Low key Middle Ground upper management

It was the opportunity of a lifetime – the chance to work on a solidly-funded news portal with one of Singapore’s most seasoned journalists. How could I pass it up? All I needed was to pull together the seasoned journalist, the news portal and the financial resources to keep the publication viable.

I met Bertha when she had just started up Breakfast Network and was looking for writers. A mutual friend suggested that I could contribute as a volunteer and I was happy to, since I had been blogging on socio-political issues for a while. Bertha was happy to give me a shot and that was the start of a wonderful year where I received my first lawyer’s letter threatening to sue the site for defamation, marked my inaugural participation in a G press conference as a member of the media and watched a whole drama with the MDA unfold. I was keen to sign up to MDA’s demands, but that was a corporate call in the end.

When Breakfast Network was finally closed down, going back to blogging didn’t seem to be quite enough for me. My work in a small PR agency kept me busy and paid the bills for my burgeoning family, but what could have been at Breakfast Network always nagged at me. It was a job left incomplete; an opportunity not seized; a risk not taken.

I spent the next year following up with Bertha, and through her, found the resources to get a newsroom and a small company up and running. As with a new company I had no illusions: nothing would go according to plan, so I detailed a year-long blueprint so that there would be a plan that nothing could go according to. We tried to reconstitute the wonderful ex-Breakfast Network team and offer them something more substantial.

Why, though, would I step away from 12 years of agency life and my stable and growing public relations firm (disclosure: I’m still on the board) to go into the tough, saturated market of publishing, especially in Singapore, where even the incumbents have trouble doing profitable business? Did I really hope to be able to run a sustainable business?

Management scion Peter Drucker said that “there is only one valid definition of a business purpose: to create a customer”. And that is what I hope to achieve at The Middle Ground as publisher. I want to gather readers around our way of doing the news and in so doing, influence the way society thinks. It is long-term thinking; it is something for the next generation, something that doesn’t pander to short term results like mere traffic and clicks but that builds fundamental values.

This is the country and the world I hope to leave to my children – one with citizens who are discerning of the news and of the flow of information (a REAL smart nation), who know the difference between fluff and subject expertise, who can handle both sides of an argument, who respect intellectual property and who are intelligent enough not to get offended or alarmed by satirical articles.

I want this industry to adapt and thrive because we all need it to, and am happy to be one of what I hope are many other news publications and magazines that can chart a new way forward in the digital age and beyond.

And that is why I am trying to fill this gap, even as our team works to fill the digital pages in The Middle Ground. Thank you, dear reader, for reading and for engaging with us. You are our Middle Ground and it is you whom we hope to serve and foster.

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Hawkers – culture killing culture

Minister for the Environment and Water Resources Vivian Balakrishnan bemoaned the risk of Singapore’s hawker trade dying. In spite of his ministry’s efforts to build more hawker centres, he felt that not enough young Singaporeans would step up to fill the shoes of the outgoing generation of hawkers.

“There is a very real chance that we will not succeed because of manpower.” ST reported the Minister as saying, “We can build many more hawker centres, but will we be able to get the hawkers?”

He said that his ministry was pushing for “lower rental rates”, and was hoping to find ways for veteran hawkers to teach their trade. Meanwhile, his ministry would “wait and see”. Is it enough, or fast enough?

The truth is that the Singapore culture is killing hawkers, who are in turn a mainstay of our local culture. Almost all the reasons why the hawker trade is dying can be traced back to the culture we have built.

Globalisation

Hawkers face competition from other kinds of eateries. Without giving market protection to hawkers, you can expect them to die out, just like how supermarkets are slowly killing our mamak stalls.

It’s not just low rents (which don’t exist in popular areas) – preferential access to schemes and perks and tax breaks and rebates are needed, and must be pushed to busy hawkers who have no time in their day to walk to a government office or browse a government website to check out what’s available.

Protected trade

Only Singaporeans and PRs can own or work at hawker stalls. As noble as this may sound, I think that this works against the survival of our hawker trade. Many Singaporeans today are not inclined to work the long hours of a hawker.

Anecdote: a western stall in my hawker centre is run by a couple with a thick mainland Chinese accent (I assume they are PRs). They make great “western food”, Singapore style. If they can adapt to and advance our local hawker culture, it stands to reason that another “foreigner” will be able to as well.

You see, the “foreigner problem” isn’t about them being foreigners – it is about there being an oversupply of foreigners, which depresses wages. Manage the labour supply and it may be possible to allow a quota of foreigners (with tested language skills) to take up a hawking profession.

High rents and subletting

How exactly does the Minister hope to “lower rental rates”? Removing the bidding price floor was a start, as was letting SEs manage hawker centres, but with stalls still generally available for “subletting” (by means legal and illegal), prices of prime stall locations will always be pushed up, giving hawkers razor-thin margins.

