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Daniel Thong: “You know an industry is broken when the government has to step in to tell the industry to pay their workers at least S$1000 a month.”

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6 years ago

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An industry is considered “broken” when the government needs to intervene in order to get employers to pay their workers “at least S$1000 a month”, according to co-founder of co-founder of cleaning start-up Nimbus Daniel Thong, and “cleaning is broken in this industry”.

Referring to what Temasek Holdings chairman and former labour chief Lim Boon Heng said earlier in the same roundtable discussion on wages in the age of disruption by The Straits Times on Friday (30 Nov), Mr Thong said that the problem stems from vicious, intense competition among service companies in terms of obtaining cheap prices for labour, which, he said, “undercuts their service standards and the workers’ wages”.

“Service providers are currently paying our local workers very poorly, and you know an industry is broken when the government has to step in to tell the industry to pay their workers at least S$1000 a month.

“S$1000 a month is not what I consider to be a good enough wage for our workers, and so, I decided – as an employer – to step in to try and change the way things are,” said Mr Thong.

He added: “Now, the cynics would say that many of these jobs are jobs that Singaporeans do not want to do in the first place, [and] that’s why we need cheap foreign workers. But is it true that Singaporeans are fussy, and not trying to take up important roles in society? Or is it the case that these jobs are just terrible jobs in the first place?”

Picking up a piece of paper that says “Full-time Store Help Wanted. Poverty-level wages. Chaos [sic] Scheduling. No Training. No Career Path. Call +6533333333”, Mr Thong demonstrated: “This is a typical job ad of a low-skilled … a job ad that a low-skilled worker would see.

“It comes with poverty-level salary, no control over your schedule so you do not have time to even spend with your family, it doesn’t come with any career progression or any training – and Singaporeans are expected to demonstrate loyalty in these industries … So things have got to change.”

To mitigate certain issues faced by low-wage workers as illustrated by his demonstration of the advertisement sample earlier, Mr Thong revealed that Nimbus “pay 20 per cent above what the Progressive Wage Model already recommends” and “invest a lot in their training – hard and soft skills – and we give them a career path where people who do these jobs feel like they want to do this in the long haul.”

“So this helps our business as well, because it enhances our retention rate and it keeps our client satisfaction very high. That’s on the supply side.

“We’re also working towards a model … where we want where we want to change our model to one where there is a worker collective, where workers actually know the company that they work for—many cleaners do not actually know the company they work for—and they actually feel a sense of ownership and belonging to a community,” said Mr Thong, who highlighted that his startup sees workers as “assets and not liabilities”.

Mobile applications “specifically for the elderly” to enable them to have flexible working hours

Nimbus also, according to Mr Thong, invests heavily in technology for the benefit of the cleaners, particularly aged cleaners.

“We build a lot of mobile applications specifically for the elderly that give them the chance to have flexible working hours, performance-based incentives, which is — what Kurt mentioned — to get rid of the flat “basic wage” conversation that we currently have and that workers currently suffer … and we do a lot by getting accurate timesheets from accurate timestamps.

“We’re able to pay them more frequently, which solves a lot of their financial situations, because low-income individuals tend to have very tight cash constraints,” he said.

“On the demand side as well, we are changing that conversation, because we are able to combine more services to value-add to our customers. So the conversation is no longer just around the cost of cleaning, but about the entire value for money by having a convenient tech-enabled facilities vendor. We are changing our cleaners to become our brand ambassadors, and it justifies a higher living wage.

“That is the experiment that we’re trying to do, but no man is an island, and we need to work very closely with the government, with policymakers, as well as responsible service buyers – I think it’s not mentioned so far – to really push this industry forward. So I hope we can have a good discussion about wages, and hopefully, let’s collectively make services great again in Singapore.”

