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Daniel Thong: “You know an industry is broken when the government has to step in to tell the industry to pay their workers at least S$1000 a month.”

An industry is considered "broken" when the government needs to intervene in order to get employers to pay their workers "at least S$1000 a month", according to co-founder of co-founder of cleaning start-up Nimbus Daniel Thong, and "cleaning is broken in this industry".

Referring to what Temasek Holdings chairman and former labour chief Lim Boon Heng said earlier in the same roundtable discussion on wages in the age of disruption by The Straits Times on Friday (30 Nov), Mr Thong said that the problem stems from vicious, intense competition among service companies in terms of obtaining cheap prices for labour, which, he said, "undercuts their service standards and the workers’ wages".

"Service providers are currently paying our local workers very poorly, and you know an industry is broken when the government has to step in to tell the industry to pay their workers at least S$1000 a month.

"S$1000 a month is not what I consider to be a good enough wage for our workers, and so, I decided – as an employer – to step in to try and change the way things are," said Mr Thong.

He added: "Now, the cynics would say that many of these jobs are jobs that Singaporeans do not want to do in the first place, [and] that’s why we need cheap foreign workers. But is it true that Singaporeans are fussy, and not trying to take up important roles in society? Or is it the case that these jobs are just terrible jobs in the first place?"

Picking up a piece of paper that says “Full-time Store Help Wanted. Poverty-level wages. Chaos [sic] Scheduling. No Training. No Career Path. Call +6533333333”, Mr Thong demonstrated: "This is a typical job ad of a low-skilled … a job ad that a low-skilled worker would see.

"It comes with poverty-level salary, no control over your schedule so you do not have time to even spend with your family, it doesn’t come with any career progression or any training – and Singaporeans are expected to demonstrate loyalty in these industries … So things have got to change."

To mitigate certain issues faced by low-wage workers as illustrated by his demonstration of the advertisement sample earlier, Mr Thong revealed that Nimbus "pay 20 per cent above what the Progressive Wage Model already recommends" and "invest a lot in their training – hard and soft skills – and we give them a career path where people who do these jobs feel like they want to do this in the long haul."

"So this helps our business as well, because it enhances our retention rate and it keeps our client satisfaction very high. That’s on the supply side.

"We’re also working towards a model ... where we want where we want to change our model to one where there is a worker collective, where workers actually know the company that they work for—many cleaners do not actually know the company they work for—and they actually feel a sense of ownership and belonging to a community," said Mr Thong, who highlighted that his startup sees workers as "assets and not liabilities".

Mobile applications "specifically for the elderly" to enable them to have flexible working hours

Nimbus also, according to Mr Thong, invests heavily in technology for the benefit of the cleaners, particularly aged cleaners.

"We build a lot of mobile applications specifically for the elderly that give them the chance to have flexible working hours, performance-based incentives, which is -- what Kurt mentioned -- to get rid of the flat “basic wage” conversation that we currently have and that workers currently suffer … and we do a lot by getting accurate timesheets from accurate timestamps.

"We’re able to pay them more frequently, which solves a lot of their financial situations, because low-income individuals tend to have very tight cash constraints," he said.

"On the demand side as well, we are changing that conversation, because we are able to combine more services to value-add to our customers. So the conversation is no longer just around the cost of cleaning, but about the entire value for money by having a convenient tech-enabled facilities vendor. We are changing our cleaners to become our brand ambassadors, and it justifies a higher living wage.

"That is the experiment that we’re trying to do, but no man is an island, and we need to work very closely with the government, with policymakers, as well as responsible service buyers – I think it’s not mentioned so far – to really push this industry forward. So I hope we can have a good discussion about wages, and hopefully, let’s collectively make services great again in Singapore."

The system "doesn't encourage contractors" such as Mr Thong due to price-based system: Prof Koh

Ambassador-at-Large at the Ministry of Foreign Affairs and professor of law at the National University of Singapore Professor Tommy Koh pointed out that the government's contracting system at the moment "doesn't encourage contractors" such as Mr Thong.

"If you look at the way we [the government] award contracts, it's by price ... It's a spiral to the bottom, you know?" he lamented and added, "We, the government, should set an example ... why are we not setting an example?"

Prof Koh asked Mr Thong how he is able to do what he has been doing for the benefit of his employees, and yet secure contracts, given that contracts, particularly government contracts, are often awarded to service providers with the lowest rates, Mr Thong noted that Nimbus "only tender for small office spaces' contracts" as currently he is the sole negotiator "with every single service buyer".

"There's a bit of a tug-of-war there; that's the answer to your first point, but ... we are definitely not able to be the cheapest in the market, because we pay our [cleaners] 20 per cent above and beyond what the PWM prescribes. So the argument centres around "How do you raise the productivity of the workers?"

"I think a lot of conversations about productivity of cleaners right now is centred around robotics, like, "Can you clean the toilet faster?" Or, "Can you use more machines?"

Salary increase and remuneration ought to be based on performance to increase worker productivity: Thong

Consequently, he revealed that his startup is currently building "a lot of software" for its workers at the moment. The company will also put in effort in teaching older cleaners -- "the uncles and the aunties" -- how to use such software "to do things like fault reporting, to do things like checking in and checking out ... so that there is a performance review, a feedback loop from the clients, so that we can pay them [accordingly]".

"This helps us to identify better performers and to promote them accordingly in the system," he said.

While Nimbus pays "a high enough basic salary" at S$1300 per month, Mr Thong assured that high-performing cleaners could "get up to S$1600 per month."

On minimum wage: Consumers "set the ceiling"; service buyers must be made to "see the value in having a professional service done to them"

Noting market forces, Mr Thong said: "There is a question about the effect on prices though, because what we are touching on is local services. This is not manufacturing where we are in a globalised world and we are competing in an open economy where prices will always go down. We are talking about local services. So an increase in a dollar would definitely increase the cost, the general price levels of the services that people consume.

He highlighted the role of the consumer in contributing to better wages for low-wage workers: "So it is a question of how much the consumer willing to bear. And this is a question that we must take seriously, because politicians can say that "we should raise the minimum wage", voters can say that, you know, "the minimum wage should be S$15, S$100" ...

"At the end of the day, it's the customer that sets the ceiling. We have to educate responsible service buyers to see that value in having a professional service done to them."

"I just think that businesses, especially traditional businesses, in the service line have developed quite a bad reputation of late, and it sounds like capitalism and businesses are no longer a force for good, but I still believe that the only way forward is for businesses to innovate, to invest in technology, and to really empower people at the ground.

"So I think that we need to work together closely with responsible service buyers together with the government to really push this agenda forward for this to work, and I think that ultimately, the right thing in business might just be doing the right thing.

"We really need to work closely with our clients to make sure that they understand the point and importance of a clean and well-maintained workspace, how it's actually linked to their productivity in the office environment ... so that we can at least achieve a better outcome for cleaners and service workers in the blue-collar space."