In 2003, SIA faced difficulty in the negotiation of wage restructuring and retrenchments with its unions. The SIA management contemplated tweaking the Seniority-based Wage System and moving to a more flexible and competitive compensation structure.

In 2003, Philips Electronics Private Limited, Singapore launched Philips People Services (PPS), a shared services centre to provide various standardised human resource services. With PPS reducing the cost of business support function and improving decision-making related to recruitment and retention activities, the Head of PPS had to mull over a product division head's expectation of lower annual service fee.