Singapore announces tighter rules for hiring skilled foreigners

Reuters

By Kevin Lim

SINGAPORE (Reuters) - Singapore will require many companies operating in the city-state to consider Singaporeans for skilled job vacancies before turning to candidates from abroad, bowing to public pressure over a surge in foreigners over the past decade.

"The measures might mean more hassle and paperwork for companies, and it might even lower the long-term economic growth rate," said Michael Wan, an economist with Credit Suisse in Singapore.

"But I don't think this will necessarily lower Singapore's attractiveness to companies because there are other factors that they take into account -- such as tax incentives, political stability and access to the ASEAN region."

Starting next August, firms with more than 25 employees must advertise a vacancy for professional or managerial jobs paying less than S$12,000 ($9,600) a month on a new jobs bank administered by the Singapore Workforce Development Agency for at least 14 days, the Ministry of Manpower said in a statement.

Only after that period can the company apply for an employment pass to bring in a foreign national.

Singapore will also raise the qualifying salaries for employment pass holders to at least S$3,300 a month, up from the current S$3,000, starting in January 2014, reducing the competition for entry-level jobs that typically require tertiary education.

Singapore, a global financial center and the Asian base for many banks and multinationals, is one of the world's most open economies. Foreigners account for about 40 percent of the island's 5.3 million population and take up many senior and mid-level positions as well as most of the low-paying jobs that locals shun.

The Association of Banks in Singapore, which represents financial institutions operating in the city-state, said banks will need to adjust their hiring processes to comply with the new rules.

"We need to assess the impact these rules will have," a spokesman for the association added.

DISCRIMINATION

Singapore, Asia's main center for private banking as well as commodities trading, has seen a sharp increase in foreigners over the past decade, triggering a backlash from Singaporeans unhappy about congestion on roads and trains as well as competition for jobs.

There have also been complaints about foreign managers who prefer to hire their fellow countrymen rather than employ Singaporeans.

Earlier this year, several banks admitted to "hot spots" within their organizations "where clusters of employees from the same country appeared to have developed over time", according to advertisements taken up by an organization backed by the manpower ministry.

The ministry said it will scrutinize all companies, including smaller firms, for signs of discriminatory hiring practices. Firms that fall into this category include those that "have a disproportionately low concentration of Singaporeans" in professional or management positions compared with others in the industry.

"Even as we remain open to foreign manpower to complement our local workforce, all firms must make an effort to consider Singaporeans fairly," Acting Manpower Minister Tan Chuan Jin said in a statement.

"Singaporeans must still prove themselves able and competitive to take on the higher jobs that they aspire to," Tan added, as officials took pains to stress that the new framework is not aimed at forcing firms to hire Singaporeans first.

Singapore has already been making it harder for employers to recruit cheap workers from abroad in a bid to push up the pay of low-income Singaporeans. The measures include lowering the ratio of foreigners a firm can hire relative to the number of local employees and raising the levy firms must pay to hire lesser-skilled foreigners. ($1 = 1.2511 Singapore dollars)

(Reporting by Kevin Lim and Eveline Danubrata; Editing by Richard Borsuk & Kim Coghill)

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