Article: Singapore's journey of balancing dependence on foreign talent


Singapore's journey of balancing dependence on foreign talent

Owing to changes in the business world, countries are keen on developing the potential of the domestic working population and ensure they find gainful employment. This has been especially true for Singapore in recent times.
Singapore's journey of balancing dependence on foreign talent

Singapore over the years has grown to be one the most preferred work destinations not just across ASEAN but much of Asia Pacific. As the nation’s economy developed rapidly, it resorted to a mix of both foreign and domestic talent, with markets opening up to foreign companies and investments. Today the work culture of the company provides a multitude of options that attract foreign talent. Progressive Singapore tax services regime, smart immigration law, and immense job prospects along with a slew of other positive factors encourage foreign resources from across the globe to make the island nation as their favorite working destination. But the realities of Industry 4.0 has been catching up the island nation.

A Cisco and Oxford Economics study released recently highlighted the problem that many countries within the ASEAN region, including Singapore, might soon begin to face. The study which analyzed over 433 occupations across 21 industries noted that Singapore might be one of the worst affected regions when it comes to the job displacing the impact of technological change. It noted that “more full-time workers (21 percent) will probably lose their jobs in Singapore compared to other ASEAN countries.”  Analyzing the prospects of six major economies within ASEAN (Indonesia, Malaysia, Philippines, Singapore, Thailand, and Vietnam), the study revealed a correlation between a high job displacement rate and an “exceptional” environment for innovation and digital transformation. Singapore in recent times has been the hub of digital innovation and transformation in the region, which in turn means job displacement too would be relatively high in the country.

While the study claimed that more jobs will be created because of the economic growth that comes with improved technology, it unfortunately also notes that the ASEAN workforce isn’t ready to fill in these new roles. That is where the Singapore true challenge would lie

Tightening rules of work for foreign talent

With an eye on the changing nature of work, the Singapore government has taken a host of steps in improving both skill levels across its resident population and creating the right conditions for their employment. One of such measures has been to tighten the regulatory measures that allow for foreign workers to find employment in the country. This has been in various ways.

It was reported last years that stricter laws would soon come into place to regulate the flow of foreign talent. In July 2018, Singapore directed companies seeking to hire foreign employees on Employment Passes for positions where the fixed monthly salary is below S$15,000 to advertise the positions at the National Jobs Bank portal for at least 14 days to enable such positions can be applied to by domestic job seekers as well. This applied to all companies with 10 or more full-time employees. 

The change here was made in two key areas. One in the increasing the minimum salary requirements and the other in nature of a business’s workforce. Earlier positions for a minimum salary of S$12,000 and companies with minimum employee size of 25 were subjected to this requirement. The jobs portal itself too was an endeavor to create a streamlined platform for people within the country to access jobs as it was open and accessible only by Singaporean citizens and permanent residents. 

Also, the minimum qualifying salary for an S-Pass has increased to S$2,300 from 1 January 2019 and $2,400 from 1 January 2020. The S-Pass is meant for mid-skilled employees such as technicians and supervisors.

Other more recent changes have happened in revamping sector-specific employment patterns. The Minister of Finance with the Singapore government highlighted in a recent statement that the area of focus has been the services sector. The Dependency Ratio Ceiling (DRC) - which sets out the maximum permitted ratio of foreign workers to the total workforce that a company is allowed to hire, will be reduced for the services sector in two steps: from 40 percent to 38 percent on Jan 1 next year, and to 35 per cent on Jan 1, 2021.

“Relying on more and more foreign workers is not the long-term solution – other economies are developing too,” he added. “What we need is to have a sustainable inflow of foreign workers to complement our workforce, while we upgrade our Singaporean workers and build deep enterprise capabilities in these sectors. We must enhance the complementarities of our local and foreign workers.”

Although such efforts in restricting the flow of foreign talent in the country, there is a need to also support candidates with robust learning and skill-building initiatives to ensure they can find high paying, high skilled jobs. Replacing low skilled jobs would do little benefit as the threat of job displacement due to AI and automation remains high across major economies of Southeast Asia, especially in cases of low skilled jobs. 

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Topics: Diversity, #Jobs

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