Temasek described as "racist", "false" and "divisive" Facebook posts targeting its Indian employees, standing by its hiring policies while calling for more civility on social media.

Posts have been circulating over the past week highlighting the LinkedIn accounts of Temasek's Indian employees, questioning why the investment firm is hiring foreigners instead of locals.

DBS Bank and Standard Chartered Bank have also come under similar criticism on social media, in what observers said are "real inter-group tensions" that need to be resolved.

Temasek said last Friday in its strongly worded statement: "Some of our colleagues from India have been targeted recently on social media by a divisive, racist campaign. This makes us very angry at the false claims perpetuated. The Singaporeans among us are also ashamed at such hateful behaviour on the Singapore social media."

The issue arose after the Ministry of Manpower earlier this month placed 47 employers - 30 of which were in the financial service and professional service sectors - on a watch list for potentially discriminatory hiring practices.

With the number of people working here, excluding maids, suffering the biggest quarterly contraction on record in the first three months of the year, competition for jobs among locals and foreigners has become a hot-button issue.

While much of the decline was due to significant cutbacks in the number of foreign workers, local employment also dropped slightly, the ministry's labour market report released in June showed.

Temasek said 90 per cent of its 600-strong staff at its headquarters in Singapore are Singaporeans or permanent residents, a ratio similar to that of its senior leadership.

Globally, the nationality mix of its employees is about 60 per cent Singaporean and 40 per cent other nationals, of whom around 10 per cent are Singapore PRs.

The top five groups of foreigners it hires are those from China, the United States, India, Britain and Malaysia.

While it will continue to provide opportunities for its Singaporean workers, Temasek emphasised that it "will be foolish of us not to tap the global pool of talent".

"There is not only value in diversity, but the cross-fertilisation of experiences and ideas across geographies, and the ability to connect the diverse dots, has become one of our key strengths," it added.

National University of Singapore sociologist Tan Ern Ser said the Facebook posts are not to be encouraged.

"The tendency for being xenophobic is always beneath the surface. It will generate tensions and, if not resolved, will be expressed in words and actions targeted at the group or community seen as a threat," said Professor Tan.

He urged stakeholders to address the source of the unhappiness that triggers the posts rather than just ban them, as it would drive them underground. "I don't think it's just the pandemic, but any condition that makes people feel vulnerable or unfairly treated vis-a-vis another group or community," said Prof Tan.

"There must be other constructive ways in place for people to vent their anger and trust that their concerns would be addressed."

Institute of Policy Studies senior research fellow Mathew Mathews said people become more attuned to unfair hiring practices in times of economic uncertainty.

"But it is one thing to call for a careful examination of what may be unfair hiring practices, and another to take this out on particular groups of immigrants and say disparaging things about them," he said.

"It takes both locals and foreigners working in Singapore to share the burden of finding creative ways to keep economic vitality despite all the restrictions posed by the pandemic."

Without referring to the incident, Second Minister for National Development Indranee Rajah yesterday warned of "toxic" xenophobia that divides society.

"For us, the key and the most important thing is that... we want Singaporeans to have full employment and good income; it does not mean that we have to be nasty."

She added that Singapore will never be completely self-sufficient.

"Even as (we accept foreigners), it must be part of what we can absorb and we hope that there will be training and skills transfer."