Chapter 3. Public investment in skills development and utilisation in Singapore

Singapore has a comprehensive workforce development system supporting all key industries for initial as well as continuous training. Overall, the system is one that is characterised by a high level of public investment in skills development, with skills utilisation efforts being attempted only as sub-elements within the system. This chapter looks more closely at how skills utilisation policy has been integrated into Singapore’s policies in the past and the plans for the future.

KEY FINDINGS

Singapore has enjoyed impressive economic growth within its short history of industrial take-off. Going forward, attention will need to paid to ensuring that GDP growth is driven more by productivity improvements (and less by labour growth), with a highly skilled workforce serving as the basis for future competitiveness.
Singapore has a comprehensive workforce training system supporting all key industries for initial as well as continuous training. While skills utilisation policies are still relatively rudimentary compared to the approach to skills development, more efforts are being seen in this area.
Going forward, the SkillsFuture initiative will drive much of Singapore’s workforce development policies, with a focus on instilling a culture of lifelong learning. Within this initiative, Sectoral Manpower Plans focus on skills issues relevant for specific sectors. The bulk of these plans are focused on skills development, although some include a consideration of skills utilisation.
The Enterprise Training Support Schemes, introduced in 2013, provide grants to employers to make skills development more relevant to workplace performance and link skills acquisition and utilisation to employer retention. Two case studies of employers that have used this grant demonstrate that this type of integrated approach can have meaningful returns.

Background

Singapore has a comprehensive workforce training system supporting all key industries for initial as well as continuous training. However, it has reached a stage of development where policy makers are beginning to ask exactly how skills can make an impact in the workplace, and in what ways skills support individual career building. The concept of skills utilisation is gaining policy attention, and some initiatives have been introduced in Singapore in recent years in this respect.

Overview of labour market and skills issues in Singapore

Within its short history of industrial take-off, the Singapore economy has demonstrated that it is resilient, growth oriented and capable of dealing with a series of industrial restructurings. Figure 3.1 shows that the average annual GDP growth rate in Singapore was 6.8% between 1976 and 2015. There were four economic down-turns: a self-induced “wage correction” drive to discourage low value-add production in 1985; two international financial crises in 1997 (Asian Financial Crisis) and 2009, and the Asian SAR epidemic in 2003.

Recovery from the last financial crisis was quick compared with western countries that were affected, and the economy reached a record growth rate of 18.9% in the second quarter of 2010. Recent GDP growth tends to be below 5%, a profile that is more similar to that of western industrialised countries. In 2015, the economy is estimated to have grown by 2.1% slowing from 2.9% in 2014 – generally accepted as a sign of a maturing economy.

Also similar to most western economies, Singapore’s slowing growth has been coupled with slow productivity improvement. Productivity has been long been a policy concern in Singapore. Some research has argued that much of Singapore’s growth came from adding more workers to the national output (e.g. by raising the participation amongst women and by recruiting more foreign workers) (Young, 1992; Krugman, 1994; Ketels et al., 2009).

These economic factors form the backdrop for Singapore’s labour and skills policy – one that focuses on constant up-skilling, re-skilling for re-structuring and paying attention to skills utilisation.

The labour market context

As Tableau 3.1 shows, the Singapore workforce has grown substantially over the last 10 years. While the resident workforce grew 26% during the period, foreign workers made up the rest of the overall 50% increase. Foreign workers now make up around 40% of the total workforce. And there are at least two reasons behind the significant growth of the foreign workforce in the last 20 years. Firstly, labour demand grew much faster than the growth of labour supply during the relevant period, resulting in a significant labour shortage. Secondly, there are some sectors (e.g. construction, some sections of manufacturing and domestic services), which are considered less attractive by the local workforce. Foreign workers are seen as an answer in the short run.

Tableau 3.1. Key labour market statistics, Singapore, 2004 and 2014
	2004	2014
Total labour force (‘000)	2 341.9	3 530.8
Resident labour force (‘000)	1 733.4	2 185.2
Highest education attained (%)
Degree	21.6	32.0
Diploma and Professional	14.9	19.5
Age distribution (%)
Under 30	21.8	18.8
30 – Under 50	56.8	46.9
50 and above	21.4	34.3
Employment and unemployment rate (residents)
Employment rate, 15 and over	59.6	64.5
Employment rate, 25 64	72.3	79.7
Unemployment rate (seasonally adjusted) (%)	4.7	2.8
Occupational composition (residents)
Professionals, managers and executives	27.0	30.1
Associate professionals and technicians	19.0	23.0
Clerical, sales and service workers	26.0	24.8
Production, transport operators, cleaners and labourers	28.0	22.1
Median monthly income (2014 prices)
Including employer CPF	2 326	3 770
Excluding employer CPF	2 100	3 276
Source: Labour Force in Singapore, 2014; Singapore in Figures, 2015.

