Organizations in Singapore have been mandated to going forth, report to the Ministry of Manpower (MOM), any cost-cutting measure that is likely to impact employee salaries, effective March 12th. This rule is applicable to employers that have a manpower of 10 workers or more.

Announcing the new rule, Manpower Minister Josephine Teo shared, “This is to encourage a sense of social responsibility and prevent downstream salary disputes.”

She further added that the notifications will also allow MOM to monitor the scope and scale of such measures, and whether more government interventions are needed.

In light of the new mandate, organizations who fail to inform MOM of any such cost-saving initiatives will undergo an investigation, and be subject to necessary action. The Ministry has also offered suggestions to assess and implement strategies to manage any spare manpower. These include introducing flexible work schedules, that bring down working hours, with the purpose to create a “time bank” that can be utilized in the future, in addition to cross-functional utilization of manpower.  Speaking of the “Time Bank”, Teo said, “Simply put, they are paid now for work later’, adding that at some point in future, when overtime is required, the employer can then withdraw the extra hours based on an agreed formula.

With several organizations in the likes of SingTel, Temasek and CapitaLand making the difficult decision to freeze wages, promotions and cut down on salaries, this new Government intervention comes as a much needed guide to monitor and track such changes.

Given the current global scenario, companies across the globe are brainstorming measures to keep the business running, keep the salaries going, and retain as many jobs as possible. Cost-cutting is the need of the hour, in combination with effective people and operational strategies, and agility is key here.