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Speech by Mr Tharman Shanmugaratnam, Deputy Prime Minister and Minister for Finance, at the SkillsFuture Employers' Pledge Ceremony

20 May 2015

Dr Robert Yap, President, Singapore National Employers Federation (SNEF),

Mr Goh Eng Ghee, Acting Chief Executive, Singapore Workforce Development Agency (WDA),

Mr Patrick Tay, Assistant Secretary-General, National Trades Union Congress,

And everyone here this morning,

1. This is a very good initiative. Thank you, SNEF, and the 50 companies, who are taking the lead amongst employers in coming on board SkillsFuture – employers who are taking ownership of developing their people, taking ownership for the sake of their people and for the companies themselves.

2. I think it is a good initiative for all the reasons that Robert gave. The fact that we are faced with permanent tightness in the labour market is the defensive reason.

3. The underlying motivation for SkillsFuture is that there is still much potential in developing Singaporeans to achieve their most in life. There is still some way to go.

4. We do it very well in education, during the first 18 or 22 years of a person’s life. Singapore is doing better than most countries. But that is just the start of the game. Life is long, life has surprises, and the passion for learning among people develops at different stages of life. That passion to discover yourself, to learn something new, to push your own boundaries, happens at different stages of life. And we have to work together to help everyone develop their potential in life.

5. Employers are really key. All over the world, that’s the key determinant whether we succeed in life-long learning. We can have government resources, and unions actively promoting learning. But employers have to take ownership of learning. And how we can organise and work with employers, industry by industry, will determine how far we succeed in SkillsFuture. We are going to work closely together on this on a tripartite basis. I am sure we can succeed, in this Singaporean way.

6. There are good examples already of SMEs that are developing progressive HR practices, and that basically means developing their people.

7. One example is Linair Technologies. It is an SME that provides environmental solutions to companies in a range of sectors. Their business is about engineering. And to developing engineering excellence means developing your people, because they themselves are the mark of a company’s excellence. And the solutions that Linair offers to its clients are solutions developed by their people.

8. So they put a lot of effort into this. They have a career development plan that puts their employees through both in-house and external training. They put them through cross-functional training, in different aspects of the business. They offer internships to young people, the students in our universities and polytechnics. And they are now using the P-Max programme to obtain new PME hires.

9. So they are taking advantage of government schemes but that is just part of it. What is far more important is the internal mindset of developing people, finding every way to help them onto the path towards achieving excellence, help them to unlock their potential.

10. We are not starting from scratch in [having] employers take ownership of training. There are companies like Linair, including larger companies, that have been at this for some time. Companies are also quite involved in our polytechnics and ITEs, sitting on their advisory panels; they are involved with us in developing our WSQ, through the industry skills councils. And there are some larger companies that are already in the game of providing training, not just for their own employees, but for others within the industry. Companies like SIA Engineering, Ascott, Merck Millipore, the Singapore Media Academy.

11. We have to take this further. SkillsFuture will be a long-term journey. Our biggest task is to get our SMEs on board, so that we help our SMEs and help the people working in our SMEs, who are the majority of working Singaporeans. That's our biggest challenge. It's a challenge all over the world, and we have to find effective approaches and mechanisms to achieve this – quite apart from the incentives, quite apart from the strong tripartite collaboration that we have the ability to develop at the sectoral level. We have to explore new approaches, and study what has worked in the rest of world.

12. During a recent study trip that a SkillsFuture delegation made to Switzerland and Sweden, one interesting mechanism that we found, and which we intend to study further, concerns the use of intermediaries. Switzerland and Sweden already have a strong culture of employer ownership of people development. It goes back a long way. They take ownership of people development within their own companies, as well as collaboratively on an industry basis.

13. But even then, even in these countries where you already have a very strong culture of employer ownership of people development, they have found it necessary to create intermediaries that work with employers to get this done. For instance, they have intermediaries that network between employers in an industry, to coordinate apprenticeships and deliver training. The design of the training, is decided based on significant inputs from the employers, and constant feedback along the way. So the employers are involved in designing the training, but they find it useful to work with intermediaries that connect them with apprentices and potential hires, and with Government agencies. The SMEs especially find it useful.

14. For the individual, the intermediary provides a network of potential apprenticeships, and ensures that the apprenticeships are of high quality – in other words, the apprenticeship schemes are structured, and delivering valuable learning, tied up together with the learning that's taking place off-site.

15. The business model of the intermediaries in these countries is to maximise the number of companies who engage in training people, and achieve the right match with people who might want to work in an industry. The intermediaries bid for public funding based on their ability to bring employers on board, and their ability to bring people on board to join the employers. It's an interesting business model, and something which we can study further as we spread SkillsFuture across the broad base of employers and across the workforce. That’s just one example – the use of intermediaries – of what we can learn from others.

16. The journey is going to be a long one, and we're off to a good start. We're putting in place strong incentives. But what’s critical is going to be the culture. And the 50 companies that are taking the lead today are setting the pace, and we have to find every way in which we can spread the culture.

17. It's basically something that starts from the top, but has to be up and down the organisation. A culture where we help each other to develop ourselves and make the most of life.

18. Thank you very much.