While the workforce is ever better educated in 2014 compared to 2004 – with 51.5% having tertiary education – it is also aging like most industrialised countries. Figure 3.2 shows that the median age of the workforce has gone from 40 years old in 2006 to 43 in 2015.

In Tableau 3.1, it is noticeable that while real median income has stagnated in many developed economies in the last two decades, Singapore’s real median income continues to improve. The 2015 Budget Speech by the Deputy Prime Minister identifies the importance maintaining real income growth in order to avoid the so-called “middle income trap”. At the same time, he also identifies skills as being one of the critical policy areas for future government action:

“In the US, Japan, UK and much of Europe, there has been no increase in real incomes over the last decade for the median household… Our incomes in Singapore have fortunately continued to grow in the last decade, for both middle- and lower-income households. The median household income per member has in fact increased by 36% in real terms. But we face the same global realities and challenges as these countries. . . We must reach our next frontier as an economy, with firms driven by innovation, and higher incomes coming from deep skills and expertise in every job.”

The above statement reflects two (inter-related) policy concerns in Singapore: a) the need for productivity improvement – future growth ought to be more innovation driven and less by labour growth; and b) continuous skills improvement as the basis for Singapore’s future competitiveness. These two challenges underpin the approach to skills development in Singapore. The former is addressed via a series of productivity and process improvement programmes that aim at productivity and innovation. The latter could be achieved via the skills-focused SkillsFuture.

Specific labour market challenges

The need to adopt a lean workforce approach to growth

Rapid and continuous growth in the last 12 years has brought a large number of foreign workers to Singapore. As mentioned, the proportion of foreign workers within the total workforce now stands at 40%. As well as the issue of sustainability, there have been frequent debates about the desirability of having a huge proportion of foreign workers in the workforce, as many of them will one day return to their home countries. The current policy is to reduce the reliance on foreign workers and adopt the so-called “manpower-lean” strategy.

There are two dimensions to the manpower-lean strategy. The first is that in the future, foreign workers will account for only around one-third of the total workforce. Hence, future growth is not expected to be met by increasing the number of workers. The second dimension is that in order to become less reliant on foreign workers, there is a simultaneous effort to strengthen the “Singaporean Core”. This refers to the need to have a much better skilled local workforce that can operate in a “manpower-lean” environment.

In November 2015, the Lean Enterprise Development (LED) scheme was announced which encouraged pioneers and early adopters of lean-manpower practice. In January 2016, nine trade associations and chambers and industry partners (known as the “Lean Enterprise Development Multipliers”) were appointed by the government to promote LED amongst SMEs.

Implementation of the manpower-lean strategy appears to be focusing on SMEs. LED is mostly about providing advice to SMEs to take advantage of common solutions and redesigning work to attract the local workforce (e.g. improving manufacturing jobs that are generally unpopular with the resident workforce). In addition, it is clear that to deliver LED, the productive system will have to change so that a different labour-technology mix and/or a higher level of skills utilisation can ensure that output does not suffer as a result of implementing lean-manpower policy.

The need to focus on skills utilisation

Since the Singapore Workforce Development Agency (WDA) was established in 2003 to co-ordinate all public programmes for training (see next section for details on WDA), the number of training places has been steadily increasing. By 2013, one in ten resident workers participated in publicly provided (vocational) training (see Figure 3.3), though this was calculated at the lowest denominator, achieving one “statement of attainment” – representing one-tenth of a full qualification.

There are a few reasons for this relatively high participation rate. Firstly, public funding is very generous – in most cases the state provides a 90% subsidy for vocational training course fees, if not more. In general, state funding is applicable at all levels of training, including supervisory and managerial as well as tertiary education in technical subjects. Secondly, the extensive coverage of the 34 WSQ (national qualification) frameworks means that all of the major sectors are “connected” to the national training system. Thirdly, up until 2015, the WDA was organised with “frontline divisions”, with specific staff dedicated to engaging employers to send their workers for training. There is an “absentee payroll” payment to compensate employers’ loss of staff time. The combined effect of these factors means that publicly provided is attractive and nationally recognised.

