher wages for its workers. This results in higher attrition.
By scrutinising and adding value to jobs that are seen to be mundane, repetitive, boring and without glamour, we could also contribute by creating jobs that are more interesting to perform so that it leads, hopefully, to better retention. Most of these lower-end jobs have had higher attrition rates which are costly to companies in terms of recruitment, training and lost productivity. This money could have been put to better use instead.