SINGAPORE SMEs are feeling the pinch in the tightening labour market here, according to the findings of the latest UPS Asia Business Monitor (ABM) 2008 released yesterday.

Now in its fourth year, the UPS ABM 2008 surveyed 1,201 SME leaders across 12 markets in the Asia-Pacific region, out of which 100 were from Singapore.

While over 80 per cent of respondents in Singapore cited availability of a qualified workforce and the cost of labour as important factors in contributing to SME competitiveness here, these two factors remain the top obstacles to SME competitiveness in Singapore.

Fifty-three per cent and 54 per cent of respondents considered the availability of a qualified workforce and the cost of labour to be obstacles to SME competitiveness here respectively, ahead of property leasing and management costs and the lack of the entrepreneurial spirit.

In addition, the top concern among Asian SME leaders responding to the UPS ABM this year has shifted from the quality of products and services to the retention of quality employees, with 50 per cent of respondents listing it as one of their three top business concerns.

This concern is most pronounced in Australia and China, at 66 per cent and 64 per cent respectively, while less so in Singapore at 38 per cent, where financial performance, customer loyalty and political and economic stability were of a greater concern.

With 50 per cent of Singapore SME respondents projecting an increase in their workforce, up slightly from 47 per cent the previous year, the figures suggest that the tight labour market here does not show signs of easing, especially since local SMEs currently employ more than half of Singapore's workforce.

At the Singapore International Chamber of Commerce (SICC) Annual General Meeting earlier this week, Mr Lee Tzu Yang, chairman of the SICC, also said that according to its industry groups, the shortage of expert and accomplished personnel extends across many industries.

He said, 'Our worry is that many of Singapore's key industries may face labour shortages unless the nation can attract, train and retain people with the skills our key industries require.'

This article was first published in The Business Times on May 28, 2008

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