Productivity

If you haven’t seen this word recently, you are probably in another part of this world. It’s all over the press and is part of the Economic Strategies Committee (ESC) recommendations. This prompted me to take a look at the level of our productivity over the years. This is a topic that is very close to my heart and something that has been bothering some of my dearest friends since the end of 2009.

Let us start by examining how productivity is calculated. As extracted from the Department of Statistics, Singapore, which I quote here, “Productivity measures how much output is produced relative to the inputs of labour, capital (plant and equipment) and technology. An increase in productivity implies that more output can be produced with the same (or less) inputs.”

In particular for the financial/services sector, it might be measured based on revenue generated by an employee divided by his/her salary, meaning

Productivity = A / B, where
A = Revenue Generated
B = Salary of employee

Without any advanced mathematics, one would know that to increase the productivity, it really means increasing revenue or reducing salary of the employee. I really hope that the result of the recommendations would be more of the former than pure cutting back on employee’s salary. Yes, it would lead to short term measures of productivity gains but over the mid to longer term, it could result in other repercussions including low staff morale and eventually staff turnover. So if you are employer and you are reading this, please do not try to increase productivity merely by cutting pay of your employees.

On a broader perspective, I secretly hope that ESC recommendations would result in the creation of more high value jobs in Singapore’s financial center. This sentiment is shared amongst some of my peers. Over the last couple of years, job creation in Singapore seems to be concentrated on middle and back office roles. While these roles still provide a good level of income, many crave for the intellectual simulation and the dynamism that a front office role may bring. Others are simply more pragmatic and are drawn by the potential returns. However, while we speak, the China story continues to play out. Backed by a huge hinterland, it seems logical that financial institutions looking to expand into Asia would choose Hong Kong or even Shanghai to base their operations. My bet is on North Asia but I must qualify that Singapore can have a chance if it can concentrate and excel in specific niche areas such as Private banking/Asset management, FX/Rates/Commodities trading, etc…

Nevertheless, Hong Kong and China remains a destination pretty much in my radar for future career opportunities. Reverse migration and re-tracking the route that my forefathers took when they came down south looking for a better living seems the norm these days.

Anyone from Singapore working in the financial industry there? Do drop me a note, interested to find out more.

A New Beginning

Hey, I’m on. To this whole new whole of blogging that has captivated the world for quite a period of time. It really took me long enough to start this blog of my own and it took be even longer thinking for an appropriate theme for my blog.

“Engineering for a better future” this exemplify what Singapore needed during the founding years of this very new nation where I was born. In the 80s and a great part of 90s, students were sent through engineering schools to be trained as engineers as they were believed to be the essential building block of a new nation like Singapore. As a result, many of my friends, colleague mates and family, including my elder brother was trained or graduated from the local university as an engineer of sorts.

I was never the type of student that fancied engineering subjects. Physics and Chemistry put me off, as a result, I chose the path less travelled against the wishes of my parents, actually it was only my mom and took a degree in Finance. Reason being that mathematics was the subject that interested most. (Not that I liked studying.)

Five years through a very bumpy career path, I realized the true meaning of “Mummy knows best”. The demands of the financial industry have brought me back to school. No more hiding from engineering subjects this time round. I took the plunge and took up a Masters Degree in Financial Engineering at the local university, which explains the title. Not sure if it’s apt in paving the way for future blog posts because while I am interested to share more finance based discussion on this blog, I would also like this blog to be a record of my thoughts and feelings. Well, no point thinking too much, just work with this.

To conclude my virgin post, I shall leave my first readers with one of my favorite quote from Albert Einstein and to quote, he said “Imagination is more important than knowledge”. The ability to apply this to the different facets of our life could bring many unexpected results. If one you could imagine how the financial markets would be 1, 5, 10 years down the road, investment decisions could be made. Lets all start imaging from this moment onwards.