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24 Feb 2014

Is PIC a Government Gimmick that Does Not Benefit Employees?

Note: click here for PIC training

As we know, the PIC (Productivity and Innovation Credit) scheme has been in place since 2010, and has just been extended till 2017.  Under this general and generous scheme, the government gives 60% cash or 3 times additional tax deductions to businesses that invest to innovate and up their productivity. The 8 types of expenditure eligible for PIC Claims are: Training, IT Solutions, IT Hardware, Software, Automation Equipment, R & D, Intellectual Property Rights and Singapore Design Council design projects.

Many employees that we talk to feel that such a scheme only benefits their employer and they cannot see any benefits accruing to them. In fact some employees told us that making PIC Claims only adds up to their already heavy work load.  It's just a government's gimmick, right?

Make no mistake: the Government is serious about making Singapore's employees more productive. When employers receive money from the government, some of them will ultimately flow to their employees, directly or indirectly.  In the short term (1 year), PIC benefits employees directly in 7 ways:
  1. It increases their skill-set as now all trainings are subsided by the government.  Companies know that trained employees will increase the company's competitiveness, and since the net cost of training is only 40%, companies can easily justify training;   
  2. Higher skills will make employees able to do their job easier, thus giving them more peace of mind and more time to spend with their loved ones; 
  3. With increase in skills, employees will earn more than those that are not trained, whether in the form of fixed or variable salary and incentives.  Like one of our trainee, a secretary with a swimming club, she attended sales training in 2012 and now earns incentives every month base on sales closed by her;  
  4. As PIC also funds companies to invest in IT Solutions, IT Hardware and IT Software, employees will find that they have better tools to get more done using less time.  For example, many of them got the latest Samsung Galaxy S5, iPhone 5S and iPad Air for free from their employers. 
  5. In addition, PIC also funds Internal Training up to $10,000 a year, thus giving employees even more chances to be more skilled, leading to higher income and faster promotion;
  6. Other than that, PIC upgrades the entire company's spirit: companies are now very in-tuned into measures that increase productivity.  With higher productivity, employees will earn more;
  7. Most importantly, PIC brings employees closer with their employer.  This is because employees now feel that their employer are willing to invest in them more, be it in the form of training or better IT and equipment to do their daily work.  Such positive feeling undoubtedly boosts morale, leading to higher productivity and ultimately higher income for all.
In fact, the PIC scheme seems to have all the advantages and it will be insane if companies do not take advantage of it.  However, PIC does have one disadvantage that most people are unaware of: what will happen once PIC expires in 2017?  Since there are still 3 years and 6 months more to go, we shall look into this later.  For now, let's enjoy the PIC ride and make ourselves rich! 

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