Sunday, February 19, 2012
Construction as a Singapore Labour Market Safety Valve: First Steps
In the United States, the construction industry has traditionally served as a "safety valve" for the labour market in the sense that those with low educational attainments might (i) find gainful employment in that sector relatively easily, (ii) gradually build up a useful skill set as construction tasks vary greatly in complexity and skill requirements, thus (iii) giving them a meaningful way of moving up in the world through hard work and an active mind.
In Singapore we do not really have such a labour market "safety valve". The closest we might come to one is in the food and beverage industry. It does not make the cut as a "safety valve" as at the entry level, one needs skills and some capital. (Note: Skills are also needed for work in a restaurant kitchen in food preparation.)
I have been thinking of how we might simultaneously reduce our reliance on foreign labour and raise the productivity of the local construction by creating a core non-transient workforce that will be able to retain and grow their skills.
Amusingly, this thought first came to me some years ago after the 2nd or 3rd time I watched CJ7 during the Chinese New Year period at an uncle's home. In the movie, the protagonist's father was a construction worker (in Hong Kong), and there, it was clear that construction workers took pride in their work. The real Hong Kong construction industry is staffed by locals, and their achievements are recorded in the Hong Kong skyline. Their productivity, as an industry, is much higher than ours. The same is true of the construction sectors of the USA, Germany and many other countries. It is clear that retention of skills plays a major part, as do incentives to improve.
In Singapore, however, construction work is regarded as "undesirable". This is due, in large part, to the way current construction workers are treated and to the level of skills necessary to do the work. Restoring pride to the construction industry is alluded to in the Finance Minister's Budget Speech for FY 2012. (See paragraph C23.) While no concrete plan was mentioned or even the allusion to one was made, I do not take para. C23 to be a motherhood statement promising no substantive impact. I have a vague sense that some work is being done in this direction.
Now, it will take time to erase the perception of "undesirability". But the first step to doing that is to recognize that, at least today, it is accurate. Construction work in Singapore is a low-wage dead-end job. This has to change. The first step to this would be to uncover the full continuum of skills that construction work all around the world utilize. Our construction industry, due to its reliance on transient workers, is unable to access the full range of skills the mastery thereof can make a worker highly productive, a stake contrast with our "unskilled" foreign construction workers. (The same argument could be made for a transformation of our armed forces, as "transient workers" can only learn so much.)
I think the first step might be taken by the Building and Construction Authority (BCA). By framing the range of technical skills in construction in a "Competency Framework", and relating that framework to the various roles (some managerial) in construction, it would provide a skill-oriented (productivity oriented) guiding framework for career development in construction. Construction companies which are ready to move to higher levels of productivity could take this framework and run with it.
Naturally, it would be unlikely that we would be able to (even eventually) move to a local-only construction industry. Yet the core should be local in order to retain skills. Transient foreign workers would be used as a capacity management tool, with their numbers increasing when demand is high and falling when demand is low. (Thus, shielding the local workforce from cyclical unemployment.)
The crux of the approach recommended is the building of "depth" with respect to career development where none existed before. I would guess that a similar approach might be taken for other industries.