Tighter labour market may lower demand for expats

Mr Lee Quane of human resource consultancy ECA International noted that demand for expats in the oil and gas sector in Singapore, in particular, has dropped significantly.
Mr Lee Quane of human resource consultancy ECA International noted that demand for expats in the oil and gas sector in Singapore, in particular, has dropped significantly.

The tightening labour market in Singapore amid the economic slowdown will likely see demand for expatriates shrink, said a human resource consultant.

This, in turn, could open up more job opportunities for Singaporeans, Mr Lee Quane, regional director for Asia at ECA International, told The Straits Times.

"If the economy is not growing, companies' revenues are not growing, the number of job vacancies as a whole will be lower," he said.

"But if a company is looking for a new employee, it now doesn't have to look beyond Singapore's borders to fill a certain role, given the more ready supply of people locally.

"In line with government efforts to make local employees more productive, this should lead to a fall in demand for foreign workers."

But he added that this would apply more to those in junior or middle managerial roles rather than senior executives, who remain highly sought after globally.

Manpower Ministry figures last month showed that the number of job seekers exceeded vacancies for the first time in four years, and that more than 9,500 people were made redundant in the first six months this year - the highest since 2009.

"There is competition from the local workforce, and now that people are less likely to jump from one company to another - which is a reflection of confidence in the economy - there will be a fall in demand for foreign workers," said Mr Quane.

He noted that demand for expats in the oil and gas sector here, in particular, has dropped significantly as firms cut costs to cope with the impact of low oil prices.

The banking and finance sector has also seen lower demand for expats in roles in commodity and currency trading, though those in areas such as fintech and wealth management are still coveted.

The booming technology sector is still a bright spot for employees, both local and expatriate, he added.

While lower demand for expatriates could translate to more opportunities for Singaporeans, Mr Quane noted that some here would still not be keen to fill certain roles, such as those in the services sector.

"For entry-level roles, for example, there will still be demand for foreign workers to do jobs... It's not necessarily because of the salary issue, but because Singaporeans don't see long-term prospects in these jobs."

Salaries for Singaporeans will likely rise at a lower rate this year and next, given the sluggish economy.

That said, the Republic remains an attractive destination for expatriates, he said.

"A lot of younger expatriates come to Singapore because there are a lot of - and better - opportunities... and it gives them good working experience," he added.

A version of this article appeared in the print edition of The Straits Times on October 15, 2016, with the headline 'Tighter labour market may lower demand for expats'. Print Edition | Subscribe