It is employment pass renewal season in Singapore, and the new regime is dominating the conversation at after-work cocktails on Fridays. From September, overseas employees on a work visa would need to fulfill the city-state’s new points-based system, and earn a minimum salary threshold to stay in their jobs. While this mirrors what happens in other countries, it risks turning foreign companies away, and could tarnish the nation’s image as a global business hub.
The program was announced in 2022 in a bid to promote fair hiring practices. Points are awarded for how a candidate’s salary compares with local peers, along with their education and skills, and whether their nationality improves the diversity of the firm. It puts the onus on employers to prove why they need to hire foreigners.
The government knows that catering to the local population on jobs is important. In 2020, resentment over foreign workers led to the worst showing since independence for the ruling People’s Action Party. It is undergoing the biggest leadership transition in its history, and elections are expected by the end of the year.
Illustration: Mountain People
The issue is a vote winner, a convenient political tactic that the opposition and ruling party raise whenever polls come around.
Safeguarding jobs for citizens is not unusual. Many countries —including the UK and Canada — do this, to strike a balance between the foreign and local workforce.
For many sectors, it makes sense to hire Singaporeans: The population is extremely well-educated and regularly scores among the highest in the world in math, reading and science. It has historically struggled with instilling a culture of creativity in the exam-driven curriculum, but there are efforts to change that.
Still, for a government that trumpets an open and free economy, the perception that it is restricting jobs for foreigners, after a history of being relatively relaxed, could do more harm than good.
The new rules are more transparent, American Chamber of Commerce (AmCham) in Singapore chief executive officer Lei Hsien-hsien (雷嫻嫻) said, although she added that they have made it harder for US firms to find suitable candidates.
“At times we do feel that the talent in Singapore may not be ready for senior level jobs,” she said. “Those require different levels of exposure and specific skill sets. It’s a small country, with a limited and shrinking workforce.”
Data from AmCham’s Manpower Survey 2023 support this.
The new framework provides predictability, certainty and transparency, the survey showed, but companies have expressed lower confidence and increased uncertainty about whether it would allow them to access the talent they need.
There are other factors to consider. The new regulations could have an effect on companies deciding to set up their regional headquarters here, recruitment firms have said.
Singapore is also no longer a place where foreign talent can start or develop their careers, the way it used to be about a decade ago. Entry-level and the middle of the market jobs are being reserved for the resident population.
For many locals, this is a long overdue adjustment. Some have told me they have felt like second-class citizens in their own country, passed over for jobs they know they are capable of doing.
There has been rising frustration with what is seen as a preference to recruit foreigners. Many want the government to implement policies that encourage hiring Singaporeans and see the new guidelines as way to address this discontent and growing income disparity.
The changes seem to be working. In the first quarter of this year, employment growth for residents was higher than in previous quarters. Meanwhile, nonresident employment contracted for the first time since the third quarter of 2021, driven mainly by jobs in construction and manufacturing sectors.
It is a tricky balance for the government to get right — keeping the economy open, yet also helping the local workforce achieve their career aspirations.
The Singaporean Ministry of Manpower in an e-mailed statement said that the number of work permits that are available for foreign staff, including the Overseas Networks and Expertise Pass, created for what it calls top talent. It also said that the number of people granted the permission to work has continued to grow, as has overseas investment and the number of foreign firms looking to set up regional headquarters.
The reality is that the government’s focus on foreign talent would soon fade. It is an easy fix for a ruling party that has enjoyed enviable political support over almost six decades since Singapore’s independence. Citizens could instead ask that their leaders address the higher cost of living, income inequality and a brutally competitive education system. The bogeyman of overseas talent might well win votes, but in the longer term it would not fix fundamental issues within Singaporean society.
Karishma Vaswani is a Bloomberg Opinion columnist covering Asia politics with a special focus on China. Previously, she was the BBC’s lead Asia presenter and worked for the BBC across Asia and South Asia for two decades. This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
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