Service sector

Labor shortage in the service sector: Is it finally time to change the way companies hire in the service sectors related to lifestyle, environment, property management and facilities?

The oft-repeated complaint from the service industry has become a resounding refrain, with more companies echoing the same complaint of not having enough manpower. For the industry that relies heavily on labor to provide the human touch and service, it’s not a simple problem that automation and digitization can solve.

Singapore’s economic activity has begun to flourish as borders reopen and safe management measures cease. However, many companies in the service sector have not been able to take full advantage of the recovery because there is simply not enough manpower to ramp up operations. For the hard-hit service sector, which saw many companies downsize during the early stages of the pandemic, rehiring their qualified and trained staff has not been an easy task.

In view of these challenges, the Singapore Business Federation (SBF) has come up with a labor policy document detailing how key stakeholders, including businesses, trade associations and chambers (TACs) , government agencies, unions and post-secondary education institutions (PSEIs), can work in partnership to address them.

Read also : Singapore employers are hiring. But where exactly are these job opportunities?

Labor shortage is an ongoing problem for the service sector

Any company that operates in the service industry knows that labor shortages are not a new problem.

However, this current period is particularly exacerbated by the restricted flow of foreign labor due to border restrictions imposed by the pandemic, the first reductions in the workforce due to the slowdown in business activity and the difficulty of hiring due to changing worker expectations.

Redeploying the workforce to the lifestyle services sector is not enough

Of the 9 action items proposed by the SBF, one of the three key actions that the SBF would advocate for is the redeployment of the workforce from pandemic-related operations to lifestyle services. Lifestyle services include retail, restaurant, hotel and nightlife industries which form nearly 42,000 establishments in Singapore which contribute 3.5% of GDP in 2019 and employ nearly 11% of the total working population.

This is an obvious decision to make as much of the workforce activated for pandemic-related operations, such as ambassadors and stand-off swabs, have been diverted from style services. of life in the first place.

However, this may not be enough as not all workers who have left the service sectors are willing to return. For foreign workers who have returned to their home country, returning to Singapore may not be a feasible option, due to employment permits and lifestyle disruptions. Similarly, local workers may not wish to return to work in lifestyle sectors after experiencing a different type of work environment.

Read also : 4 things SMEs should know about Singapore’s improving labor market in Q1 2022

Increase cross-industry collaboration to reduce labor requirements

SBF also advocates that TACs facilitate cross-sector collaboration to achieve greater operational efficiency and better resource allocation.

An unexpected outcome for businesses turning to e-commerce is the need for additional manpower to handle logistics and order fulfillment. However, it is not an efficient use of labor (or company resources) for each retailer to have its own warehousing and logistics team. Instead, retailers can rely on e-commerce facilitators and logistics providers to execute supply chain activities. This would provide economies of scale, as a team of warehousing and logistics workers can serve a group of companies most efficiently, instead of each company recruiting its own in-house teams.

Read also : Restaurant closes due to rising oil and electricity prices: 4 business groups (and one worker group) hit by rising energy prices

Propose to review the general business activity classifications for the service sector for the foreign labor quota

Finally, the third stage of action recommended by the SBF is the revision of the general classification of the services sector.

Currently, companies in the service sector can hire up to 35% of their total workforce to hold a work permit. This applies to all service sectors, including the finance and insurance sector, the food and beverage sector, the retail sector and the transport and logistics sector.

However, the need for more (foreign) labor to fill the shortage of premises is particularly pronounced in the sectors of lifestyle services, environment and property and facilities management. However, they are subject to the same foreign labor quota for the service sector as the finance and insurance sector which does not face the same labor challenges.

To address this issue, the SBF advocates that the tripartite partners work together on a more nuanced classification of business activity, particularly for services, so that more differentiated policy interventions can be applied to address labor challenges. work specific to the sub-sectors.

Read also : Foreign worker quota in Singapore: what it is and how to calculate it for your company

Worker expectations have changed during the pandemic

One of the employment trends that has emerged during the pandemic is the big quit. Although commonly referenced for white-collar workers who quit due to burnout, job dissatisfaction and frustrations related to working from home, the fact remains that the pandemic has had an impact considerable influence on each worker’s relationship with his work.

As essential workers have continued their work activities during the pandemic, the availability of work-from-home options and the push towards flexible work arrangements have shed light on the dichotomy between different types of work.

The nature of work in the lifestyle services industry often involves shift or weekend schedules, physical exertion for long periods of time, and high customer interactions and expectations. Considered side-by-side with other competing jobs that don’t require irregular hours, physical labor and customer interaction, service sector employers are struggling to sell.

Read also : Are Singapore employees part of the great resignation?

The realization of these proposed measures of action will very much depend on the cooperation and motivation of the various stakeholders, from the companies themselves to trade unions, professional associations and chambers (TACs) and government agencies. In the meantime, companies can take inspiration from the proposed action steps to find their own individual solution to their workforce challenge.

Join the DollarsAndSense business community

For more content that helps entrepreneurs, freelancers, and self-employed people learn how to build better businesses, join the DollarsAndSense business community on Facebook.