PROGRESSIVE and flexible labour practices, skills training and more transparent communications will accelerate Asean's economic development, a study has found.
The study, by consultancy firm Mercer, looked at labour practices across the 10 Asean markets and the impact of Asean integration on labour markets.
Progressive labour practices were found to influence business and foreign investment. As such, Asean must review labour practices in consultation with major stakeholders to create a more favourable investment environment, the study report says.
From speaking to 90 multinational corporations, Mercer found that the availability, cost and quality of labour are among the criteria companies use when choosing a country in which to set up operations. Labour law flexibility is also a factor.
As such, 'every country needs to play to its strength' as investor decisions are multi-dimensional, said Mercer's managing director Su-Yen Wong. 'Singapore has done a pretty good job in that respect.'
In Singapore, labour costs are higher than in other Asian regional countries, but the work force is more skilled.
According to Mercer, Asean also stands to benefit from its unique partnership approach - employers, unions and governments work together.
Ong Yen Her, divisional director of labour relations and workplaces at Singapore's Ministry of Manpower, said: 'As Asean forges ahead with closer economic integration by 2015, it would be useful for Asean countries to continue to build on the strong tripartite relations among the governments and social partners.
'Good tripartite relations are key to ensuring harmonious industrial relations, which will allow the region to focus on productivity-enhancing work instead of mediating disputes.'
Mercer says that another area which has room for improvement is labour market statistics, which are generally not well collected or well shared. A bigger collection of quality labour data, which should be shared across ministries and governments, will facilitate accurate labour forecasting and national planning, it says. Businesses would benefit greatly from this.
Finally, skills training will help raise quality of labour. Labour ministries should work closely with trades, industries, education and planning ministries to align education policies with economic planning, says Mercer.
Doing so will improve the quality of future labour supply and national competitiveness, as well as provide the right capabilities for growth industries.
The study will be presented at the Asean Human Resources Summit tomorrow.
This article was first published in The Business Times on October 22, 2008.
