One of the trends in the Singaporean economy following the strict lockdowns and social distance measures and allied economic contraction is the loss of large number of foreign workers’ jobs.
According to a report by the Ministry of Manpower MOM, Singapore suffered the worst-ever reduction in total employment in more than 20 years and that foreigners’ jobs accounted for the largest chunk of the layoffs.
Commenting on the last week’s Labour Market Report 2020, economists said that lessor number of foreign workers may return to Singapore, compared to past recoveries from recessions.
Following a drastic decline in employments during the pandemic, MOM said that resident employment for Singaporeans and permanent residents have substantially increased by 14,900 and recovered to “slightly above pre-COVID levels”.
Contrary to substantial job gains by Singaporeans and permanent residents, non-resident workers lost almost 181,500 jobs in 2020.
Maybank Kim Eng’s regional co-head of macro research, Dr Chua Hak Bin, said that the jobs situation for foreigners may not be a so bad.
“Stricter foreign worker measures and border controls will likely impede the hiring of foreign workers, even for the skilled segment. There is a structural element, not just cyclical, as policies shift towards reducing the reliance on foreign labour,” he told CNA.
Singaporean government has steadily controlled the flow of foreign workers, and made substantial increments in the qualifying salaries for S Passes and Employment Pass holders.
The minimum qualifying salary for S Passes that is for mid-skilled employees has increased to S$2,500 last year, while cutting the quota for foreign workers for some industries. The minimum salaries for EP holders also increased up to S$4,500.
Companies cautious with hiring
MOM said that non-resident employment reduced in all sectors, with the majority in construction and manufacturing sectors. Three-quarters of the reduction was from holders of work permit and other work passes. These are mostly lower-skilled jobs.
There was also decline in skilled foreign labour, with a 26,000 cut in S Pass holders and 16,700 fewer EP holders.
According to Mr Monty Sujanani, country manager of recruitment agency Robert Walters Singapore, companies have been cautious with hiring during COVID-19.
Following the pandemic, companies focused, first, on local hires, primarily, due to the TAFEP regulations and now there is an opportunity to hire more locals as there are a large numbers of Singaporeans who have been made either redundant or retrenched.
At the same time, a number of expatriates/foreign professionals moving back home, have also created a space for Singaporeans and PRs. For foreigners, moving to Singapore due to travel and border restrictions as well as the changes to EP and dependent pass requirements has become a challenge.
In addition, MOM has tightened the requirements for dependents of foreigners to find work in Singapore.
Some of the economists agreed that the government is trying to discourage foreign business. However, Singapore has not lost its attractiveness as a place to live and work. The situation would not come down to the point that Singapore would be an expensive place to do business.
Will the locals gain the jobs?
DBS senior economist Irvin Seah pointed out foreigners losing jobs doesn’t necessarily mean that the resident workers gain these jobs.
Besides, companies have the option of restructuring and use more technology, or hire works, who could work remotely and these works even have not to be in Singapore. A very effective strategy is that companies may hire semi-skilled workers and give them a training to bridge the skill gap.
Mr Sujanani of Robert Walters said that this is already happening for some firms.
“Companies will need to hire based on potential rather than with 100 per cent skills that they need because there is a limited pool of talent and it’s better to provide upskilling opportunities on the job for talent to acquire the skill sets they need,” he said.
“This also doubles up as an attraction and retention strategy. More forward-thinking companies are already starting to do this.”
However, according to Dr Chua, Singapore’s stricter foreign worker policies will have long term implications and potentially weaken GDP growth, job creation and fiscal revenue. This may result in increasing not only the cost of living, but also inflation and make it difficult for companies to increase productivity and have to raise prices due to higher labour costs.