Since 2014, there has been increasing recognition of the need to examine the impact that this high level of training has. At this time, the WDA reorganised itself into Industry Divisions (IDs) so that in addition to engaging employers in training, the WDA also had the remit to examine how workforce development programmes impact organisational performance. As a result, the WDA IDs are also key members in the Sectoral Manpower Plans (SMPs) that were launched in 2014 (see Section 3 for details on SMPs). SMPs are intended to foster skills deepening, career building and greater skills utilisation via a sectoral approach to skills development. Since 2014, workforce development policy in Singapore has therefore started to pay attention to the demand for skills agenda, and with it the “black box” of the productive system (see introduction chapter).

The need to instil a culture of lifelong learning

Based on the above, it should come as no surprise that the Singapore government is very much “pro-training” and “pro-learning’’. Huge resources have been invested into the system to provide a comprehensive national workforce development structure. This reflects the “developmental state” strategy that was so vital for Singapore to achieve its industrial “take‐off” in the previous decades. Workforce development has been key to Singapore’s progression moving up the global value chain (Green, 1997; Brown et al., 2001; Sung, 2006; Gopinathan, 2007). Indeed, learning has been defined as lifelong, mastery oriented and highly responsive to economic changes.

The current workforce development agenda is mostly determined by that of the SkillsFuture agenda which came into operation in late 2014. In SkillsFuture, lifelong learning is the basis for all workforce development activities as well as learning in general – whether in work, school, retirement, or otherwise – as long as it is leading to skills mastery and economic resilience. However, unlike previous policies, the lifelong learning strategy takes a different approach. No longer is it sufficient to provide just the infrastructure, funding and incentives. Lifelong learning in the form of SkillsFuture will require a changing mind-set, namely the citizens’ attitudes towards learning and how individuals perceive the efficacy of learning in the wider society. This is new territory and a new challenge for the highly successful workforce development system in Singapore.

Singapore institutional framework supporting skills utilisation

Workforce development has been the sole responsibility of the Singapore Workforce Development Agency (WDA) (within the Ministry of Manpower) since 2003. There has been a clear separation of government responsibility between education and training before employment (or pre-employment education and training, PET) and continuing education and training (CET) after full-time education. As such the Ministry of Education is responsible for PET and the WDA for CET.

However, with the implementation of an overarching skills agenda, known as SkillsFuture, in 2014, the current institutional framework is going through some fundamental changes. This will eventually lead to the dissolution of the distinction between PET and CET. By the end of 2016, skills policy will then have a holistic framework and co-ordination, covering non-tertiary and tertiary workforce education

This section first explains the existing institutional framework as it stands in January 2016, which will drive workforce and lifelong learning for the population in the next few years. Finally, it discusses the changes to come by the end of 2016. The changes will largely be re-allocation of responsibilities with the main thrust of policy still being driven by SkillsFuture, and much of the new structure evolving from the existing one.

Singapore Workforce Development Agency

All workforce development and employment matters are the responsibilities of the Minister of Manpower (MOM) until the change later in 2016. At that point, the responsibilities of workforce development will be shared between the MOM and the Ministry of Education.

The current structure can be traced back to 2003 when MOM set up a dedicated unit, the Singapore Workforce Development Agency (WDA) to oversee all training policy initiatives and implementing activities. Broadly speaking, WDA had two tasks: 1) To establish a sectoral and competence-based national qualifications system (the Workforce Skills Qualifications, or WSQ); 2) bring together all the previous training programmes so that they can be supported by the WSQ system.

In contrast with the old system, the WSQ system under the WDA is seen as a more comprehensive, coherent and scalable tool to enhance employability. It is much more systematic in providing support for continuous up-skilling and re-skilling to the workforce as a whole.

The WDA has following functions:

to establish sector-based curriculum frameworks (33 in 2016);
to administer funding for all publicly subsidised training;
to quality-control training delivery via a system of mostly private sector training providers;
to facilitate access to obtaining training and employment opportunities;
to establish coherent and continuity for training via career initiatives;
to liaise with industry lead-bodies for the formulation of sectoral manpower policies; and
to enable proactivity for the training sector via engagement with employers.

Figure 3.4 shows the seven functions in a relational map. As highlighted in this map, industry involvement in designing and delivering training is central to the workforce development effort and making training relevant to industry. However, the WDA system is mostly focused on impacting the supply of skills, rather than the demand.