The system “doesn’t encourage contractors” such as Mr Thong due to price-based system: Prof Koh

Ambassador-at-Large at the Ministry of Foreign Affairs and professor of law at the National University of Singapore Professor Tommy Koh pointed out that the government’s contracting system at the moment “doesn’t encourage contractors” such as Mr Thong.

“If you look at the way we [the government] award contracts, it’s by price … It’s a spiral to the bottom, you know?” he lamented and added, “We, the government, should set an example … why are we not setting an example?”

Prof Koh asked Mr Thong how he is able to do what he has been doing for the benefit of his employees, and yet secure contracts, given that contracts, particularly government contracts, are often awarded to service providers with the lowest rates, Mr Thong noted that Nimbus “only tender for small office spaces’ contracts” as currently he is the sole negotiator “with every single service buyer”.

“There’s a bit of a tug-of-war there; that’s the answer to your first point, but … we are definitely not able to be the cheapest in the market, because we pay our [cleaners] 20 per cent above and beyond what the PWM prescribes. So the argument centres around “How do you raise the productivity of the workers?”

“I think a lot of conversations about productivity of cleaners right now is centred around robotics, like, “Can you clean the toilet faster?” Or, “Can you use more machines?”

Salary increase and remuneration ought to be based on performance to increase worker productivity: Thong

Consequently, he revealed that his startup is currently building “a lot of software” for its workers at the moment. The company will also put in effort in teaching older cleaners — “the uncles and the aunties” — how to use such software “to do things like fault reporting, to do things like checking in and checking out … so that there is a performance review, a feedback loop from the clients, so that we can pay them [accordingly]”.

“This helps us to identify better performers and to promote them accordingly in the system,” he said.

While Nimbus pays “a high enough basic salary” at S$1300 per month, Mr Thong assured that high-performing cleaners could “get up to S$1600 per month.”

On minimum wage: Consumers “set the ceiling”; service buyers must be made to “see the value in having a professional service done to them”

Noting market forces, Mr Thong said: “There is a question about the effect on prices though, because what we are touching on is local services. This is not manufacturing where we are in a globalised world and we are competing in an open economy where prices will always go down. We are talking about local services. So an increase in a dollar would definitely increase the cost, the general price levels of the services that people consume.

He highlighted the role of the consumer in contributing to better wages for low-wage workers: “So it is a question of how much the consumer willing to bear. And this is a question that we must take seriously, because politicians can say that “we should raise the minimum wage”, voters can say that, you know, “the minimum wage should be S$15, S$100” …

“At the end of the day, it’s the customer that sets the ceiling. We have to educate responsible service buyers to see that value in having a professional service done to them.”

“I just think that businesses, especially traditional businesses, in the service line have developed quite a bad reputation of late, and it sounds like capitalism and businesses are no longer a force for good, but I still believe that the only way forward is for businesses to innovate, to invest in technology, and to really empower people at the ground.

“So I think that we need to work together closely with responsible service buyers together with the government to really push this agenda forward for this to work, and I think that ultimately, the right thing in business might just be doing the right thing.

“We really need to work closely with our clients to make sure that they understand the point and importance of a clean and well-maintained workspace, how it’s actually linked to their productivity in the office environment … so that we can at least achieve a better outcome for cleaners and service workers in the blue-collar space.”

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Income Insurance respects government’s decision to halt Allianz deal, reviews next steps

Income Insurance Limited has acknowledged the Singapore government’s concerns and decision to halt its proposed partnership with Allianz Europe B.V. The company expressed respect for the government’s direction and emphasised its commitment to reviewing next steps while considering upcoming amendments to the Insurance Act.

Published

3 days ago

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15 October 2024

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Income Insurance Limited has responded to the Singapore government’s decision to halt its proposed transaction with Allianz Europe B.V., a deal that would have seen Allianz acquire a 51% stake in the insurer for S$2.2 billion (approximately US$1.6 billion).

