Why The Rules Make Managers Turn To Immigrants

Opinions expressed by Lee Chiu San

The writer was a journalist in the mainstream media who, in his own words: “had to leave for the much more honest and rewarding profession of selling cars.” Now retired, he and his contemporaries got involved in an e-mail discussion on the White Paper on Population. One forwarded Chiu San’s e-mails to TOC, which asked to publish them. Chiu San did not agree that his comments, meant to be circulated privately only among friends, be revealed. But he extracted the essence of the e-mails for this article, which summarises his experiences as a business manager using foreign workers.


I am an unashamed capitalist. But I subscribe to the principle of fair play. In the pursuit of growth, the ones higher up the ladder have a responsibility to make sure that the people below do not lose. It is not right if those at the top enjoy the spoils and leave those below to bear the social costs.

Like someone in the limelight who recently announced that both he and his wife have cars, so do my wife and I. But not everyone has a personal vehicle. I can sympathise with those who have to jam themselves into overcrowded trains and buses and fight for space in other packed public facilities.

I feel that those steering Singapore have forgotten that their first responsibility is to their electorate. They should be taking care of the people who put them into power – meaning, first and foremost, Singapore citizens.

I received my best education in business ethics during my years in Inchcape plc from 1986 to 1995. Though the British were anything but perfect colonial masters, as evidenced by the atrocities that they committed while ruling India, in the waning years of the matured Empire, a sense of fair play did develop.

This British attitude of finding the things that are “Just not Cricket” repugnant could be found in people who were my bosses.

Despite pushing us for profits, at every single annual dinner, and during many meetings with managers, Sir David G. John, the head of Inchcape in Singapore, kept reminding us that we had to be good and responsible corporate citizens in the communities in which we operated. This attitude rubbed off on my immediate boss, the Regional Motors Director, Alan Tan Tatt Huat, a Malaysian.

As a former journalist, able to write quick reports for transmission by fax to London (the use of e-mail not being widespread in 1992), I was sometimes assigned by Alan to assist the elderly Advisor to the Board, Derek J. Whittaker, when he came to Asia to conduct negotiations. Mr. Whittaker had held the post of Motors Director for worldwide operations before his semi-retirement.

When I asked after one session why he did not press harder where we had a clear advantage, his reply was: “You must leave enough on the table for the other side.” He believed in profits, not profiteering, and in making Inchcape a business partner of choice.

Whether he was doing this out of enlightened self-interest, or as a matter of principle is moot. Inchcape is a 150 year old company, and, unlike some younger organisations, shows no signs of self-destructing.

Coming to the current situation in Singapore, I think that more consideration for the interests of all stakeholders in our society is in order before deciding on the rules.

But business operatives don’t make the rules. To stay in business, they do what is dictated by the conditions that they find.

This was brought home to me very forcibly in a meeting at the Singapore Motor Traders’ Association shortly after the Vehicle Quota System was introduced in 1990.

I believe that the system has its merits from the point of view of economic and land-use planning. But it is another example of a good principle that has not been well monitored and implemented.

Not quite having my journalistic idealism tempered by the practicalities of running a division within a large corporation, I proposed that we, as a trade body, advise the authorities on how it should be improved.

A very senior member of the SMTA thundered: “We don’t make the rules. The Government makes the rules. Follow them. But if the rules give you the chance to make a few more dollars, you would be a fool to want to change them!”

I shut up.

I will now touch on why the rules pertaining to cheap foreign labour make our citizens lose out.

As head of a business unit from 2000 to 2007, I was responsible for profitability. I believe strongly in training, and would have been willing to invest the two years or more needed to train an apprentice to become a qualified technician.

We tended to lose many of our trainees. The government made things more difficult by stretching our waiting time from two years to four. We would start with 16-year-old N-Level technical students not planning to go for further academic education. Just when they were becoming productive at 18, they would be called up for National Service.

A good number would not return, either signing on as regulars in the Armed Forces or changing vocations.

My bosses appraised my performance not over a four or five year span, but every single year. Therefore, why should I be behind my peers while doing training when I could get productive technicians quickly? I recruited automotive engineers from developing nations who had worked as technicians elsewhere. Though their higher qualifications were not recognised in Singapore, they were more than capable of doing technicians’ work, at not much more than a local technician’s pay.

And they hit the ground running. Being literate, they could also be relied upon to look up solutions to problems on my Principal’s website or refer to training manuals by themselves. I did not have the problem very frequently encountered with half-literate local mechanics who would approach the workshop manager and say: “Eh, boss – ah? What this ah? Ha? Si Mi? How to do?”