The impact of WDA is substantial in terms of its reach on the skills supply side; funding is very generous, removing much of the financial barrier in most cases who would want to take up training, and it is a main vehicle behind Singapore’ lifelong learning effort. Under SkillsFuture, WDA has extended its role in the area of influencing skills demand within the workplace via Sectoral Manpower Plans (SMPs), though this is still a small part of its work in terms of its overall functions and domains.

SkillsFuture

In 2014, the Singapore government introduced the SkillsFuture programme with a simple slogan – “Develop Our People”. On the SkillsFuture website, SkillsFuture is described as the following:

SkillsFuture is a national movement to enable all Singaporeans to develop to their fullest potential throughout life. Whichever stage of life you are in, whether you are in your schooling years, early career, mid-career or silver years, SkillsFuture will enable you to take advantage of a wide range of opportunities – to help you realise your aspirations and attain mastery of skills.

The Deputy Prime Minister, Mr Tharman, further emphasised that:

“ … SkillsFuture is not just about boosting skills supply, but boosting skills demand and employer recognition of workers’ skills and mastery.” (Business Times, Nov 16, 2014).

Under SkillsFuture, there are four key components in the national drive to imbue relevant skills for the future in the population. These are:

to help individuals to make well-informed choices in education, training and careers;
to develop an integrated, high-quality system of education and training that responds to constantly evolving industry needs;
to promote employer recognition and career development based on skills and mastery; and
to foster a culture that supports and celebrates life-long learning.

These objectives have been translated into a series of education and training programmes, as shown in Figure 3.5.

There are essentially three key dimensions to SkillsFuture. The first is the notion of lifelong learning – hence a variety of schemes support individual learning, irrespective of the life stage of the individual. The second is the involvement of employers – e.g. the use of internships etc. – to support learning. The intention is to ensure that graduates can be more employable and have real world experience when finishing their education. The third is the emphasis on career. SkillsFuture supports career building in terms of learning for “mastery” as well as career changing.

It can be seen that many of the elements in SkillsFuture are still about the supply of skills. In that sense, the approach of SkillsFuture is not that different from the past or workforce development in other countries, though the strong emphases on lifelong learning, skills deepening and career stand out. Also different from the past and workforce development and elsewhere is the attempt to influence the demand for skills through the Sectoral Manpower Plans (SMPs). This is the only device in SkillsFuture that may have some influence on the “black box”.

The use of Sectoral Manpower Plans

WDA will co-ordinate the delivery of Sectoral Manpower Plans under SkillsFuture. SMPs are produced by tripartite bodies that have a variety of stakeholders ranging from employers, professional bodies, trade associations, unions, regulatory bodies (if applicable) and state agencies.

SMPs are five-year-cycle manpower and skills plans for each key sector targeting industry growth and productivity improvement. However, plans may vary a great deal from each other because of the development issues relevant to each sector may differ. Hence, in some sectors, “manpower-lean” working may be critical, while others may focus on skills retention, creating attractive career pathways, improving job quality, greater use of technology or flexible working and so on.

To get a sense of how SMPs may impact on skills utilisation, we illustrate two contrasting examples of SMPs. While SMPs differ from sector to sector, most of them focus on the supply of skills. This particular pattern reflects the fact that the reality of workforce development policy is more at home with the supply side approach because it is relatively easy to produce training places, and it is rather difficult to influence companies’ internal work processes of companies that may lead to improvement in skills utilisation.

Retail SMP

There are six sub-sectors in the retail SMP: fashion and sporting goods, furniture and furnishings, jewellery and timepieces, supermarkets and convenience stores, consumer electronics and department stores. The sector covers 15 859 enterprises, 125 000 employees and 1.4% of GDP. Around 64% of the sector’s value-added comes from the larger retailers. Not only does the SMP need to identify the “footprint” of the sector, the SMP also identifies the emerging trends in the sector. These include changing shopping behaviour, rising consumer expectations, digitalisation of retail work and potential overseas opportunities.

In the Retail SMP, there is also an element of addressing the skills needs related to the emerging trends discussed above. The SMP working group proposes that the general understanding of retail skills being (previously) differentiating between technical and soft skills is no longer adequate. It sought to provide an identification that is closely linked to the workplace. In Figure 3.6, the Retail SMP differentiates soft and technical skills into higher (e.g. the nature of international customers managing multi-sales channels) and technology and processes-related skills (e.g. designing technology-based and customer-centric workflow, re-organising for multi-channel operation).

