Firms to retain foreign workers despite new salary criteria

QX179R SG

SINGAPORE: Companies Channel NewsAsia spoke with said they are likely to retain skilled, professional foreign workers, despite the new salary criteria that will kick in next year.

They said Employment Pass (E-Pass) holders who have been well-trained will be an asset to the company, even though these workers would cost more with the higher qualifying salaries next year.

However, industry players said that some employers may try to circumvent the new rulings.

Industry players said companies are not rushing to bring forward the recruitment of E-Pass holders before the new rulings take effect.

This is despite wage costs going up, possibly by as much as 3 to 4 per cent, according to some businesses.

Mr Lawrence Leow, president of the Association of Small & Medium Enterprises, said: "Companies will likely continue to renew their existing E-Pass holders because they are well-trained and I don't think they want to lose them."

The tighter E-Pass rules are aimed at ensuring that local workers are not disadvantaged compared with a foreign worker who may be cheaper to employ.

About 30,000 E-Pass holders are likely to be affected by the changes when their passes are up for renewal.

Despite authorities trying to level the playing field, employers said they still have problems placing local workers in some jobs.

Mr Leow said: "Singaporean workers are not going to be (paid) anything lower than foreign workers even with the increase (in qualifying salaries). In my view, it's not likely to happen. The foreigner will continue to be a substitute to the Singaporean workforce and not the other way round."

To beat the higher cost in hiring skilled foreign talent, Channel NewsAsia understands that some companies are switching E-Pass holders to an S-Pass, which has a lower salary requirement.

Ms Dora Hoan, group CEO of Best World International, said: "Let's say they're not worth S$3,000 (minimum salary for the lowest rung of Employment Passes), and we can't pay, maybe we can change them from an E-Pass to S-Pass."

Mr Ronald Lee, managing director of Primestaff Management Services, said: "This is a loophole....where organisations then may save some money. However, there's a need to note that for S-Pass there is a 25 per cent dependency ratio, which means that the company needs to have at least three locals to hire one S-Pass and also there is an annual levy payable for S-Pass."

The government has said that the changes to the E-Pass salaries will not be the last round of adjustments.

As local salaries move up, requirements for E-Pass holders will be tightened further.

- CNA/cc

deathmaster SG

To beat the higher cost in hiring skilled foreign talent, Channel NewsAsia understands that some companies are switching E-Pass holders to an S-Pass, which has a lower salary requirement.

Ms Dora Hoan, group CEO of Best World International, said: "Let's say they're not worth S$3,000 (minimum salary for the lowest rung of Employment Passes), and we can't pay, maybe we can change them from an E-Pass to S-Pass."

Mr Ronald Lee, managing director of Primestaff Management Services, said: "This is a loophole....where organisations then may save some money. However, there's a need to note that for S-Pass there is a 25 per cent dependency ratio, which means that the company needs to have at least three locals to hire one S-Pass and also there is an annual levy payable for S-Pass."

- CNA/cc

Why are companies not able to find locals to fill in their position? Simple. The pay they are giving is too low. After being pampered and spoilt with the unlimited supply for cheap foreigners, they expect Singaporeans to also accept cheap foreigner-level pay. Just take a look at the engineering, construction and manufacturing sectors. The years of cost-cutting measures have cause them to become unsustainable for Singaporeans to work in.

This phenomenon is not restricted to the technical sectors, but is also slowly creeping in to the service sectors, at all level of industries.

At the ground level, we are starting to see more and more foreign customer service officers, in sales, in after-sales service support.

Do you notice more and more foreign accents when you receive calls from telemarketers, selling everything from loans, financial products and insurance.

When you get people to lay fiber optic cable at your house, do you realise that almost 100% of the technical team is comprised of foreigners, mainly Malaysians?

As for other services like aircon repair, house painting, wiring, and your coffeeshop beer ladies, they are more or less 100% foreigners.

At the executive level, it is common to see highly educated Filipinos, PRCs, Indians working at junior white collar positions, such as book-keepers, engineers, sales executives.

The employment trend now is to hire based on contract terms, so that employers have fewer liabilities when laying off workers. How are Singaporeans going to be promoted, if they are only offered contract jobs spanning between 3 months to 3 years?

