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SINGAPORE: Skilled foreign workers could take longer to return to Singapore, and possibly fewer, compared to past recoveries from recessions, economists said following the release of the 2020 Labor Market Report last week.
The report, released by the Ministry of Manpower (MOM), said that while Singapore experienced the steepest drop in total employment in more than 20 years, foreigners bore the brunt of the layoffs.
After months of decline during the COVID-19 pandemic, resident employment – for Singaporeans and permanent residents – increased by 14,900 and recovered to “levels slightly above pre-COVID levels,” MOM said.
This contrasts with the 181,500 jobs lost by non-resident workers in 2020.
READ: The steepest drop in Singapore’s employment in over 20 years by non-resident workers: MOM
Maybank Kim Eng Regional Co-Director for Macro Research Dr. Chua Hak Bin said the employment situation for foreigners may not be a flash.
“Tighter measures for foreign workers and border controls will likely impede the hiring of foreign workers, even for the skilled segment. There is a structural element, not just a cyclical one, as policies shift towards reducing dependence on labor. foreign labor, “he told CNA.
In recent years, the government has gradually restricted the flow of foreign workers and, last year, qualifying wages were again increased for holders of S Passes and Employment Passes.
The minimum qualifying wage for S Passes, which are for mid-skilled employees, rose to S $ 2,500 last year, and the quota of foreign workers was lowered for some industries. Minimum wages for EP holders also rose to S $ 4,500.
COMPANIES CAREFUL WITH HIRING
MOM said nonresident employment declined across all sectors, with the largest share in construction and manufacturing. Three-quarters of the decline was due to holders of work permits and other work passes, who are generally in lower-skilled jobs.
But there was also a drop in foreign skilled labor, with a decrease of 26,000 in S Pass holders and 16,700 less in EP holders.
While there is no breakdown by sector for S Pass and EP holders, Dr. Chua said that industries that lay off foreign workers are likely to be in sectors where job losses have been great. These are found in construction, manufacturing, and food and beverage services in 2020.
“The worst affected sectors such as aviation and accommodation probably laid off more foreign workers, as wage subsidies to retain locals were especially generous,” he added.
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Monty Sujanani, national manager of recruitment agency Robert Walters Singapore, said that, in general, companies have been cautious about hiring during COVID-19.
“Even before COVID-19, companies have always focused on hiring Singaporeans first due to TAFEP regulations, although now there is a greater opportunity to support local hires, particularly Singaporeans who have been laid off or laid off.” , He said.
“At the same time, we have also seen several foreign expats / professionals return home, which has created more opportunities for Singaporeans and public relations.”
He added that for foreigners living abroad, it has become more challenging to relocate them to Singapore, given travel and border restrictions, as well as changes in EP and dependent pass requirements.
MOM earlier this month tightened the requirements for dependents of foreigners who want to find work here.
READ: Dependent pass holders who want to work must apply for work passes starting in May
CIMB Private Bank economist Song Seng Wun said the government’s “interventionist” approach stood out during this recession and contributed to helping locals keep their jobs.
“They moved fairly quickly to come up with support measures to encourage companies to retain local workers, wherever they can,” he said. “And obviously, when there is a closure, for a long time, you end up with foreigners losing their jobs.”
He agreed that the government was trying to “separate” companies from foreign workers after the pandemic. It’s a “good balancing act,” he said.
“We haven’t lost that appeal as a place to live and work. So it’s a question of how much companies want to pay for that. Obviously, we don’t want to be at the point where companies find it too expensive and not worth the money. hassle (of hiring locals). I don’t think we’ve reached that point.
WILL THE JOBS GO TO THE PREMISES?
But DBS chief economist Irvin Seah pointed out that when foreigners lose their jobs here, it doesn’t necessarily mean the jobs will go to resident workers.
Companies can choose to restructure and use more technology or, for certain positions, hire remotely, and the worker doesn’t even have to be in Singapore. But he said they are also more likely to hire a resident who doesn’t have the full skill set and then train for the job.
Robert Walters’ Mr. Sujanani said this is already happening in some companies.
“Companies will need to hire based on potential rather than 100% of the skills they need because there is a limited pool of talent and it is better to provide opportunities for on-the-job improvement for talent to acquire the skill sets they need.” , He said .
“This also doubles as an attraction and retention strategy. More forward-thinking companies are already starting to do this.”
Dr Chua considered that the long-term implications of stricter foreign worker policies will be potential GDP growth, job creation, and weaker tax revenues.
“Living costs and inflation could also be higher if companies cannot increase productivity and have to raise prices due to higher labor costs,” he said.
