“Higher wages for foreign talent will hurt the competitiveness of Singapore companies”
According to small and medium-sized enterprises, trade associations and economists, increasing wages and levies on the issuance of the employment pass to reduce competition for employment will hurt the competitiveness of Singapore businesses and will increase costs for businesses.
Singapore is surrounded by cities and towns where the costs of doing business are significantly lower. With the digitization of supply chains, the aging population will be completely bypassed, Singapore digital newspaper TODAY said citing Song Seng Wun of CIMB Private Banking.
In the medium to long term, the “considerably higher cost” of doing business in Singapore may affect its suitability as a business hub for many types of goods and services, Song warned.
In order to control the employment of foreigners, the opposition Progress Singapore Party (PSP) demanded that the salaries of foreign talent be raised to 4,500 Singapore dollars (3,330 USD) and 10,000 dollars (7,400 USD) respectively.
PSP Non-Constituency Members of Parliament (NCMP) Leong Mun Wai and Hazel Poa asserted during Tuesday’s debate in parliament that the government’s open door policy on foreign talent has resulted in significant displacement Singaporeans.
Nick Lee, managing director of information technology and support services company AIT Technologies, pointed out that the current Employment Pass (EP) for qualifying executive salary is already high as the industry is unable even attract foreign professionals with the minimum of $ 4,500 (USD 3,330) monthly salary.
He said an increase to $ 10,000 would drive Singaporean businesses overseas, which “again indirectly affects local livelihoods.”
Sim Gim Guan, executive director of the National Employers’ Federation of Singapore, said any adjustment should be gradual and SMEs would be hit hardest by a hard cap on a single nationality, as their sources of labor come from generally neighboring economies.
He noted that the Department of Manpower regularly adjusts the allowable salaries of PE holders to ensure that employers hire good quality foreign professionals, managers and executives (SMEs).
“If the increase goes from $ 4,500 to $ 10,000 in one step, employers would either have to overpay their foreign SMEs or not operate in Singapore because they would not be able to access the required manpower.” , said Sim.
Kurt Wee, president of the Association of Small and Medium Enterprises, called the proposals “unworkable”, saying it would artificially increase costs for businesses and leave them “even less competitive”.
On another level, Sim said it would be difficult to determine what the right proportion of foreign and local talent is for multinational corporations (MNCs).
“As a talent hub for multinationals, Singapore is also a place where local and overseas employees thrive. Foreign employees, in a way, are passing through.
“Overall, the proposals would hurt the competitiveness and sustainability of businesses, which would be detrimental to Singaporeans,” Sim said.
Selena Ling, OCBC Bank’s head of treasury research and strategy, said that a holistic approach can be “counterintuitive” as different industries may have different skill requirements, which may not be immediately obvious. satisfied by local workers.
She cited the construction industry as an example, noting numerous project delays due to border closures that restrict the flow of foreign labor. Local workers are also reluctant to accept these jobs, she said.
“A higher salary criterion and a strict quota would certainly increase labor costs and could be difficult for the companies concerned to accept as the borders remain largely closed due to the pandemic”, a- she declared.
On the other hand, Associate Professor of Economics Walter Theseira of the University of Social Sciences in Singapore said there was apparently not much evidence available on what the PSP expects it occurs when the eligible salaries are increased, and what impact the government itself increases the salary of the EP. floor has had in recent years.
Dr Theseira also estimates that increasing eligible salaries for PE holders “closer to $ 10,000” would exclude foreign nationals from the majority of junior-level jobs and many mid-level PMET jobs.
This means that the ability of businesses to grow would be limited, as they have to depend entirely on Singaporeans and permanent residents, and the population is growing at a “very slow rate”.
“As to whether this is good or bad for the economy, it would likely reduce economic growth in turnover, but it is not clear how this would affect economic growth per capita, as it will likely lead to a shift of a less productive or less productive sector. low value added business activities in Singapore, ”said Dr Theseira.
As for the nationality ceiling, he again stressed that there is no publicly available data to show what type of effect such a policy would have at PMET level.
He said, “We have to remember that even in the case of a business that appears to have a high concentration of foreign nationals in a particular role, that business also employs Singaporeans and contributes to the economy.
“The real problem therefore is how to reduce this concentration without destroying the value that the company generates for its Singaporean stakeholders”.
(This story was not edited by Devdiscourse staff and is auto-generated from a syndicated feed.)