SINGAPORE - From 2005 to last year, the finance and infocomm sectors accounted for 40 per cent of the increase in Employment Passes (EPs) handed out to foreign professionals. But these two sectors saw even stronger job creation for local professionals, managers and executives (PMEs), said Minister for Manpower Tan See Leng on Tuesday (July 6).

In infocomm, the number of EPs increased by around 25,000, while the number of jobs created for local PMEs was around 35,000.

In finance, the corresponding figures were 20,000 and 85,000.

Dr Tan, who is also Second Minister for Trade and Industry, provided these figures in a ministerial statement in Parliament on foreign workforce policies.

A portion of his speech was spent rebutting the opposition Progress Singapore Party's Non-Constituency MPs Leong Mun Wai and Hazel Poa, who had raised questions and issues on whether the growth in EP holders has come at the expense of local PMEs.

Dr Tan also warned of the dangers of Singapore turning protectionist and rendering it difficult for companies to hire talent from around the world.

"If the competition is not here, it will be outside. The competition will be helping other companies in other countries to beat ours here, and displace our workers," he said.

In response to Ms Poa, Associate Professor Jamus Lim (Sengkang GRC) and Mr Saktiandi Supaat (Bishan-Toa Payoh GRC) asking for a breakdown of workforce numbers, Dr Tan noted that out of around 177,000 EPs as of 2020, about 10 per cent could be found in the manufacturing and construction sectors, with the rest in the services sector.

Within the services sector, the infocomm and professional services sub-sectors accounted for around 19 per cent each, while finance accounted for around 15 per cent.

From 2005 to 2020, the total number of EPs increased by around 112,000; over this period, the number of local PMEs grew by more than 380,000.

On whether this growth in local PME jobs was being enjoyed by Singaporeans, the minister pointed to the low citizen unemployment rate of around 3 per cent over the past decade, and noted that 87 per cent of citizens were born in Singapore.

Competing and complementing

Still, Dr Tan stressed that foreign banks and infocomm companies asked to create jobs here would still need foreign workers to complement the local workforce.

"The simple point is that while we have a good Singaporean talent pool, our pool is not large enough to fulfil all of the needs, the breadth and the depth of these enterprises," he said.

"The misconception is that if we say 'no' to the foreigners coming in... these jobs they would have taken would therefore all go to Singaporeans… Today, even as we speak, we still have about 22,000 PME jobs that are not filled. Companies are desperate to fill these jobs. They would love to take in Singaporeans if they could, because they would be more productive."

Dr Tan asked Mr Leong to "think deeply" about this, and "deliberate and offer some advice".

The minister said: "If we tell companies which want to invest in Singapore that they can only employ Singaporeans, or first employ Singaporeans who have been displaced, regardless of skills, I think the answer will be quite stark. They, I think, would opt not to come into Singapore to invest."

To ensure local workers can compete fairly, work pass controls are in place, so that foreign manpower does "not come to Singapore just because they are cheaper to hire than locals", said Dr Tan.

He pointed to the progressive tightening and raising of quotas and levies at the work permit and S Pass levels, in spite of numerous calls over the past decade from businesses to relax such rules.

Quotas or levies are not imposed on EPs because there is fierce competition for global talent and worldwide shortages in areas such as technology and digital skills, Dr Tan explained.

"A quota would be a hard cap that would limit our ability to compete at the high end of the global economy, while for a levy to have any effect at all on EP numbers, it would have to be set very high and would substantially increase business costs."

Instead, the Government has raised the EP minimum qualifying salary - twice last year, from $3,600 to $3,900 and then to $4,500 - and set a higher bar of $5,000 for finance sector applicants.

Dr Tan then addressed points previously made by Mr Leong on employers of foreign EP holders not being required to make Central Provident Fund (CPF) contributions.

"As foreign PMEs... are not working in Singapore on a permanent basis, I don't think we should be responsible for their retirement adequacy or home ownership needs. Hence I don't think it makes sense for us to extend our CPF benefits and coverage to them," said Dr Tan.

"Instead, when reviewing qualifying salary to maintain a level playing field, we take into account CPF contributions as part of the cost to employers."

He noted that with remote working becoming more prevalent, companies will increasingly find no need to site manpower in Singapore.

"In fact, we may find more businesses simply choosing to move entire business functions offshore if it becomes too difficult, onerous or expensive to operate here," Dr Tan warned. "Singaporeans will end up with the shorter end of the stick as well, by losing some jobs too."

Seizing a 'golden opportunity'

Wrapping up his speech, Dr Tan reiterated the Government's goals for locals to enjoy better jobs and a higher standard of living; to provide a world-class education system and continuous upskilling and reskilling; and to stamp out discriminatory practices to ensure a fair playing field and to protect Singaporean workers.

He called for a joint effort by businesses, workers, unions, trade associations and chambers to create "win-win" outcomes for all.

"And I hope members of all parties take their responsibility as representatives of the people seriously and work towards constructive solutions, and avoid exploiting divisive fault lines," said Dr Tan.

"We are at a critical inflexion point in our economic development. The pandemic has caused significant economic damage the world over. We face many challenges in the post-pandemic era, but there are also abundant opportunities if we play our cards right."

He noted there is now a "golden opportunity" for Singapore to pull ahead, with businesses looking seriously at investing more here - but only if they can get enough foreign workers to supplement the local workforce.

"If we can bring them in, we can continue to grow our economy for another five to 10 years," added Dr Tan. "But if we lose this opportunity, we will not only take longer to recover, the impact will be borne by our older workers, and also by our youth who will graduate into the workforce over the next few years."