All these skills plans will have implications for skills redesign and skills utilisation in the retail workplace. One such area is the creation of new roles as a result of increasing technology-enabled working. For example, more technology-based transactions will enable sales assistants to shift their work towards higher value-added activities. More e-commerce specialists will be required as a result of a multi-channel approach being widely adopted in the sector.

In the coming years, the sectoral approach to skills development in retail will focus on two broad strategies (also see Figure 3.7):

Strengthening enterprise capabilities – remodelling businesses and re-designing jobs; improving core human resource competencies that support skills development.
Deepening skills – redesigning career structure that is more conducive to attracting workers with more education and skills; encouraging continuous learning for future skills needs.

These will provide an action plan for the next five years. However, as already mentioned, other SMPs could be quite supply/learning focus, and skills utilisation would seem absent from the plan. The next SMP for the biologic sector is one of those examples.

Biologics SMP

The biologics sector is one of the younger industries in Singapore. However, it has made huge progress in the last 20 years, and there are now more than 50 commercial-scale manufacturing plants in Singapore, employing over 16 700 people. Biomedical manufacturing accounts for 20.5% of the total manufacturing output in Singapore. As a single sector, it contributes 3.8% of the GDP in Singapore in 2013.

Whilst this is a growing sector with good pay and high demand for knowledge and highly skilled workers, the biologics sector constantly faces a skills supply challenge. The polytechnics – the main source of skills supply – are producing reasonable numbers of graduates each year. However, attrition rates are high as workers move around a lot for better pay.

Figure 3.8 shows that the biologics SMP focuses mainly around the creation of a larger skill supply pool, strengthening career guidance for new entrants and deepening skills in order to attract and retain skilled workers. There is no provision in the SMP about influencing skills utilisation at work.

Although it is known that staff turnover is an issue, the same issue also affects most sectors in Singapore because of the tight labour market. Perhaps one of the reasons for the biologics SMP to focus on skills supply is that the biologics employers – all multinationals – have strong internal structures in areas such as work processes, technology. They drive the skills content of jobs. As a result, public policy focuses on entry skills supply, e.g. technical graduates.

Overall, SMPs are very new initiatives. Whilst there is yet to be any assessment on their effects, it is clear that some SMPs are making attempts to influence skills utilisation. Another key learning point is that even if skills utilisation is important, there are lots of reasons why public policy cannot neglect the supply side of building individual skills. For example, by promoting the concept of career, it is inevitable that the public skills supply structure still plays an important role, e.g. in supporting people changing careers, building employability skills and so on.

SPRING Singapore

As discussed earlier, productivity has been long been a policy concern in Singapore. SPRING Singapore (The Standards, Productivity and Innovation Board) is the main agency dealing with productivity. It is a statutory board under the Ministry of Trade and Industry (MTI). Although its formal function concerns “national standards and conformance”, much of what SPRING does is about enterprise development and improving productivity. Thus, SPRING’s functions cover business process design, business performance (especially amongst SMEs), facilitating new start-ups, introducing business excellence models and encouraging technology adoption. SPRING provides grants, advice, subsidised consultancy and diagnostic toolkits.

To influence skills utilisation in the “black box”, training is not the only public policy needed. Work processes, work practices (e.g. high participation and so on) and technology adoption play an important in creating synergy with workforce skills. The recognition of these overlapping factors, workforce development policy in Singapore is also linked to that of improving productivity. And as a result, SPRING works closely with the WDA in areas of productivity.

The Enterprise Training Support scheme and impact on skills utilisation

Against the backdrop of productivity issues and skills utilisation, the WDA introduced the Enterprise Training Support (ETS) scheme in Singapore in 2013 with the following aims:

Raise employees’ productivity and skills levels;
Attract and retain valued employees by developing good human resource (HR) and management systems and practices tied to training;
Attract and retain valued employees by benchmarking compensation and benefits.

Unlike other publicly provided training courses, especially the wide range of vocational qualifications under WSQs, ETS seeks to make skills development relevant to workplace performance and link skills acquisition and utilisation to retention.

