Easing Singapore’s labour crunch – the retailers’ way

July 15, 2014 / By  

Businesses in Singapore continue to grapple with a manpower crunch and escalating labour cost issues as the Government continues to tighten foreign worker inflows in a move to reduce public discontent over the perceived over-crowding in public spaces. Effective 1 July, 2014, another round of foreign worker levy hikes came into force and labour-intensive businesses, such as food and beverage and retail, will bear the brunt of this. While the long-term prospects of rising consumer demand led by population growth and rising wages sound attractive, in the immediate-to-short-term, retailers with labour shortages have scaled down their operations if not deferred their expansion plans in Singapore. This could dampen demand for retail space, rein in rental growth and lead to an increase in the vacancy rate of retail space in Singapore.

However, with mind-set changes and training, there are ways to ease this labour crunch challenge.

Overcome age-prejudice and train older workers. Singapore has one of the world’s highest life expectancies at 84 years compared to the global average of about 72 years, according to the Department of Statistics. With a longer life expectancy and rising healthcare costs, older people are also motivated to seek or continue employment. Opening up employment opportunities to older people through training and the re-shaping of job scopes similar to what McDonald’s Corporation has done, would help to ease the labour crunch. Such employees would also be considered as additional local head counts under the Dependency Ratio Ceiling, providing employers with the right to hire additional foreign workers.

Attract young people from Generation Y and Z into the workforce. There are an increasing number of students seeking part-time employment to finance their lifestyles and gain work experience. Employers could tap into this potential source of labour by redesigning job scopes to offer flexibility to students.

Open training and employment opportunities to physically-challenged individuals. With greater acceptance and proper training, physically-challenged people can become economically independent. For example, in the food and beverage business there are many jobs available that require simple skills, such as serving food, or clearing plates. Han’s Café and Starbucks are examples of food and beverage companies that have opened doors to the disabled in recent years while fashion retailer Uniqlo has also introduced this initiative. Such workers further contribute to the Dependency Ratio Ceiling for the hiring of additional foreign workers.

In the near term, these are practical ways for companies to hire locals through job re-design and maintain access to foreign workers. In the long term, jobs will need to be re-designed to enable greater productivity and higher wages for locals to reduce long-term dependence on foreign workers.

Notify of

Inline Feedbacks
View all comments

Talk to us 
about real estate markets.