On 14 October 2024, the company stated it “respects the Government’s direction” and appreciates the recognition of its strategic efforts, noting that it will work closely with stakeholders to evaluate its next steps in light of forthcoming changes to the Insurance Act.

In its statement, Income Insurance said, “Income Insurance notes and respects the Government’s direction. Income Insurance appreciates the Government’s understanding of the strategic purpose behind Income Insurance’s corporatisation exercise in 2022 and acknowledgement that the partnership with Allianz was to strengthen Income Insurance’s position for the long run.”

The company acknowledged the government’s concerns about the structure of the transaction and the need for legislative amendments to provide a clear statutory basis for reviewing similar applications in the future.

The company further recognised the conditional nature of Allianz’s voluntary cash offer, noting that it is “pre-conditional and subject to regulatory approval.”

Following the latest developments, Income Insurance committed to reviewing the proposed amendments to the Insurance Act and stated, “Income Insurance will review and take into consideration the forthcoming amendments to the Insurance Act and work closely with relevant stakeholders to study and decide on the next course of action.”

Government’s Concerns

The government’s decision to block the deal was relayed by Edwin Tong, Singapore’s Minister for Culture, Community, and Youth, who cited concerns over how the transaction might affect Income Insurance’s ability to fulfil its social mission.

While the government acknowledged the strategic importance of Income’s corporatisation in 2022, it expressed concerns about the proposed capital extraction that would follow Allianz’s acquisition.

This capital reduction could significantly reduce Income Insurance’s capacity to continue providing affordable insurance to low-income Singaporeans.

Mr Tong highlighted that Income’s corporatisation in 2022 was enabled by an exemption from Section 88 of the Co-operative Societies Act, which allowed the company to retain an S$2 billion surplus for financial strengthening.

However, the proposed Allianz deal’s capital reduction seemed to contradict this intention. Without a clear, legally binding plan to safeguard this surplus for Income’s social mission, the government was unwilling to approve the deal.

Despite blocking the current transaction, the Singapore government has left the door open for future partnerships involving Income Insurance and potential external investors. Mr Tong clarified that the government’s objection was not to Allianz itself but to the terms and structure of the proposed deal, particularly its impact on Income’s ability to fulfil its social mission.

“The government’s view is not that NTUC Income should not seek partnerships or external capital; rather, we must ensure that any deal preserves NTUC Income’s ability to fulfil its social mission and does not undermine the cooperative movement as a whole,” Mr Tong stated.

Public Response and Opposition

The public and several prominent figures had voiced concerns following the announcement of the deal in July 2024. The proposal for Allianz to acquire a majority stake in Income Insurance raised fears that the insurer’s social objectives could be undermined by profit-driven motives typical of large multinational corporations.

The public outcry centred on concerns that Allianz, as a global insurer, might not share the same commitment to affordable insurance as Income Insurance, which had been serving Singapore’s working-class population for decades.

Critics were particularly worried that Allianz’s ownership could lead to increased insurance premiums, which might put essential services out of reach for Income’s lower-income clients.

Former NTUC Income CEO Tan Kin Lian expressed concerns about the potential shift in NTUC Income’s priorities, stating that the proposed deal could undermine its original purpose.

Similarly, ambassador-at-large Tommy Koh and former Group CEO of NTUC Enterprise Tan Suee Chieh voiced their opposition.

Mr Tan Suee Chieh went as far as to call the deal a “breach of good faith” and urged government regulators to intervene.

NTUC Income, Singapore’s one and only insurance co-operative, was corporatised in 2022 into Income Insurance Limited “to achieve operational flexibility and gain access to strategic growth options to compete on an equal footing with other insurers locally and regionally”.

Shareholders were assured at the 2022 annual general meeting that NTUC Enterprise will continue to be the majority shareholder of the new company post-corporatisation.

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OrangeTee, JustCo partner to empower agents and clients with coworking solutions

OrangeTee & Tie has partnered with JustCo to provide property advisers with enhanced access to flexible workspaces. The collaboration, formalised on 27 September 2024, aims to equip advisers with industry insights and access to JustCo’s network of coworking centres, enabling them to better serve commercial clients.

