From September, employers who hire foreign workers on Employment Pass and S Pass will have to pay higher minimum salaries. Is it enough to nudge them to hire more locals or will it affect their business plans?
The Straits Times examines the impact on the retail, F&B, infocommunication and finance sectors.
Salary cut-offs for Employment Pass, S Pass applicants raised thrice in less than 3 years
Employers looking to hire foreign workers will - yet again - have to grapple with paying them higher minimum salaries, as Singapore bumps up salary thresholds for new Employment Pass (EP) and S Pass applicants for the third time in less than three years.
The latest changes will see these qualifying salaries go up by $500 from September, Finance Minister Lawrence Wong announced in his Budget speech on Feb 18.
For older EP and S Pass applicants, their higher salary cut-offs will be raised in tandem. For renewals, the changes will apply a year later - from September 2023.
Retailers hope to attract and train more local talents
Retailers here are struggling with the rising costs of raw goods, shipping, fuel and rental. Adding to their worries now is the increase in salary thresholds for Employment Pass (EP) and S Pass holders that take effect in September.
The hike will put more pressure on the retail sector, which employed 152,600 people as at September last year.
While the Ministry of Manpower (MOM) and the Singapore Retailers Association (SRA) do not have exact figures of foreigners working in the sector, SRA said the ratio of foreign workers to local ones in the industry is relatively low.
Rising labour costs, manpower shortage and expansion plans a concern for F&B owners
Players in the food and beverage (F&B) sector are concerned about rising labour costs, labour shortage and their expansion plans, following the announcement during the Budget speech on Feb 18 that the minimum qualifying salaries for Employment Pass (EP) and S Pass holders will be raised from September this year.
Food and Beverage Management Association president Kung Teong Wah said a few things may happen as a result.
He said: “Wages will go up drastically, which will lead to restaurants scaling down their operations. Some restaurants will close for one day a week to find efficiency of manpower.
Increased salary thresholds for foreigners might deepen hiring woes in S'pore ICT sector
The global shortage of tech talent, which is also reflected in Singapore's labour pool, has driven wages up in the infocomm and technology (ICT) sector and created hiring challenges for firms here.
Such employment woes will be further exacerbated by an upcoming increase in the qualifying salaries for Employment Pass (EP) and S Pass applications, said industry players and observers.
The move will impede overall growth in the ICT sector here, added Mr Wong Wai Meng, chairman of SG Tech, Singapore tech industry's trade association.
Finance sector firms working to tap local talent pool, but need foreign staff to fill gaps in senior and tech roles
The move to increase the minimum salaries of foreigners in the finance sector will put pressure on employers to train more locals to fill the roles.
But in the short term, the acute shortage of workers in specialised and management roles in the sector will continue to drive salaries up further, said companies and experts in the banking and finance sector.
The sector employs about 171,000 workers, of whom about 70 per cent are Singaporeans, 14 per cent permanent residents (PRs) and 16 per cent foreigners on work passes.