Singapore has made amazing overall progress in rapidly upgrading the capabilities of its population. Its students consistently score at the top of international rankings of science, math and reading. And over 90% of young people continue into post-secondary education and training: nearly two-thirds get a degree or diploma from a university or polytechnic; another 25% receive well-recognized technical qualifications.And the strategy seems to be working. Singapore is dealing with problems the US can only envy: fears of inflation (the economy grew at over 18% in the 2nd quarter of 2010) and of labor shortages (unemployment is hovering close to 2%).
One area to which Singapore is not normally looked for innovation is labor unions. Historically Singapore’s unions, like their Chinese counterparts, have been seen as more captive to, rather than independent of, employers and the state. Zee described why Singapore followed this path: “Early on, after our initial crisis when we separated from Malaysia, there was a battle between the pro-communist and the pragmatic sides of the union movement. The pragmatists won. The key was the recognition by all actors of Singapore’s extreme dependence on foreign corporations. This limited the potential bargaining power of a more traditional collective bargaining approach.”
Instead, unions focused on working with the ruling party to shape policies that would benefit workers, in particular the upgrading of jobs and provision of a strong social safety net to protect workers who were displaced. A clear indicator of the strength of this partnership was that the NTUC’s Secretary General is a member of the Cabinet.
Said Zee: “The first crisis for this partnership came in 1986, when Singapore was plunged into a deep recession by the government’s own miscalculation. It pushed salaries up 8 to 10% year in an effort to force employers to move up the value chain and remove low-wage jobs. This worked fine for a couple of years, but then fell apart when multinationals began to leave. What we learned from this is that we can’t dictate wage levels through the tripartite arrangements, but instead can only raise salaries by boosting the productivity of workers through enhanced skills. This is one major reason why skills are now a national priority for the government and labor movement.”
Initially, the unions worked with the government to put in place policies that would enhance workers’ skills. Most notable was the levy on employers that ensured all firms would spend a portion of payroll on employee training and development. In addition, the government introduced the Lifelong Learning Endowment Fund in 2001: this set aside resources that would produce annual earnings to cover up to 90% of course costs for individuals wishing to upgrade their skills, in particular, existing workers who had left the education system with limited or no recognized qualifications.
The unions recognized the benefits of these government initiatives, but also that relying on these alone would be insufficient to demonstrate to their members the relevance of the union in matters relating to skill issues. “We had to create our own internal capability to push skills initiatives in our union base. So we set up the Skills Development Division within the NTUC headquarters. This became the most important operating unit in NTUC, together with our industrial relations department.” In 2003-4, the NTUC went one step further: it spun off its computer-based training operations and converted them into a new social enterprise, LearningHub. Zee was hired from Bain & Co in 2003 to lead this unit.
“Our goal in LearningHub is to do well financially by doing good for workers,” said Zee. “My objective was to use new technologies and create an organization that could deliver standardized, low-cost, high-quality training to large numbers of workers.” LearningHub started with IT and basic skills training, and has now expanded to include health and safety, basic manufacturing, soft skills training, and some craft and technical training, although not formal apprenticeships. They now have a menu of over 550 course offerings and have served over 700,000 workers and managers since 2004.
The balance of customers changes dramatically depending on the health of the economy. “Typically, 60% of our business was coming from employers, paying for their workers to be trained,” said Zee. “Then when the global financial crisis hit, we shifted rapidly and 80-90% of our funding was coming from government to upgrade the skills of existing workers who might otherwise have been made redundant.” This type of policy helped ensure that unemployment remained very low even during the depths of the crisis.
For the future, LearningHub is looking to move upmarket into higher-level skills, as the economy of Singapore shifts rapidly toward more knowledge work. And it is expanding across Asia, setting up training operations in India and China. “We chose to focus on retail in India, because IT training was already saturated,” observed Zee. “We saw an unfilled niche as India shifts from small shops to larger retail chains.”
This strategy was a “hard sell” at first, according to Zee, as the union’s training arm was upskilling workers who might compete with its Singapore members. But LearningHub was already the largest trainer of migrant workers in Singapore, and NTUC had an official policy to look after all workers in Singapore, not just Singaporeans. “It was going to happen anyway. If we do not train the Indians and Chinese, others will: it is just a matter of time. So it seemed better for us to be an early mover, and build up a strong brand with this workforce. We see it as a potential win-win, expanding our resources, and helping to upgrade the skills of workers and ensuring they won’t be exploited if they immigrate to Singapore.”
IT Training is a great way to help your business, but it is becoming a more and more crowded market.
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