How can Singapore make the most of its expanding service sector?

As economies develop they generate proportionally more jobs in services than in manufacturing. In the US , for example fewer of 20% of all jobs are in non-services.

The term ‘service sector’ by definition is nebulous – at least in theory it can encompass anything from providing accountancy services to working in a fast-food restaurant. Broadly speaking ,there are two categories of service sector employment.

The first is mainly confined to the professions such as banking. Here the number of well paid jobs exceed or is in proportion to the number of low paid jobs.

The second category is largely characterized by low paid jobs that offer little in the way of career structures. These include sectors such as catering and hospitality. Globally, a noticeable feature of service sector employment is that it is highly polarized . It produces many highly skilled, well paid jobs and low paid jobs that require little training but fewer jobs in between.

As Singapore continues to make the transition from a manufacturing-based to a service-based economy we need to think carefully how we can provide career structures and opportunities for all service sector workers.

We need to facilitate a win-win solution – the economy benefits and at the same time, the employees benefit. This means transforming ‘bad’ jobs into good jobs. Also we need to dispel three common misconceptions.

Firstly that many lower level service sector jobs are mainly filled by young people who are either studying, gap filling or deferring a proper career.

Secondly that service sector jobs are a stepping stone to something better. Thirdly that technology and economic growth will displace many poorly paid service sector jobs. Research conducted in the US indicated the ‘bad’ job scenario is here to stay and of the ten occupations expected to generate the most jobs, five are classified as poverty wage and two are classified as low wage.

The Workforce Development Agency has to be commended for helping those who lack education and skills to move up the career ladder. So far the industries that it has focused upon include, private security companies, cleaning, retailing, health and horticulture.

The emphasis has been on job redesign and enhancing job value by job expansion. This facilitates a win-win scenario, the organization derives greater value from its workforce and the employees benefit as skilled workers command higher earnings. NTUC’s job recreation programme has raised the wage bracket for security guards from $800-$900 to $1,300 -&1,600.

Other measures could include building more visible internal career structures within specific service sector industries by developing career ladders that facilitate progression. This includes investing in training and reducing ‘information asymmetries’ – which means making information relating to job opportunities available internally.

Also we need to capitalize on the inherent features of the service sector that distinguish it from manufacturing. According to economist Hoshang Jhaveri; workers in the service sector are exposed to the customer interface which motivates them to perform optimally.

In other words they perceive themselves as being part of a human process as opposed to being a cog in an anonymous machine. According to the McKinsley Global Institute, five of the top seven industries that have led productivity growth in the last decade are service sector industries.

The government has pledged $360 million to provide training for 74,000 Singaporeans so that they can take up jobs in the IRs. Yet, seven out of ten jobs that go unfilled are in the service sector.

At the same time the distinction between the service sector and other forms of economic activity is becoming increasingly blurred. The term ‘service sector’ is becoming extended other forms of economic activity and a new definition is needed that more accurately reflects its new meaning.

In the meantime there are many who feel that they are ‘stuck in jobs’ and are ready to take on more responsibility. A society should not make the mistake of assuming that they are incapable or unwilling to move up. The challenge has to be to give them that opportunity by turning ‘bad jobs’ into ‘good jobs’.

Paul FitzPatrick is author of three books, a journalist and runs creative thinking programmes for companies.

Email Paul Fitzpatrick at [email protected]