Insisting that hawkers run their own stalls and stop profiteering from a rentier mentality will not only improve the prospects of hawkers, it will encourage real expertise as cooks and chefs take ownership of their stalls. Beefing up the supply of stalls in overcrowded areas will also help lower rents. Give grants to shop assistants to take over from their rentier bosses.

Risk aversion and the safety net

Why work 12 hours a day so that you can potentially lose the shirt off your back when nobody shows up at your stall? Why not take a job working for someone else in an entry-level job and still be able to net some overtime pay?

With hawker centre cleaner wages set to rise to $1,200 or more, some hawkers may find it more profitable to throw away leftovers than to put food on the table.  With the massive income gap in our country, we need to equip hawkers to deal with risk, lower those risks and strengthen social safety nets. Maybe free utilities for the first two years of opening a stall.

Lack of respect, lack of prestige

Hawking has long been treated with disdain. It is the last resort of failures and dropouts. Our education system discourages the professional pursuit of our passions, unless that passion is something like engineering, law or medicine.

We need to reform an education system and economy that glorifies paper qualifications and sneers at those who become tradesmen. Hawkers must be made noble. Awards are nice, as Ambassador-at-large Tommy Koh suggests, but hawkers really want some basic human dignity, not the crumbs of elitist meritocracy.

And please don’t make a state-sponsored Mediacorp drama about it. Maybe we can screen “Jiro Dreams of Sushi” instead? It is an excellent documentary about passion for making just one type of food.

Low birth rates

How to pass on a family business to the kids you don’t have? When the government eugenics and sterilization programme ripped our birth rate to shreds in the relentless pursuit of more “graduate mothers”, the hopes of a hawker heritage went out the window.

Our TFR will always be a thorn in the side of our cultural survival. Many suggestions have already been made on how to fix it, but steps taken so far have not been courageous enough.

Some hawkers could take on and register apprentices and could be given cash payouts/rebates if their apprentices set up shop on their own after two years, or if they take over the business.

Infrastructure

Sure, the minister wants to build more hawker centres, but are they in the right places? The Marina Bay Financial Centre and the CBD are overcrowded and undersupplied. Meanwhile, new hawker centres are being built in the boondocks, with stalls in places with low foot traffic. Hawker rents in the CBD are through the roof while new hawkers in new towns see few customers, although rents are lower.

Distribution of hawker stalls needs to be normalised, or else new “city centres” need to be developed quickly (as mentioned in the population White Paper) to divert the working population to fringe hawker centres.

 

Lack of sector development

So, a hawker school. That’s an idea, although it’s already been nose-thumbed by some. The ministry fails to realize that trades like hawking are best taught by a quick foundation in general food industry knowledge, small business management and then years of apprenticeship. A school may not be the best way to pass on knowledge.

Hawkers also need to be resilient businessmen and must be equipped with basic financial management, risk management and other administrative skills associated with the trade.

Singapore restaurant crunch – probably a good thing

So we hear the Restaurant Association of Singapore prophesying doom for the industry and pain for Singapore if the FW tap is tightened. Maybe they are just trying to preempt the reaction to a price increase. Perhaps I am being sensitive, but what chilled me was how the RAS statement read almost like a veiled threat against their customers and the government.

The RAS statement read thus, “Businesses may be forced to shut down or move their operations to other countries, a situation which will deprive the Singapore government of tax income; consumers can expect food prices to increase, due to high operating costs caused by artificial wage inflation, high-cost productivity drive and high rentals

Consumers can expect higher food prices without a concomitant increase in quality and service standards due to lack of manpower. In fact, quality and service may decline…

This justifies the need for more manpower. If the dire situation persists, not only will revenue be channelled abroad, the reputation of Singapore as a global city and its F&B/restaurant sector as one of the most vibrant, could be severely affected.

Like, for real, guys?

“Forced to shut down”

Pardon my ignorance, but doesn’t this happen every day? Isn’t this how the market operates? Poorly managed restaurants will fold or be sold. Inefficient businesses will fail and well-run businesses will survive. When times are good, it is easier for weak businesses to survive, but lean times prove the strong. While there is room for “protectionist” measures like increasing the supply of cheap foreign labour, subsidising operating costs, and absentee-payroll-funded training during downturns, it is very strange to have these “benefits” in place when companies are not at unusual risk of failure.

Being an SME owner myself, I have seen something of how these policies have made my own company “lazy” in our HR and hiring, although I do make efforts to change this. Perhaps too many companies in Singapore have become reliant on “welfare” from our state and need to be weaned off this psychology. Since when should it ever be considered the norm that a government would import cheap foreign labour just so that companies could make better profits?

