Budget roundtable

Extend skills upgrading to foreign workers

Panellists largely agreed that Singapore faces a serious labour crunch without foreign workers, despite attempts to offset the problem through automation and the retention of older employees.

United Overseas Bank economist Francis Tan brought up what he has dubbed the "trilemma" of Singaporeans' preference for fewer babies, lower immigration and less taxes. "If you have all three, the Government can never receive enough revenue to fund all the expenditure, especially for the ageing society," he said. "So we need to really relax some of these."

One approach in the Budget is a pilot Capability Transfer Programme, which aims to transfer skills from foreign specialists to Singaporeans.

The initiative was hailed by panellists, with Singapore Business Federation chairman Teo Siong Seng saying that while more details have yet to be released, the scheme "highlights getting the right people, including foreign talent, to come and help us to digitalise and go international".

Businessman Ernie Koh advocated extending the benefits of skills upgrading to rank-and-file foreign workers as well, citing his experience with small and medium-sized enterprises (SMEs).

He noted that a foreign worker arriving here to perform construction work may have been a farmer in his own country not that long ago.

"Productivity is calculated by innovation plus worker," said Mr Koh, executive director of furniture company Koda. "You train a lot of Singaporeans, you innovate. There are about 900,000 foreign workers in Singapore. But as an SME, I don't train them."

Why? Mr Koh said it becomes costly to train them as there is little funding. In addition, as employers have to pay a foreign workers' levy, they can't afford to pay their foreign workers a premium. "If you are able to put something into here to train this up, perhaps your productivity can skyrocket," Mr Koh said.

But he added that such a move would be politically tricky "because the Singaporean will say, 'Why are you training these people?' "

Mr Teo echoed Mr Koh's suggestion, while acknowledging that employers may fear a foreign worker would jump ship after acquiring more valuable knowledge.

"I look at it the other way," he said, citing findings from a business mission to Bangladesh and Myanmar, where he noticed that some Singapore companies were hiring Bangladeshi nationals who had previously worked here.

"They're half-trained already," said Mr Teo, calling this practice an "advantage" for Singapore businesses abroad. "It may look at first that we're actually spending money on foreigners. But if we can train them to be more focused, these people can in fact help Singapore companies to go international because they have more affinity for the Singaporean culture, the Singapore company, whether it's Vietnamese workers (or) Indonesians."

Mr Teo suggested that "it's also about time that we actually have another discussion on population and immigration", after the Government's unpopular Population White Paper in 2013.

Annabeth Leow

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A version of this article appeared in the print edition of The Sunday Times on February 25, 2018, with the headline Extend skills upgrading to foreign workers. Subscribe