Also, there are many ways for employers to find loopholes in the employment ratio. It often seems incredible to believe that companies are observing the 25% ratio fair and square. The law dictates the ratio of Singaporeans to foreigners, but not the ratio of the number of Singaporeans in certain job position to the number of foreigners in an equivalent position.

So we see many companies tweaking at both end of the spectrum, where they include the top level management and bottom level cleaners, as singaporeans employed by the company, to hire foreigners to fill mid-level jobs, where salaries can form a signicant operating cost.

With our emphasis on high level education, we are churning out alot of mid-level local workers, with diplomas and degrees. Without experience, they cannot fill up jobs at the top, and are over-qualified to fill up the bottom level job either.

The only job tier in which they belongs, the mid-level positions, are fiercely contested by foreigners too, and this is squeezing them out of decent-paying jobs.

Since there is a mismatch between manpower needs and the provision of education, I think the 2 ministries should relook their missions, and work hand in hand to provide trainings that industries actually requires, instead of what industries theoretically requires.

Loor SG

would employers choose a 'foreign worker' over a local if they were to demand the same pay? Is there a difference?

no one apply for those jobs or asking for too much, so have to look off-shore lor.

Bio-Hawk SG

This phenomenon is not restricted to the technical sectors, but is also slowly creeping in to the service sectors, at all level of industries.

At the ground level, we are starting to see more and more foreign customer service officers, in sales, in after-sales service support.

Do you notice more and more foreign accents when you receive calls from telemarketers, selling everything from loans, financial products and insurance.

When you get people to lay fiber optic cable at your house, do you realise that almost 100% of the technical team is comprised of foreigners, mainly Malaysians?

As for other services like aircon repair, house painting, wiring, and your coffeeshop beer ladies, they are more or less 100% foreigners.

At the executive level, it is common to see highly educated Filipinos, PRCs, Indians working at junior white collar positions, such as book-keepers, engineers, sales executives.

The only job tier in which they belongs, the mid-level positions, are fiercely contested by foreigners too, and this is squeezing them out of decent-paying jobs.

Instead of bitching if running a company was so easy, why don't you just do it?

4sg SG

three issues

1) when companies are addicted to hiring foreign workers, it's almost impossible (not to wane but) to detoxicate them of this hangover.

2) when a company vis-a-vis another company faces with minimum or no comparative advantage, it is always easier and efficient for them to reduce cost thru cheaper labour factor than other means.

3) of all the above categories, the e-pass is the most lax of all the lots. Timely for a review and tweaking of this policy.

charlize SG

Luckily there is still the taxi driver option for Singaporeans.

deathmaster SG

Instead of bitching if running a company was so easy, why don't you just do it?

I don't mind.

You want to sponsor me money to start a company?

deathmaster SG

three issues

1) when companies are addicted to hiring foreign workers, it's almost impossible (not to wane but) to detoxicate them of this hangover.

Companies are always looking for ways to cut cost. Employees are always looking for ways to get pay rise. These are 2 eternally conflicting dogmas in employment.

This cannot be changed, but a compromise can often be made. But somehow, today in Singapore, the balance seems kind of upset, in favour of the employer.

With unlimited supply of labour, money is power, and they have a long list of the lowest bidder.

When they run out of their cheap supply of indian, indo, prc, pinoy workers, don't worry. There are still a long queue of starving africans eager to work for close to nothing.

What the government is supposed to do is to control the floodgate, to prevent the hordes of desperate workers from entering the system.

And apparently, they are not doing a very good job of controlling the physical flood, and the immigration flood.

dragg SG

however the govt change the rules there will be loopholes. employers will circumvent.

all it does is add more money to the coffers.

charlize SG

however the govt change the rules there will be loopholes. employers will circumvent.

all it does is add more money to the coffers.

Every rule comes with a price tag attached.

Bio-Hawk SG

I don't mind.

You want to sponsor me money to start a company?

If you can't even find a sponsor, save the trouble and join the govt.

Hitman Factory 1 SG

everyone in company is well trained foreign or sporean!!!!!!if not then they must be a security guard!anyway its too late for me..i waied for 10 over years in spore.no progress...pack up n go before im too old n tired.