New rules will ensure foreign workers of suitable quality are hired: ST-UOB panel

The minimum qualifying salaries for Employment Pass and S Pass holders will be raised from September. ST PHOTO: KUA CHEE SIONG

SINGAPORE - The new foreign worker policies announced during the Budget presentation will increase costs for businesses, but they will also help to ensure that foreign workers of the right quality are brought in to complement the Singapore core in the workforce, panellists said at a roundtable discussion.

The discussion on Monday (Feb 21) about Budget 2022 was organised by The Straits Times and UOB.

The minimum qualifying salaries for Employment Pass and S Pass holders will be raised from September. Meanwhile, the dependency ratio ceiling - or the proportion of foreign workers a company can employ - will be reduced for the construction and process sectors.

Singapore Business Federation chief executive Lam Yi Young, one of the panellists, said businesses would have preferred that qualifying salaries not be increased, but the move also does not come as a surprise.

"I think the consistent message that the Government is sending to businesses... is that they need to continue to transform, redesign jobs and ensure that they develop the local workforce and take in foreign employees to complement the local workforce in areas where there is a skill shortage," he said.

These areas include higher-end jobs such as in technology, but also mid-range jobs that are less popular with Singaporeans.

"I think this is one area that we need to be a bit more mindful - that we do not, through increasing the qualifying salaries, make it too difficult for companies to bring in some of the S Pass holders to do jobs that are needed in Singapore but which Singaporeans are not so inclined to do," said Mr Lam.

He added that some sectors are already facing shortages because companies let go of foreign workers during the pandemic, while some workers returned home and then could not re-enter Singapore due to closed borders.

Another panellist, UOB economist Barnabas Gan, noted that the lowering of the dependency ratio ceiling will raise business costs.

This ratio is currently one local worker to seven foreign workers, but it will be changed to one local worker to five foreign workers.

To hire more foreigners then, a company will need to hire more locals, which will incur costs, he said.

But perhaps with remote work becoming more prevalent amid the pandemic, it could be possible for companies to hire workers from overseas even if they are not present here, he added.

SPH Brightcove Video
ST associate editor Vikram Khanna moderates the panel discussing the Budget delivered by Finance Minister Lawrence Wong. Subjects include GST, the transition towards sustainability and how to remain competitive to attract MNCs to Singapore.

National Trades Union Congress assistant secretary-general Desmond Choo, who also took part in the discussion, said that at the high end of jobs, the message is still clear that Singapore welcomes foreign talent to grow the economy.

"The sub-message is that while we are open to foreign talent, we are still very mindful that we are looking for quality and complementarity," he added.

This is to ensure Singaporeans, especially the young and the mid-career professionals, managers and executives, have access to good jobs, he said.

Meanwhile, at the lower end, not having access to so much foreign manpower could mean an improvement in productivity for sectors such as construction, which Mr Choo said he has observed over the past two years when access to manpower was tight.

Companies were forced to relook their processes and survive on a leaner manpower structure. "So, now, these measures are going to help these companies to accelerate and continue that momentum so that we can actually do more with less."

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