Published

3 days ago

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14 October 2024

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Singapore’s leading proptech agency OrangeTee & Tie (OrangeTee) has signed a Memorandum of Understanding (MOU) with JustCo, Asia’s leading flexible workspace provider.

The partnership between both parties was inked on 27 September 2024 at the BMW Eurokars Experience Centre.

The collaboration between OrangeTee and JustCo further opens doors to creating more opportunities for OrangeTee’s property advisers, enabling them to “thrive and deliver greater value to their clients”, said a media release issued on 8 October.

As part of the partnership, there will be a series of seminars hosted by JustCo, focusing on the latest trends within the coworking space industry.

These seminars would equip OrangeTee agents with valuable insights to better serve their clients who are interested in flexible office solutions.

This partnership between both parties aims to benefit the property advisers focusing on the commercial client sector as they delve deeper into the industry insights of the office leasing sector in Singapore.

Beyond knowledge sharing, the property advisers will also have access to JustCo’s network of coworking centres across the Asia Pacific to get first-hand experience of the benefits of coworking spaces such as networking opportunities, greater flexibility, and access to a wide range of amenities.

Justin Quek, CEO of OrangeTee said, “This partnership goes beyond business.

“It empowers our property advisers to provide more comprehensive and flexible solutions to their clients, aligning with the evolving needs of modern workspaces.

“By offering JustCo’s vibrant and collaborative environments, our agents can help clients find the ideal spaces for their different business requirements.”

OrangeTee’s property advisers can enjoy a range of perks as part of the partnership.

This includes preferential rates for JustCo’s membership plans which will give them access to over 40 JustCo centres in Singapore and APAC.

With the flexibility to work from anywhere, JustCo’s membership is a dynamic alternative to support their business needs and provides them with opportunities to network and collaborate within the larger commercial community.

Kong Wan Long, Co-founder and Chief Commercial Officer of JustCo said, “Partnering with OrangeTee expands our agency network, allowing us to work with experts who thoroughly understand the property market in Singapore.

“This will allow us to tap into a wider base of potential clients, providing them with greater access to premium coworking spaces that foster productivity and collaboration.

“This collaboration reinforces our commitment to making workspaces more accessible and empowering businesses of all sizes to thrive in an environment tailored to their needs.”

JustCo has the largest footprint in Singapore with 20 coworking spaces in the Central Business District, East and West regions, including the prestigious Marina One office development and Changi Airport Terminal 3.

From January to September 2024, JustCo experienced a 20% increase in enquiries compared to the same period in 2023, highlighting a growing demand for coworking spaces in Singapore. Earlier this year, JustCo also opened a new centre at Hong Leong Building and 108 Robinson Road.

Chipson Ma, one of the long-service property advisers with OrangeTee since 2000, said, “Founded in 2000, OrangeTee has empowered property advisers with cutting-edge technology for over two decades.

“Tools like our online agent portal (Work@Home) and AgentApp allow agents to work seamlessly from anywhere. Our partnership with JustCo further enhances flexibility, providing agents access to coworking spaces they can also market to clients.

“This added convenience elevates the value of our services.”

The partnership with JustCo is the latest to be announced by the proptech leader.

Only recently, OrangeTee also partnered with automotive technology solutions, Motorist, which allowed OrangeTee clients to gain more leverage on their personal vehicle via Motorist while allowing agents and their clients to have access to various perks from the Motorist Premium membership.

This includes car refinancing options to reduce their clients’ total debt servicing ratio and improve their property loan eligibility.

In mid-September, OrangeTee was also the presenting sponsor for The Home Expo 2024 which brought together more than 12,000 property agents, homeowners, industry experts, and exhibitors to the Suntec City Singapore Exhibition and Convention Centre.

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