There are five components in ETS. Employers can apply for any of them, if appropriate:

Training Grant – As a condition to the grant, a training plan is mandatory. The grant has two aims: the first is to make skills training formalised within the business operation. By having a plan and envisaging what role skills may take, skills training is more strategically positioned. The second is to make skills training more easily accessible within the relevant business environment (e.g. making learning possible without the need to go to classrooms). Accordingly, the grant also supports the cost of structured non-WSQ training (e.g. e-learning or mobile-learning modes of delivery) and structured on-the-job training that is supported by WSQs (with training hours forming at least 30% of an enterprise training plan). The latter is an attempt to make learning recognised and explicit when rewarding employees’ effort in delivering their work and duties.
Training Capability Grant – When training is poorly conceived or delivered, it is often due to the lack of capability within the organisation. In such cases, even writing a training plan is something unfamiliar to people who may be experts in their business operation. This grant enables the organisation to build an in-house capability in terms of training delivery or infrastructure (e.g. one member of staff to obtain the train-the-trainer WSQ qualification or to become an expert in job design).
Curriculum Contextualisation and Alignment Grant – For skills to make a difference at the workplace, much of the publicly provided training may have to be adapted to the specific needs of the workplace. For example, WSQs have been criticised by employers as being too “generic”. For example, customer service training for retail which is commonly available under WSQs can be a little “remote” in the case of a care-related job. This grant is to support the contextualisation of the training provided, including the materials necessary for the delivery of that training. This grant also covers the development of on‐the-job (OJT) blueprints.
HR Development Grant – The grant is intended to strengthen the human resource system in an organisation so that skills can be integrated into the wider structure of the business. For example, while skills training supports skills acquisition, in order to retain skills, it is also necessary to look into how skills are related to career paths within an organisation. If skills acquisition and career are connected, skill utilisation may increase as a result of workers being more embedded or committed in the organisation. Within the framework for high performance workplace practices, this is linked to the idea of “discretionary effort”. Hence, a well set up HR function can go beyond mere administrative matters to being strategic in leveraging skills utilisation. The HR Development Grant supports such activities.
Compensation and Benefits System Review Grant – To support career paths as well as to attract and retain skills, pay is an important part, especially in a tight labour market such as the one in Singapore. Many businesses overlook the strategic importance of pay in relation to their skills strategy. This grant is to defray costs of engaging consultancy agencies to conduct enterprise-wide industry salary benchmark reviews and establish an appropriate wage structure to support the career structure.

The initial scheme was set up in 2013 and subsequently extended to March 2016. ETS is a voluntary scheme. The overall impact is unknown at this point. However, some specific case studies can show where the scheme may produce some positive results. The following section examines two case studies in order to illustrate the benefits of ETS within organisations. Before looking at these case studies, it is useful to reiterate that skills utilisation should not be perceived as an isolated problem which can be dealt with independently. In most cases, skills acquisition, utilisation and retention may be inter-related. All of the case studies shown here suggest that skills utilisation is either part of another skills problem or that skills acquisition is a critical bottleneck to achieving greater skills utilisation. ETS recognises this complexity and treats both skills acquisition and utilisation as part of the overall problem of organisational performance.

Case study one: systematising and expanding on good practices in a garden centre and landscaping business

Background

The first case study examines a growing company with a humble beginning – a small flower shop that has grown in the last five decades. It has become one of the business leaders in the horticultural sector. The original flower shop business has much expanded and it is now a full-fledged and diversified urban horticultural business.

The business has large nurseries that support the landscaping division. The diversity of the business necessitates a wide range of skills requirements. There are a few hundred professional workers ranging from florists, horticulturists, designers, engineers, quality control and support staff for marketing and administration. The growth of the business was largely due to the vision of the business owner who saw a wider picture for the florist business, building on the quickly growing urban landscaping needs.

Skills are vital and strategic in the business model for both current business and future expansion. In their vision statement “… (The company wants to be) the employer of choice by employees, customers, vendors and contractors.” To do this, it has a productive system that reflects the Strategic Skills Model; namely it seeks to achieve growth through a people-focused approach that “combines people and the brand”, resulting in a highly motivated workforce that serves the customers and the entire value chain well. Through a highly devolved decision-making system with devolved budgets to incentivise ownership and participation, the company is in effect embracing a form of high performance working model that emphasises “mutual gains” and “discretionary effort”. Skills and their utilisation are vital to support discretionary effort.

However, while the business owner recognises the importance of skills from the very beginning, the business and its skills base actually grew in an ad hoc manner - much of it was learning on the job with little systematic elements to speak of. This has worked in some areas, but also resulted in gaps in others. From the management point of view, there was actually a clear understanding of what skills were needed; what was missing was a management system that would support that understanding systematically. That was the motivation for the company to turn to ETS for help.

