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As a business owner, one of your key priorities is looking for ways to improve profits. Cutting labour costs, which may include wages, employee benefits, and other related costs, is one of the tools in your arsenal. After all, it is a significant expense – ranging between 18% and 32% of total business costs on average.
As such, the government’s mandate for multi-year salary increases for Singaporean and Permanent Resident workers across service sectors like cleaning, security, and food services under the Progressive Wage Model (PWM) may seem like an added cost pressure that might hit your bottom line and reduce competitiveness.
Instead, the PWM is meant to help companies make better use of and retain their workers. This is achieved by providing workers with a clear career path to enhance their skills and improve productivity for wage progression. Furthermore, as announced in Budget 2023, companies that give wage increases to their workers can enjoy co-funding support of up to 75% from the government under the Progressive Wage Credit Scheme.
Such firms can also be recognised through the Progressive Wage (PW) Mark accreditation, which can be applied for via the GoBusiness platform.
Why You Should Embrace The PW Mark
The PW Mark is an accreditation scheme that recognises businesses that pay their employees progressive wages so that consumers and corporate buyers can support them through their purchases. Employers that additionally support their workers’ well-being in the areas of workplace safety and health, provision of rest areas, and skills training to improve their employees’ work proficiency and productivity will receive the PW Mark Plus.
PW Mark can differentiate your business in these ways:
#1 Receive Recognition As A Progressive Employer
The PW Mark accreditation is one tangible way that you can show support for uplifting the wages of lower-wage workers. It also enables your company to gain better visibility and recognition for its efforts as a progressive employer. It will help you attract and retain talented workers, as they will feel more motivated when they have a clear pathway for progression and higher wages.
At the end of the day, happier and more motivated employees will stay longer and partner with companies in their efforts to raise not just productivity but overall service quality standards. For companies, this may translate to lower staff turnover, saving time and money on hiring and training new staff. Similarly, the PW Mark provides assurance to prospective employees by allowing them to easily identify which companies have put in place progressive wage and workplace practices.
#2 Boost Corporate Image And Gain Support From Clients
Over 2,300 companies have received the PW Mark accreditation since January 2023. Companies that obtain the PW Mark early are likely to gain a first-mover advantage over companies that have yet to come onboard.
For companies that wish to apply for the PW Mark, you can do so via the GoBusiness platform, a website that most companies might be familiar with as the go-to place to apply for business licences, find regulatory information and receive guidance on various business processes such as starting a business, applying for grants and employee upskilling.
#3 A Requirement To Participate In Government Contracts
Additionally, the PW Mark is a requirement for companies that hire workers in sectors or occupations covered by the Progressive Wage Model and are awarded government tenders with an estimated value above $90,000. These companies and their subcontractors will need to maintain the PW Mark accreditation throughout the contract period.
From 1 Mar 2024, the PW Mark requirement will similarly apply to companies that are awarded government quotations with an estimated value above $6,000 and up to $90,000. As such, companies that wish to take on government contracts cannot look past the PW Mark accreditation.
Using Technology As An Enabler To Raise Productivity Levels At An Industry Level
Even as we upskill our workers, businesses can think about using technology as an enabler to raise productivity.
For example, RÒA, a home-grown bakery, had to turn down at least 30% of orders due to production capacity. To get around this, RÒA purchased an automated batter dispenser, which was partially covered by the Productivity Solutions Grant (PSG). The new equipment allowed the company to produce over 1,000 cupcakes a week, up from 300 previously. It also helped to reduce their manpower by half, as only one person was needed to man the station compared to two previously.
Firms can leverage various government initiatives, such as the PSG, and receive co-funding support for pre-scoped IT solutions and equipment. You can view all the available PSG solutions on the GoBusiness portal. Alternatively, use the e-Adviser for Government Assistance on the portal to help you identify the relevant assistance schemes by answering a few questions about your business needs.
Supporting Skills Development To Improve Workforce Productivity
Another benefit of the PWM is that it encourages firms to focus on job redesign in tandem with business transformation to improve the productivity of their workforce, coupled with skill development. The PWM maps out a clear career pathway and skills training to enable career progression and corresponding wage growth for workers.
The Ministry of Manpower’s website details an extensive list of information on the specific wage progression pathways for each sector. For instance, workers covered under the PWM sectors can upgrade their knowledge and skills from basic WSQ certificates to WSQ Graduate Diploma programmes, enabling them to take on higher-responsibility roles.
For example, within the lift and escalator sector, the PWM provides for a five-level career progression that taps on the Singapore Workforce Skills Qualifications (WSQ). It enables the lift and escalator maintenance workers to progress from an Assistant Lift and Escalator (L&E) Specialist role to eventually rise to the position of Principal L&E Specialist, which comes with a higher salary.
If you’re looking for more information on relevant skills training for your industry, you can tap on the GoBusiness e-Adviser for Skills Training, which recommends training courses and initiatives for career upskilling that are personalised to your business needs.
At both the industry and worker levels, if firms can achieve equal or higher productivity growth than wage growth, they may not face higher operational costs or suffer poorer profitability. Instead, these companies would be nimbler and more competitive in searching for new opportunities even during challenging economic times compared to those that simply pass on higher costs to consumers.
Qualifying For Progressive Wage (PW) Mark And PW Mark Plus
To qualify for either the Progressive Wage (PW) Mark or the PW Mark Plus, your business must meet the following requirements:
- Hire at least one Singaporean or PR worker covered under the prevailing Sectoral (Cleaning, Security, Landscape, Lift and Escalator, Retail, Food services, Waste Management (from 1 Jul 2023) and Occupational (Administrators and Drivers) PWs.
- Pay the worker the relevant salary according to the PW requirements.
- Pay all Singaporean and PR workers at least the Local Qualifying Salary (LQS) of $1,400 for full-time workers or $9 per hour for part-time workers.
- For PW Mark Plus: Adopt the Tripartite Standard on Advancing Well-Being of Lower-Wage Workers. It requires companies to provide better worker welfare, such as training and career development, workplace safety and health, and amenities such as rest areas.
Applying For PW Mark On GoBusiness
Businesses can apply for either the PW Mark or PW Mark Plus on the GoBusiness Portal:
Check if your business is eligible under the PW requirements > Update your company’s Occupational and Employment dataset (OED) > Log in to the GoBusiness Dashboard as a Business User > Apply under the Accreditations page. For a more detailed walkthrough, you can visit the GoBusiness website or watch the video below.
The application process is free, and the approval process takes around five business days for the PW Mark and up to 1.5 months for the PW Mark Plus. Once awarded, the PW Mark is valid for one year and can be easily viewed on the GoBusiness Dashboard under ‘My Accreditations’. As long as your business continues to meet the accreditation criteria, renewal will be carried out automatically each year.
On top of registering for the PW Mark, businesses can also use GoBusiness to get guidance on starting a business, find and apply for licences and government assistance schemes, all in one place.
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