What does Progressive Wage Model (PWM) mean to you in Singapore?

December 6, 2022
#Business

Is Progressive Wage Model (PWM) same as minimum wage?

Progressive Wage Model (PWM) is a wage structure that incorporates a career ladder, designed to link wages to an employee’s commitment to upskilling, thereby improving their wage and skills beyond a fixed minimum wage. Essentially, Progressive Wage refers to the “minimum wage” employees expected to receive for their level of skills and productivity. The training requirement is to support employees advancing their careers by unlocking their potential, and eventually address the issue of stagnant wages. 

What is the effect of PWM?

Balancing Interest

PWM offers employees a transparent career progression that aligns with skill development and enhancements in productivity and industry standards. Simultaneously, enhanced productivity leads to increased profits for employers from improved standards and overall quality. However, it might not always be as straightforward in actual practice. So the question arises: How can businesses ensure compliance with PWM requirements without straining their resources?

Social Equity 

PWM mitigates income inequality. Through guaranteeing, it elevates the living standards of low-income workers, thus fostering a more equitable society as a whole. This represents a societal responsibility effort aimed at addressing income inequality concerns within Singapore.

Workforce Motivation

PWM serves as an incentive for employees to continually elevate their skill sets and invest in their professional growth. It establishes a direct correlation between skill enhancement and higher wages, which, in turn, fosters increased motivation and dedication among workers. This, in essence, propels them up the career ladder and ensures they receive the earnings they rightfully deserve.

PWM Mark: Recognition as a Progressive Employer

Progressive Wage (PW) Mark stands as an accreditation program designed to recognise eligible companies which pay PWs to lower-wage workers. In order to be qualified for PW Mark, businesses must pay progressive wages to their workers under Sectoral and Occupational PW, AND all other local workers at least the local qualifying salary.

PW Mark Eligibility

Employers with PW Mark are profiled as socially responsible businesses that prioritize their workforce’s well-being. This can result in greater visibility and respect in the community and improved talent attraction and retention. Employers also need to possess this PW Mark in order to qualify for government procurement.

 

Conclusion: What do you think about PWM?

It essentially sets out a structured framework for a more equitable work environment, where employee’s wage is tied to their skills and performance, while businesses rely on the productivity and standards upheld by their employee.

PWM works hand in hand with Local Qualifying Salary (LQS) to regulate the hiring of foreign workers. However, achieving compliance can often be complex, and the benefits of improved business performance driven by increased productivity, may not always be immediate. Businesses require efforts in adopting a strategic and cost-efficient approach in workforce planning to optimize labour costs, while maintaining company competitiveness and operational standards. 

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