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Wednesday, August 12th, 2020

Working in Singapore

by April 23, 2016 General

APRIL 24 — It was reported this week that 38 companies in Singapore have been put on a Ministry of Manpower watch-list for failing to hire and train a sufficient number of Singaporeans.

These companies have less than 50 per cent of positions paying over S$3,200 (RM9,230) a month occupied by Singaporeans.  A further 100 companies have been told to act immediately to avoid being placed on the list.

This is the culmination of years of agitation against the ease with which foreigners have been able to gain employment in Singapore and, allegedly, outcompete locals in the job market.

Of course Singapore has long been an expatriate’s paradise with high wage professionals and executives flocking to the city state for decades.

Traditionally the largely Western, well paid expat segment was deployed in the upper echelons of multinational companies (MNCs)  but today foreign professionals  from every part of the world can be found across the managerial tiers of the Singaporean workforce — from retail to creative agencies, engineering firms to biotech, foreigners are everywhere.

This has led to growing angst among the local population and curbs on foreign workers ranks amongst the largest political issues in the country — a hot topic at election time and across the country’s buzzing blogosphere.

Seen here is the Singapore Flyer with office towers and hotels in the background... these days the authorities are making it harder for companies to employ foreigners. — Pictures from AFPSeen here is the Singapore Flyer with office towers and hotels in the background… these days the authorities are making it harder for companies to employ foreigners. — Pictures from AFPThe government’s response has been a sharp tightening of the employment criteria for foreigners.  The Employment Pass (EP) which allows skilled professionals to work in the city is becoming harder and harder to get.

This latest round of tightening has seen the minimum salary required to obtain an EP raised to S$3,300 –anyone earning below that is only eligible for a lower grade S-pass.

Firms hiring foreigners on an EP basis must show a genuine need to hire foreign as opposed to local talent, advertise on the national jobs banks making clear the position is opened to locals, and show commitment to developing and training a Singaporean core before being granted permission to hire a foreigner.

Further, the company seeking the EP must also be deemed to be making a worthy contribution to Singapore’s society and economy. 

This is a tough ask for many SMEs dependent on foreign talent and  MNCs too are feeling  the pinch as they must either raise salaries to keep their foreign staff on EPs or downgrade these workers to S-passes for which the government maintains a cap.

In most fields, companies cannot have more than 20 per cent of their staff on S-passes, a levy amounting in most cases to over S$300 a month is also charged for each S-pass grade worker employed in most sectors.  

For many Singaporeans, the grief faced by job-seeking foreigners seems like good news. In the past, local workers particularly at the entry and mid-skill and experience levels have struggled to get jobs that match local lifestyles and expectations.  Now Singaporeans are a desirable commodity as firms scramble to fill gaps that can no longer be filled from abroad.

While this seems like cause for celebration there’s a danger that these moves will firstly make Singapore less competitive as a business centre, compounding already sluggish growth and making things tougher for all of us.

Secondly the fear is that tight restrictions on foreign workers will turn Singaporeans into place holders.  Anecdotally, I’ve heard of firms hiring Singaporeans just to warm seats so they can hire the foreigners they need to operate.

It seems to be under-reported but it happens and further restrictions particularly may exacerbate this tendency.

This is similar to the situation in many Arab Gulf countries where locals are guaranteed jobs on the basis of their citizenship and secure cushy positions so companies can fill quotas.  Singapore should be very careful of heading in that direction.

It might seem great at first but  becoming a nation of overpaid seat warmers will in the long term destroy  the value of Singaporeans in the labour market and annihilate the work ethic that built the modern nation.

Of course there’s no easy answer to the problem — without restrictions foreigners will swamp our labour market but anti-foreigner legislation has its own draw backs. 

I suspect the solution lies in grooming top level Singaporean leadership particularly in the SME sector.  Companies owned and run by Singaporeans will, most likely, hire more Singaporeans.

Fostering the genuine (not pure not grant driven) growth of these SMEs is the key challenge. It’s the leaders and senior management of these local SMEs who will compete with foreign talent for senior MNC managerial roles.

And it’s these higher echelons that are crucial. More than the S$3,300 EP level Singaporeans need to make inroads at the top.  However, for salaries above S$12,000 there are no restrictions — so the white collar expat with the comprehensive package, car, condo and kids in international school still sits at the top of the wage pyramid.