Singapore has long been touted as a global city with a vibrant Food and Beverage (F&B) industry. But in the last few years, taking cognizance of the high proportion of foreigners in the country’s workforce, the Singapore government has implemented measures to encourage industries to raise productivity and work towards a healthier mix of locals and foreigners on its payrolls.
These measures include increasing the foreign workers levy, revising the tiered work visa regime and tightening the foreign workers quota. On a positive note, such measures have forced companies to innovate and upgrade their human resource practices for fulfilling their manpower needs.
But somehow, F&B industry in Singapore has lagged behind.
Problem Faced by the F&B Industry
The renewed thrust on having a healthy mix of locals and foreigners in the country’s workforce means F&B outlets need to hire enough Singaporeans to be able to hire a foreign worker.
Colliers International – a global commercial real estate services organization – reveals that to hire a foreign worker, a F&B business requires at least six local employees. Additionally, the business also needs to pay foreign workers levy (which can be anything between S$300-600) to the government.
Even if the outlet somehow manages to sustain the increased cost, finding locals willing to work in the F&B sector is an uphill task due to the negative perception of the industry in the country.
Some restaurants increased salaries in order to retain trained and experienced staff, but under-staffing is prevalent, leading to fall in service standards. It also doesn’t help when rents in Singapore are sky-high with landlords unwilling to recognise the market realities, putting additional cost pressure on the F&B outlets.
This has led to some of the big names in the F&B sector – Work & Barrel, and the Japanese restaurant group RE&S, closing or decreasing their presence in Singapore.
The situation is so grim that the Restaurant Association of Singapore, which has more than 300 members accounting for over 1,300 restaurant outlets, came up with several proposals for the government to consider and ease the labour crunch faced by the industry. These include adjusting either the Foreign Worker quota or the levy quantum; channelling levy receipts to help businesses enhance their productivity; and tapping alternative sources of labour.
While the first two suggestions are for the government to consider, the last “tapping alternative sources of labour” is for the F&B outlets and businesses to ponder on.
With mind-set changes and proper training, there are several ways to ease this labour crunch and propel Singapore’s F&B sector to higher growth trajectory once again. We elaborate below on how to go about doing it.
Read more about our guide for Singapore’s Food and Beverage (F&B) sector at Singapore Company Incorporation.