I saw locals lose out badly too in cleaning jobs. Mary used to clean my office for about $1,400 per month, including overtime. Human Resource professionals say that in Singapore, the real cost of an employee is about 1.4 to 1.5 times the salary taking into account CPF, leave, medical benefits and administrative expenses. Therefore, Mary cost about $1,960 per month.

A bean counter at the head office told the big, big, boss that we could save across our entire group of companies if we outsourced cleaning services.

He was not wrong.

A Smarmy Slave Driver promised that he would provide cleaners for our whole group of companies at $1,700 per month per head across the board, for every day that we were open for business. Replacements would be provided for any cleaner ill or absent.

He would hire all the existing cleaners we would retrench. Mary came back to clean my office. I very often kept my showrooms open late into the evening or on weekends. Mary always stayed to clean up.

One day, Mary’s husband created a row within our premises. He had a dispute with her employer over her fringe benefits and overtime. I was advised not to get involved in a matter between a contractor and a person who was now on his staff. Mary quit.

She was replaced by Siti, who did not speak English and hardly communicated with my other staff. I understand Indonesian. In the following months I learned why Siti took the job.

Her family were simple folk from Kalimantan, displaced when the area around their village was redeveloped. With silt in the rivers and dredging off the beaches, fishing and farming were impossible.

Siti, her husband, and her younger brother reluctantly signed up with a foreign labour recruiter.

Siti and her brother worked in my building. They said that they each received $800 per month in total. That, I understand, is currently the going rate for foreign workers, who pay for their own food. The foreign worker levy and transport to the place of work are the responsibility of the employer.

She had issues with her employer over transport and accommodation. After a while in Singapore, her employer stopped sending her to my premises, but instructed her to take public transport. She claimed not to have been properly reimbursed.

As a modest, tudung-wearing Moslem woman, Siti said that she said was uncomfortable at the lack of privacy in the large, open premises where her employer housed all his staff.

So, together with her husband and her brother, they rented a room within walking distance of my building. Her employer said that they had done it on her own initiative, and refused to contribute a cent.

With colleagues more experienced in our corporation’s practices, I discussed how we could assist Siti. Their collective opinion was that I should not interfere in our contractor’s dealings with his own staff. But they saw no harm in my including the cleaners in benefits I gave to my staff, some of which were free coffee, tea, and biscuits during morning and afternoon breaks, plus packaged meals when they worked late.

Could I complain that the premises were not clean? No way! The foreign workers were diligent. Did I have any problems? If I so much as raised an eyebrow, Mr Smarmy Slave Driver would be at my office, bowing and genuflecting, threatening to take action against the person who had offended me, one of his precious clients.

I did not want to sour relations between Siti and her employer, who definitely had the much stronger upper hand.

What could I say to the big, big bosses who had made the decision to outsource cleaning services?

My immediate boss advised that it would have been stupid to trouble the top people with operational details. If the Smarmy Slave Driver was prepared to bow to managers at my level, would he not prostrate himself to people far higher up the corporate totem pole?

In any case, some people could portray Mr Smarmy Slave Driver as just a hard-working entrepreneur, one who had found a cheap source of labour that he could sell for a profit.

As the facts stood, on paper, our costs had been reduced, and efficiency was somewhat improved. True, the margins and improvements were small, but how could I argue with the figures?

I return to the point brought home to me so forcefully by the senior motor trader that we do not make the rules – the government makes the rules. We only follow them.

But, competitive managers scrambling up the corporate ladder will do anything that is not illegal.

If I had to compete on equal terms with my peers in the 22 other companies that made up our Group in Singapore, I would challenge them on training and the deployment of local labour. But why should I put myself at a disadvantage and put my job and my bonus at risk by doing that when the rules clearly make it more profitable to hire cheap foreign workers?

That left me wondering how the skills of Singaporeans can ever be upgraded to improve productivity. And will those at the bottom of the pile ever have a chance to enjoy a better standard of living?

Since labour suppliers profit from Bangladeshis and Indonesians prepared to accept $800 per month, would they next boost their bottom lines by seeking desperate Rohingya refugees prepared to work for less? Where would that leave our local cleaners?

The use of cheap foreign workers is a quick-fix drug to which Singapore business has become addicted. When threatened with withdrawal, of course businessmen will scream and say that they have to close down. Not all of that is rhetoric.

There is absolutely no doubt that the restructuring of various businesses will be painful. As in the case of curing drug addicts, some really may not survive.

Nobody will do it voluntarily because the first to do so will lose out. But if the government makes all do it, however they scream and shout, they will have to comply – and our society will be better in the long term.

Self-serve petrol stations are cases in point as to why no one wants to make the first move.