“Depriving the government of tax income”

Clearly there is no sense of the macro view here, and RAS is simply trying to hold state coffers at an imaginary ransom. For starters, I can’t imagine the impact of the new policies on government revenue (or at least on GDP) hasn’t been estimated already – as weak as the white paper was, it did make clear that we were going for slower growth, but still growth nonetheless. Moreover, what do you think the government does during a recession, when ALL companies and individuals make less money, and hence pay less tax? I’m sure we’ll survive just fine, even if the restaurant industry does shed some profitability. In fact, a bunch of restaurants closing down, or an increase in cost doesn’t necessarily reduce total consumption (GST). Inefficient businesses closing and efficient businesses picking up their clients actually means MORE tax revenue for the government because profit margins are better at better restaurants.

“Caused by artificial wage inflation”

Shortsightedness helps the RAS to ignore the fact that artificial wage stagnation has been happening for years because of the artificial supply of artificially large numbers of cheap foreign workers. Sure, penny-pinching diners are partly to blame as well, but this is certainly not a case of “artificial wage inflation” – it is a market correction for the price of labour. It will hurt for sure since everyone has been operating on the assumption that you can underpay staff and still get everything you (didn’t) pay for, but at least it will reflect reality.

“High-cost productivity drive”

Wikipedia defines productivity as the “ratio of production output to what is required to produce it”. Productivity is about making resources more efficient. If efforts at “productivity” result in the unit cost of the product being higher, as RAS seems to suggest, then you’re doing it wrong. No wonder you can’t get your manpower act together. I sure as heck am not going to pay more for my food just because your “productivity drive” was a dismal failure.

“High rentals”

Perhaps the only semi-valid factor listed so far is the cost of rentals. Market forces and government policies have done little to abate the rising cost of rentals. Yet, this would only be par for the course in business, so feel free to lobby for cheaper rentals, raise prices, or move over and let some other restaurant that is more efficient take over.

“Higher food prices without a concomitant increase in quality”

RAS talks about this like it’s news. Prices at restaurants are always going up without any improvement in quality, and patrons already expect this. Unless you rebrand and relaunch your establishment, nobody is expecting your quality to change much at all. Low-end restaurants will always serve that same quality of food, no matter how much you pay. High-class establishments will (I hope) always deliver the very best, no matter the cost (that’s why you go there, isn’t it?). When the price of a cup of kopi went up by $0.10 or $0.20, did anyone expect better kopi? We just assumed that down the line, someone was getting shafted and had had enough of it, so the consumer had to foot the bill.

Same thing here – staff have been underpaid for too long and somebody is going to have to pay so that some justice can be done. Will quality and service decline? Only if your restaurant sucks. If the customer is footing the bill for the increased manpower cost, we full well expect that standards remain the same or get better (because you will attract better workers). The restaurant isn’t hiring fewer staff, the staff just cost more. If you cut staff, then you shouldn’t increase prices.

“Singapore’s F&B reputation will be affected”

I’m just going to call their bluff here and say that they’re trying to scare us. If our F&B industry is built on the premise of undervalued labour and the concomitant lackadaisical service that we have been experiencing to date, then perhaps that reputation is deserved. I for one would rather make an effort to do it right than to do it cheap and plenty. I wouldn’t equate “cheap and plenty” with “vibrant” either.

During the 2008 global downturn, even star restauranteurs like Gordon Ramsey had to close restaurants in order to survive. Does the RAS expect its members’ businesses to be immune? That is an entitlement attitude of the worst kind.

What I hope will happen

The “dire labour shortage” is a symptom. What contributes to it, however, is the real question. Is it just a question of “too few hands”? Certainly not – there are people in the job market with the ability to fill many roles in F&B. The truth is that the work is hard, hours are long and the pay is low when compared with an equivalent-paying job that is less physically demanding in another industry.

With slower growth in our foreign labour force, I hope to see companies (and staff) taking a long-term view of their HR. Retain and train workers, pay them well, encourage stability and familiarity. Mutual respect between employer and employee will contribute more to productivity than some fancy robot wok-frying machine. In the short stint I did as a waiter for a restaurant chain back when I was 18, I saw examples of how training was vital and gained a healthy respect for the hardened veterans of the restaurant business.

I hope Singaporeans (and foreigners) learn that respect too – for F&B workers and for all professions – because a man who works to put food on the table (pardon the pun) is ultimately always worthy of respect, no matter how much he earns or if he is wiping your spittle off off the table with a cloth. Instead of whinging about rising costs, RAS should welcome the opportunity to raise the quality and status of the people in their industry.