The skills utilisation challenge for this case study

This business has a successful model, but it needed a better management system to support future growth. The company has had to turn away new business because it did not have enough skilled people to take on new work. At the same time, this was a company that did not suffer from the lack of focus on skills utilisation. Instead, the company had a very good “high performance working” model that relied on mutual gains and discretionary effort.

As well as the devolved decision-making system, the reward system was geared towards employees who would take on extra responsibilities leading to performance. There were already practices that enable the sharing of skills amongst the different divisions. However, many of these good practices vital to skills utilisation were built around ad hoc on-the-job training and job rotation.

The company also identified the next stage of growth involving skills deepening and much higher quality service and products to customers, i.e. expert knowledge and products (including consultancy) that could provide a significant competitive edge. Skill utilisation could no longer be supported by “training by chance”. Thus, the business turned to ETS to provide appropriate consultancy and in-house support to align this new business focus and skills provision and utilisation.

The ETS journey and skills utilisation outcome

The skills requirements in the company were quite complex - from technical skills in horticulture, marketing, supervision, design, accounting, supply chain management, logistics, quality control to site management. The ad hoc approach to training led to rather uneven depth of knowledge amongst workers who work in the same division. And as a result, skills utilisation and business impact were also uneven and largely influenced by chance.

One of the most significant impact of ETS was to initially embed a long-term advisor to examine the barriers between the new business objectives and the existing skills base of the organisation, which included examining the relationships amongst skills required (including vocation qualifications required under WSQs), human resource issues, rewards and performance, and the concept of careers amongst the different occupations within the organisations. This analysis suggested that skills utilisation under the new business focus could only be improved if the company embraced a structured approach to providing training while maintaining the already good systems of high performance working. This formed the basis for a new training plan.

The second task was to use ETS support to train an in-house expert so that he/she could convert existing training materials (in their different formats and depths) to pedagogically informed and standardised training “blueprints”, many of which could then be supported by existing WSQ qualifications.

The last task was to align other internal systems, e.g. pay, promotion and careers to the skills system. Again, a consultant was needed to provide a fresh look at the alignment between skills acquisition and utilisation.

ETS was instrumental in building a new structure for skills utilisation. Not only did it provide the funding, but it also provided the much needed external experts who were familiar with the national qualification system, training design, curriculum expertise and business needs. This sort of consultancy was rare among the traditional consultancy firms.

At the time of study, the business was towards the latter part of the implementation of ETS intervention. The feedback was that the new skills management system provided a clearer and systematic structure to manage training and skills utilisation, and to link skills utilisation to the new business objectives, namely deepening of knowledge of skills for better service and products.

Case study two: making it work in a fast-food outlet where customer engagement is key

Background

The second case study concerns an innovative company that is operating in a highly competitive fast-food industry. This small fast-food chain has been very successful in building up a niche business model that focuses on healthy eating using salads as a main attraction. It also emphasises the need to “educate” customers where their food is coming from, who makes it and the environmental issues that are relevant to healthy eating. Nutrition and health information can be seen on the walls in their high street outlets.

While there is little competition in the healthy eating niche in the fast-food industry as a whole, the business model relies on cleverly marketing healthy eating to succeed. This is no easy task as many potential customers perceive salads as bland or uninteresting. A high level of skills related to business development is crucial for the business to work, but these apply to relatively few jobs in the business. Most jobs are very similar to other fast-food outlets, being low skilled and front-line sales oriented. However, to make a sustainable business in this niche, the business model has to engage customers. This is particularly important for this business compared to other fast-food models, where the customers have already bought into the products. While the business model is currently making good progress, the company is also hoping to expand overseas via a franchising model.

However, being in the fast-food industry, it cannot escape many of the skills and employment conditions that are common to fast-food producers. For example, it recruits from very similar pools of workers such as students, foreign workers, part-time and older workers. Pay is not high and work hours can be long and include weekends. This group of workers may not be all that interested in developing a career, and learning additional skills. Learning may be perceived as a burden.

However, there is an aspect of this company that is unique: the management firmly believes that an effective workforce is one that is “happy”. Like the mutual gains principle under high performance working, management has deliberately created a highly social environment in which the workers have a strong sense of belonging, e.g. putting their like-peers in the same work teams, supporting bonding and their participation in some areas of decisions making such as working on customers’ feedback.

