01 WHAT IS PROGRESSIVE WAGE MODEL? WHAT IS PROGRESSIVE WAGE MODEL? 01 HOW DO THE FOUR LADDERS WORK TOGETHER? WHAT IS IN IT FOR COMPANIES? THREE KEY MYTHS RESOURCES NOTES 09 08 Businesses need to improve the productivity of their operations through innovation, as well as attract, retain and make better use of every worker. To grow wages in a sustainable way, employees need to upgrade skills, improve productivity and take on higher value jobs. 03 04 HOW CAN COMPANIES GET STARTED? 02 As Singapore faces a new reality of slower employment growth and restructures itself towards a high productivity economy, new mindsets must be undertaken to overcome the impending challenges. 06 The Progressive Wage Model (PWM) is a four-in-one model of skills upgrading, productivity improvement, career advancement and wage progression. It enables companies to make better use of manpower and pay higher wages, commensurate with larger job scopes and higher productivity levels. The PWM is for workers at all levels, for all sizes of companies, across all industries and sectors. It has been implemented for Professionals, Managers and Executives (PMEs) in sectors including hospitality, healthcare and petroleum, as well as low-wage sectors such as cleaning and security. SKILLS UPGRADING PRODUCTIVITY IMPROVEMENT CAREER ADVANCEMENT CAREER PATH SALARY PROGRESSION PROGRESSIVE WAGE MODEL CONTENTS 03 HOW DO THE FOUR LADDERS WORK TOGETHER? The PWM illustrates a clear progression of wages with skills upgrading and career progression; allowing pay increase to move in tandem with productivity gains. All four ladders are integral and equally important components of the PWM, and must go hand in hand to ensure sustainable wage increase. If wages go up without an eventual rise in productivity, there will be an erosion of business competitiveness and subsequent loss of jobs as the business downsizes itself and eventually ceases to exist. At the same time in the domestic market, consumer prices will rise and will hurt everyone. It is not a sustainable or acceptable solution either for businesses to maintain competitiveness and profits by keeping wages down. WHAT IS IN IT FOR COMPANIES? FOUR LADDERS Future Ready Company Innovation and technology will be key drivers for future ready companies. Companies need to reinvent themselves with vision and capabilities to deal with the future challenges. PWM is a continuous process that requires companies to constantly seek process improvements, job redesign and innovation to capture new opportunities. Future Ready Workers Future ready companies have to be supported by future ready talent and capabilities. With a structured framework for all workers to reskill and upskill, the workforce will be better trained, agile and adaptable to the future requirements. CAREER Better Attraction and Retention of Workers A clear career progression pathway will provide workers with more clarity on career advancement opportunities, helping to attract and retain talents. More Sustainable Wage Increase Wage increases will be linked to productivity improvements to ensure the sustainability and competitiveness of the company over the long term. PROGRESSIVE WAGE MODEL PROGRESSIVE WAGE MODEL 02 05 THREE KEY MYTHS 2 MYTH PWM requires licensing for implementation. FACT PWM does not require licensing to be implemented. 1 However, in sectors plagued by low wages and low skills, PWM needs to be mandated through a licensing framework to protect the vulnerable workers. MYTH PWM is Minimum Wage. So far, only the cleaning industry has mandated PWM through a licensing framework. Companies across different sectors (e.g. hospitality, services and healthcare) which have seen the advantages of PWM have started their own journey on PWM. FACT PWM is NOT equal to Minimum Wage. By definition, a minimum wage is the lowest hourly, daily or monthly wage point that employers must legally pay to workers. PWM, on the other hand, stipulates a progressive wage structure that stretches beyond a single legislated wage point. In countries with a minimum wage, some employers refuse to pay beyond the legislated minimum wage. This stagnation hurts the workers as well as the company, as workers will not be motivated at work and companies are less driven to be innovative. 3 MYTH PWM assures promotion once the worker attains the skill set specified for the position. FACT Promotion to a higher grade is based on merit. Acquiring the skill set enables the workers to better position themselves for career advancement. PWM requires clarity in skill competencies for workers to do the job well, and transparency on promotion criteria to meet the aspirations of the workers. PROGRESSIVE WAGE MODEL PROGRESSIVE WAGE MODEL 04 07 HOW CAN COMPANIES GET STARTED? STEP 3 STEP 2 JOBS STEP 1 Every company and every sector is unique with their own set of challenges. Review your business operations, the areas that need enhancement and are of priority. Identify the gaps Productivity • Can there be further multi-skilling, multitasking or job enhancements? • Can the jobs be made easier, smarter and safer through adoption of technology? • Is there a formal productivity management structure established within your organisation to ensure productivity improvements are continuously implemented? • If your company is unionised, work together with your union to brainstorm ideas to manage these gaps. Set up a workgroup, develop an action plan by prioritising which ladder to work on first and explore available resources, e.g. Inclusive Wages • Was a salary review done in the last three years in your organisation? • Do you have a competitive wage structure in place? Skills • Are there relevant training available that enable workers to upskill, e.g. Workforce Skills Qualification (WSQ) courses? REVIEW THIS FRAMEWORK CONTINUOUSLY Growth Programme (IGP) funding from NTUC’s Employment and Employability Institute (e2i) to kick start the PWM journey. • If your company is non-unionised, you can approach NTUC’s e2i for a consultation. • Are your workers aware of the required skill set to move up the career path? Career • Are clear career pathways in place in your organisation? • Do your workers face obstacles in moving up their career paths? E.g. pre-requisite of academic qualifications. PROGRESSIVE WAGE MODEL PROGRESSIVE WAGE MODEL 06 09 RESOURCES Scan the QR code for more resources on the Progressive Wage Model, e.g. case studies and videos. For general enquiries If you need to speak with someone on the Progressive Wage Model, please contact NTUC Industrial Relations Department at [email protected] or NTUC’s Employment and Employability Institute (e2i) at [email protected] NOTES PROGRESSIVE WAGE MODEL PROGRESSIVE WAGE MODEL 08
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