F&B firms' labour crunch spins off new market

More companies offering services like food processing and reservation systems to ease manpower woes

F&B firms' labour crunch spins off new market

Mr Lawrence Low of Synnovate Solutions -- ST PHOTO: NG SOR LUAN

For a year, Union Farm Eating House could not find anyone who would work as a dishwasher.

'We advertised so many times, but no one applied. We had part-timers, but they would quit after a month,' said its owner, Mr Chia Kar Wing, 49.

So the Chinese restaurant decided to outsource its cutlery cleaning - it turned to Synnovate Solutions, a company that does dishwashing contract work for restaurants and catering companies.

'This really works for us, it solves the worker problem,' said Mr Chia.

The severe labour crunch that food and beverage businesses face has created a new market: companies that take the manpower woes off restaurateurs.

At least 15 such companies - ranging from food processing to paging services - have either sprung up or started offering value-add services in the last two years.

And all say they are doing a roaring trade.

Synnovate Solutions was set up specifically to take advantage of this particular situation.

The company, which started operations in December 2010, has 13 customers, mostly food caterers. It is in discussions with companies like Ikea, NTUC Foodfare and Resorts World Sentosa, said owner Lawrence Low, 48.

The target, said the former restaurant manager, is to have 40 customers by the end of the year.

'They won't have to hire a dishwasher or allocate space for washing. They will also save on utilities,' he said.

'I am an F&B man so I know the problem. Since last year, many companies have been crying out for help.'

The Government recently capped the hiring of foreign workers and embarked on a drive to push businesses towards higher productivity.

Foreign worker levies were raised progressively from July 2010 and foreign worker quotas tightened.

The move led to a show of public disapproval, with major associations warning of even greater labour shortage and companies claiming that they were understaffed despite numerous hiring runs.

The services sector has been the hardest hit. Here, foreigners can make up only half of a company's total workforce, compared with other industries like manufacturing, which has a 65 per cent quota.

Job vacancies in the services sector stood at 41,200 as at the end of September last year, making up 76 per cent of the total number of vacancies in Singapore.

Fassler Gourmet, which supplies seafood to hotels and restaurants, has 250 customers buying pre-cut and marinated seafood - an increase of 30 per cent in the past year.

Owner Martin Fassler, 50, put the increase down to the opening of the two integrated resorts.

'It was a huge business opportunity. Some of the hotels were so short of staff they were in panic mode,' he said, adding that hotels used to buy whole salmon from them.

'They are telling us that they are short of people and they want us to pre-cut and portion fish for them.'

The company now gets specific orders of salmon cuts, down to the gram.

At Seah's Spices Food Industries, demand for pre-made bak kut teh spices and fried chicken batter has doubled in the past year.

Its owner, Mr Seah Seow Khiang, 64, supplies these items to 20 large hotel and eatery chains, up from 10 in 2009.

'Companies are struggling due to the labour shortage and they are changing the way they do things,' he said, pointing out that the industry also has a very high turnover rate.

'This way, you don't have to keep teaching new workers recipes.'

It is the same story at pre-mix manufacturer Prima Taste and marinated meat supplier Mohamad Armiya Food Industry.

Other businesses like eat2eat, Chope and Verz Consulting are also doing brisk business.

eat2eat and Chope help companies migrate their table reservation systems online; Verz Consulting provides a paging system that beeps when food is ready.

eat2eat has 22 restaurants using its system, up from four at this time last year.

'It lets eateries deploy workers to do other things,' said chief executive Vikram Aggarwal, 47, adding that the system also logs repeat visits and items ordered, which helps make data collection easier.

Verz has 20 clients including Marina Bay Sands, up from five in 2010, because 'more restaurants are going self-service in the light of the labour shortage', said owner Henry Ng, 40.

Chope's CEO Arrif Ziaudeen, 30, called the current labour situation 'the perfect storm'. It has 70 restaurants using its system, up from 10 last June.

A Ministry of Trade and Industry spokesman said companies are encouraged to think about how they can redesign business models and processes to cope with various resource constraints.

'Done properly, outsourcing can help improve productivity,' she said.

Caterers and restaurants are more than happy to take the outsourcing route.

F&B businesses say streamlining their work processes has also led to cost savings.

Tung Lok Group uses a paging system at its self-service Chinese food eatery Ruyi, which has three outlets.

Pagers, handed to diners when they order their food, will beep when their meals are ready for collection.

Tung Lok's managing director Andrew Tjioe said: 'It's definitely one way to save manpower. We don't need people to track who ordered what, and we didn't want servers screaming over the counter.'

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