The skills utilisation challenge for this case study

The skills challenge in this case study is quote large. On the one hand, 90% of the workforce are engaged in front-line operation where they serve the customers. These are relatively low-skilled jobs, but at the same time the business model requires that employees reach out and engage customers in the healthy eating concept. This business strategy requires everyone, including frontline staff to utilise more skills than just serving over the counter. These additional skills are similar to soft-skills, including emotional labour. Workers must be able to get along well with each other and effectively reach out to customers.

When put in the context of low-skilled fast-food production, there can be a dilemma – on the on hand, the business is pushing for high standard and high quality food within a fast-food environment that is based upon efficient work design – something that is not that different across various fast-food production lines. Jobs are generally broken into small and readily identifiable skills/tasks where the workers can perform without much thought. The workers have to deliver a salad that is either designed by the food designer or one that is chosen by the customer. The company achieves this by imposing strict and standardised procedures in relation to food production. So this part of the work has little relevance to our discussion on skills utilisation – the level and type of skills utilisation are static.

However, on the other hand, the business model focuses on promoting health food eating around the salad-based menu. Every worker is an ambassador to sell the product and the experience in buying such food. It is in this area that the workers have greater autonomy to engage the customers and are encouraged to do so. Skills utilisation becomes an important area for skills training as well as being a business growing tool.

In addition, the company recognises that the early model of training, which is entirely on the job, designed around using one dedicated trainer who circulate amongst different outlets to train the new workers, is highly problematic in scaling up to more stores. When skills acquisition suffers, skills utilisation is more difficult to be realised.

The ETS journey and skills utilisation outcome

This employer sought out ETS for two reasons, both generally related to skills development. However, there are links with skills utilisation, as the more effectively skills training can be delivered, the more room there is for the company to encourage skills utilisation.

The first reason for ETS involvement is the need to contextualise the standard training provided by the WSQ qualifications system, e.g. food hygiene, customer service, supervisory management and train the trainer. An expert advice or consultancy is needed to design the contextualised training which also meets the requirements of the competency standards. The idea is that unless the new skills are delivered via a more realistic context, the workers are unlikely to be effective in using their selling skills to entice new customers.

The second area of help is to create a mobile learning platform using the newly created/contextualised training materials to support on-the-job training. This will remove the constraints of the one dedicated training manager. As the training is now also “on-demand” and customised to the needs of the worker as well as the customer, skills and learning become more relevant to skills utilisation. For example, during engagement with the customers, the workers are able to tap into relevant nutrition information that is relevant to the customised menu for a particular customer, healthy eating and related life-style matters.

As in the earlier case, ETS therefore transform skills training from one of supporting the basic operation to one that bolsters the impact of the employer’s work. Obviously, the community issue (e.g. supporting workers to choose their teammates) mentioned earlier is not insignificant as it is the basis on which workers will be happy to exercise more discretionary effort and the skills that they learn through discretionary effort.

Conclusion

While skills utilisation will not replace more traditional public interventions to boost the supply skills, it is part of the next frontier for workforce development policy, and is a critical factor in ensuring that skills matter in the workplace. Although workforce development policy in Singapore is still dominated by supply side interventions, there are efforts to explore how public actors can influence skills utilisation, and how skills development and use can be better linked. Key learnings from this experience include the following:

Skills utilisation is a complex concept that goes beyond examining the content of skills. It concerns the work environment in which the job is performed as well as the motivation of the individual who may wish to exercise the skills. As such, like the topic of high performance workplace practices that emphasises discretionary effort and mutual gains, skills utilisation is linked to management and work practices within organisations. Compared to boosting skills supply, these are areas that public policy may find it more difficult to intervene.
Skills utilisation should not be considered separately from skills acquisition and retention. For workforce development policy to be effective, it has to be able to make impact on all three.
To secure employer buy-in, the Singapore experience also shows that public provision needs to be constructed around a workable business case. When skills support – acquisition, retention and utilisation – becomes part of an overall sound business model, employer buy-in becomes more likely. And after the initial adoption, a skills-driven business model becomes the “normal” way of running the business.
An argument can be made that “smart” employers will have already considered these gains and organised their business practices accordingly. While this may true, under intense competition and other pressures, skills issues can easily become secondary to other immediate operating and bottom-line issues. The Singapore case studies show how policies and subsidies can mitigate the tendency of some employers to overlook skill matters. The key lesson here is that the impact of public subsidies/grants may not stem from the actual funding amount, but rather as serving as a device to build the willingness of employers to try something different.

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