More than 30 years ago, before the influx of cheap foreign labour, I had a minor role in helping a major oil company launch a self-serve station. The objective then (when Dr. Goh Keng Swee dictated that Singapore should not have easy access to foreign labour) was to replace the poor-quality or unavailable forecourt pump attendants with fewer, well-trained and polite cashiers. Other oil companies followed suit and installed self-serve pumps.

The upgrading of the stations was done in stages over a number of years, with some still having pumps that required attendants to operate them. It didn’t take operators long to notice that stations with pump attendants got more business.

After a while, even stations installed with self-serve pumps hired attendants.  Fast forward to 2007. My friend, who operates a petrol station, heaved a sigh of relief when the government allowed him to hire cheap foreign pump attendants. He said that he could not compete otherwise.

Is pumping petrol so difficult? I survived doing it recently right across the USA and around half of Western Australia. As did every other driver in every petrol station that I went to. But in Singapore, unless the government stops the influx of foreign attendants, which station operator would want to be the first to lose business by insisting that customers pump their own petrol?

In any case, this is one area in which I feel that the use of additional foreign labour results in absolutely no value-added, except to increase the GDP figures.

I also have to ask why is it so difficult to make Singaporeans return their trays and cutlery in food courts when people all over Australia, Europe, Japan and America do it? If the authorities stood firm on cutting down the availability of foreign cleaners, the operators of dining outlets would have no alternative but to change their business models, seriously study their operating procedures, invest in training as well as hardware, and achieve the same standard of cleanliness. But again, the first food court to force customers to clear their own tables would be the first to go out of business.

The government’s role should have been to moderate practices in favour of its citizens. But as the late Professor James Buchanan has pointed out, bureaucrats and politicians have agendas that may not be in alignment with the aims of the population at large.

The current over-emphasis on financial performance among Singapore civil servants and politicians is a case in point.

Though I have not always agreed with the opinions of Lee Kuan Yew, one of the things he said which I fully endorse is that without sound finances, nothing at all is possible.

But we are again seeing a realistic principle being carried to ridiculous extremes, with government rushing towards economic growth as if nothing else matters.

I would like to put things into perspective with this quote from the late Senator Robert Kennedy. “The gross national product does not allow for the health of our children, the quality of their education, or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages; the intelligence of our public debate or the integrity of our public officials. It measures neither our wit nor our courage; neither our wisdom nor our learning; neither our compassion nor our devotion to our country; it measures everything, in short, except that which makes life worthwhile.”

Bringing about a proper balance between economic growth and quality of life for citizens will definitely not be easy – as the people in power keep reminding us.

Well, before I retired, I used to complain that it was very difficult to achieve market share, increased profitability and lower business costs all at the same time. My bosses retorted that if the job was easy, they won’t have needed to employ me. And if I didn’t think I was capable of doing it, there were others they could choose from.

Again I shut up, and buckled down to produce the results.

Please bear in mind that every single one of the persons now in government stood for election, and asked the voters to select him/her.

It is now up to them to do the job.

It also does not wash to keep harping on the fact that Singapore’s situation is unique. When I complained that the unique COE system was making my job difficult, Mr. Whittaker, who used to be in overall charge of the markets in over 60 different countries, retorted: “Every country has problems that are unique to it. Every manager has to overcome problems found only in his area.”

Singapore has the highest-paid politicians in the world. Their salaries are something I have never objected to, since I believe that those who do difficult jobs deserve to be properly compensated. But in my years selling cars, I also learned that the higher the price of the car, the higher the expectations of the customer.

Singapore has the most expensive cars in the world. But obviously, customers’ expectations are being met, because people here are still buying cars. I don’t see a rush to other means of transport.

For the record, I don’t disagree with many of the current government’s statements and promises.

I am just waiting for them to be delivered. What happened to the Swiss standard of living that we were supposed to look forward to?

How can our problems be solved? I have my opinions, but they will take too long to expound. Besides, I am not the one in charge.

Suffice to say that I do see the value of attracting real foreign talent, having been coached by expatriate mentors from the UK, USA and Japan. I would welcome more of them.

And there are situations where a large foreign workforce can achieve what Singaporeans cannot.

At the time Raffles City was under construction we needed the Korean builders. They came, they lived in self-contained communities, did the job, and left without much adverse impact on society as a whole.

Foreign talent can build the flats we need – since such projects can be one-off requirements – and they can go home when they are finished.

But we cannot continue with a situation where those at the top, who are insulated from the inconveniences of crowding, enjoy the benefits of the GDP growth while the quality of life of those below is degraded by an endless stream of immigrants.

I will conclude by quoting what the learned Doctor Johnson said when asked by his followers when criticism could be justified. He replied: “You may not be able to make a table, but when you have paid a carpenter to make one, you have every right to criticise the work.”