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New rules aim to boost construction productivity

SINGAPORE — A string of measures — comprising a mix of tightened requirements and help for firms — targeted at growing the pool of skilled and experienced workers and spreading them out in the construction sector was announced yesterday, as part of the Government’s latest efforts to pull up the sector’s lagging productivity levels.

New rules aim to boost construction productivity

Construction workers working at a construction site. TODAY file photo

SINGAPORE — A string of measures — comprising a mix of tightened requirements and help for firms — targeted at growing the pool of skilled and experienced workers and spreading them out in the construction sector was announced yesterday, as part of the Government’s latest efforts to pull up the sector’s lagging productivity levels.

Official data showed productivity in the construction sector grew by 1.2 per cent annually between 2010 and last year, far behind the Government’s target of growing productivity by 2 to 3 per cent annually by 2020.

Announcing the new upgrading requirement during the Business Excellence and Productivity award ceremony yesterday, Deputy Prime Minister Tharman Shanmugaratnam noted that the Government’s strategy to manage the growth of foreign manpower in the construction sector as part of its restructuring efforts has seen results.

The focus for the next stage is on raising the quality of the construction workforce, including bringing in more higher-skilled and experienced workers, he said.

To that end, construction firms must upgrade 5 per cent of their work-permit holders to the higher-skilled R1 tier by the end of next year and a further 5 per cent by the end of 2016 or forgo their chances of hiring new work-permit holders for up to one year. Companies that already have 15 per cent of R1 workers will be exempted from the upgrading requirements.

This phased upgrading requirement is in line with the new rule — announced by Mr Tharman in his Budget speech earlier this year — that will kick in on Jan 1, 2017. The rule requires all construction firms to have at least 10 per cent of R1 workers.

About three in five construction firms here meet the 10 per cent R1 requirement. For those that do not, the majority — around four in five — need only to upgrade one or two of their work-permit holders over the next two years to meet the requirement.

There are more than 10,000 construction firms in Singapore, employing about 300,000 workers. About 15 per cent of these workers are qualified as R1 workers, but they are unevenly distributed across firms. The Government hopes to raise the proportion of R1 workers to 30 per cent by 2020, a Building and Construction Authority spokesperson said.

To help firms bring in more higher-skilled workers, the Government will allow greater flexibility for firms to upgrade and retain their workers.

From Sept 1 next year, construction workers who earn a salary of S$1,600 or more and who pass a skills test can enter Singapore directly as an R1 worker. Currently, workers need four to six years of experience working here to qualify for the R1 status.

As for keeping skilled and experienced workers from leaving for other countries, the Government will also allow firms to hire construction work-permit holders who are at the end of their work-permit period, without these workers having to first leave Singapore. This will take effect from June 1 next year.

“This will enable firms to tap the experience these workers have built while on the job in Singapore, while reducing the firms’ search and hiring costs for skilled workers,” said Mr Tharman.

Responding to the new requirement, Singapore Contractors Association president Ho Nyok Yong said they were largely reasonable and the flexibility in hiring and upgrading workers would result in savings in terms of worker levies for firms.

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