Bosses fear further curbs on foreign manpower

They could cripple struggling firms even after dropping expansion plans

BOSSES fear the White Paper on population could lead to more curbs on foreign manpower and hurt many struggling businesses.

Many companies are already scrapping expansion plans but new restrictions could cripple existing firms, they said.

The White Paper released on Tuesday projects that the workforce will expand at 1 per cent to 2 per cent a year, from now until 2020. Growth will drop to 1 per cent a year from 2020 to 2030.

Based on this, the workforce could grow by about 70,000 a year, down 30 per cent from the 100,000 or so last year, said Bank of America Merrill Lynch economist Chua Hak Bin.

"This implies that curbs are on the way, maybe as early as this Budget," he said.

Kenko Wellness spa chain founder Jimi Tan said he has stopped looking for sites to expand his business and is open to cutting down an outlet or two if rules get tighter.

"We just don't have enough staff. What to do?" he said.

Mr Andrew Kwan, managing director of Italian food chain Pastamania, said further curbs could inflict a lot of pain on small firms.

"Tough manpower policies are not new and have been around for two years. Firms are trying to adjust but if the policies come too fast and are too harsh, a lot of small firms will be affected," he said.

Despite worries over possible further curbs, business groups said the White Paper was balanced.

The Singapore Chinese Chamber of Commerce and Industry (SCCCI) said it supported the Government's objective of generating sustainable growth, but urged it to craft "appropriate policies" to help local firms grow over the long term.

"While we agree that the foreign worker population should not grow to inordinate proportions, we believe that the business community would still require a good number of foreign workers to fill positions for skills that Singaporeans do not have and which are at the lower rung of the workforce," said the SCCCI.

Singapore Business Federation chief operating officer Victor Tay said businesses and individuals have to weigh the trade-offs - slow growth or rising population.

"With slower economic growth, worse business performance, workers' increments and bonuses will be correspondingly smaller. Is that what we all want? We have to come to a compromise," he said.

The tight manpower curbs have pushed firms like precision engineering firm Riso Seiki out of Singapore.

Managing director S.T. Lim moved the manufacturing plant to Batam in 2011, leaving just a team of five here to handle sales and marketing.

The Batam plant is run by 20 staff members, mostly Indonesians, at a fraction of the costs encountered here.

"I saw the tighter rules coming a long time ago. So I moved. And now, I'm better off."

aaronl@sph.com.sg