LED Scheme – The Future SME Workforce

Amid an expected slowdown in the growth of workforce in Singapore, the government has been reaching out to small and medium enterprises (SMEs) to help them transition into a manpower-lean organization and guide their future growth in this new environment.

One initiative, which is being led by the Ministry of Manpower (MOM), is the Lean Enterprise Development (LED) Scheme. This aims to help SMEs that are willing to lead the shift to a manpower-lean business, making them the pioneers of this move.

A manpower-lean economy hopes to provide better jobs to Singaporeans by supporting SMEs, which employ and require a lot of workers. With the right support, SMEs should be able to raise their productivity and explore innovations that would allow them to thrive in this new landscape.

The LED Scheme, which began last October 1, 2015, will run for two years and is targeted to progressive SMEs keen to be the early adopters of a manpower-lean organization. It is also eliciting support from SMEs that see the need to develop a high quality team with a stronger Singaporean core.

“Priority will be given to projects which have the potential to be scaled up to create transformational change for their respective industries. Proposals which involve groups of companies and/or are endorsed by the relevant industry association or union will also be given priority,” the MOM said when it announced the LED scheme.

Highlights of the LED Scheme

Expect a more aligned initiative

The focus is to promote a stronger Singaporean core by aligning government support to SMEs. It can be recalled that the government has been helping SMEs upgrade through the SPRING’s Capability Development Grant and the IDA’s Enhanced iSPRINT. These involve capability development, manpower development, and international market development.

With the implementation of the LED Scheme effective October last year, SMEs embracing the change in the business environment should aim for higher productivity and faster innovation, bring about better pay and careers for Singaporeans, and develop highly skilled employees with relevant experience.

Transitional adjustment to gain momentum

To show that a manpower-lean business is viable, pioneer SMEs will be given some leeway on manpower policies that may hinder them from restructuring, during the transition period. Depending on the specific needs of the transformational projects, the MOM may temporarily allow SMEs to reduce the number of Work Permit Holders, employ temporary foreign workers while training locals, and permit the industry to pool foreign experts for the knowledge transfer.

By doing these, SMEs can lower their dependency on foreign workers by making jobs more attractive to locals. SMEs can also propose breakthrough ideas to future-proof industries which could create new jobs that Singaporeans prefer. To fast-track restructuring within the organization, transfer of knowledge is also encouraged.

Reaching out to more SMEs

For better coordination, there is a cross-agency LED taskforce that is setting up various channels to ensure wider reach and integrating assistance schemes already in place to improve services to SMEs.

“Proposals should be impactful, scalable, and have the potential to transform industry practices, within a two- to three-year timeframe. The transitional manpower support for each SME project will be reviewed annually and renewable for up to a maximum of three years,” the MOM said.

To know more about the LED Scheme, visit http://www.mom.gov.sg/newsroom/press-releases/2015/0819-leds