Foreign employment continues to decline

21 Mar 18

SINGAPORE

IMPACT – MEDIUM

The Ministry of Manpower has reported the first decline in total employment since 2003, attributing the reduction to lower numbers of foreign work permit holders in the marine and construction industries. Locals make up a growing proportion of the Singaporean workforce (not counting domestic workers) at 67.2 percent, a 0.8-percent increase from 2016. The proportions reflect the two-to-one local-to-foreigner ratio that Singapore stressed as a key workforce benchmark in the 2016 budget speech.

Key points:

  • MOM’s Labour Market Report 2017 reported that the total number of employed persons in Singapore hit 3,422,700 in December 2017, a decline of 249,900 since December 2016.
  • The report shows that foreign employment in Singapore (not counting foreign domestic workers) decreased by about 32,000, or 2.8 percent, in 2017. Last year, foreign employment in Singapore contracted for the first time in years with a decrease of about 2,500, or 0.2 percent, from 2016.
  • According to the report, net local employment grew by about 21,300, or 0.9 percent. This is nearly double the 2016 growth of 11,200, or 0.5 percent, but still lower than levels seen in 2012 through 2014. Net local employment grew by 58,700 in 2012, 82,900 in 2013 and 96,000 in 2014.

Background: The Singaporean government has increased its focus on protecting local workers following predictions of weaker job growth in the next three to five years. The country has long stressed the importance of not only developing a strong local workforce, but developing employee-lean operations, with officials saying that Singapore’s limited workforce could be a “bottleneck” to growth.

Authorities expanded the Fair Consideration Framework rules in March to include employers with 10 or more employees. Originally introduced in 2014, the Framework requires that employers provide fair consideration to Singaporean job candidates and fulfill local advertising criteria before hiring a foreign national for a job opening. According to Minister for Manpower Lim Swee Say, the total number of companies that have been on the watch list over the past two years has reached 500 – including about 150 that have changed their practices and have since been removed. The information provides yet another indication of how aggressive Singapore has become in protecting and promoting its local workforce.

BAL Analysis: All indications point to a continued government focus on promoting the local workforce, which may lead to greater scrutiny of foreign workers and employment pass applications to ensure that companies do not discriminate against local job applicants. Foreign workers are still in demand in Singapore due to a potential bottleneck in local employment growth. For additional information from the Labour Market Report 2017, view BAL’s previous alert here.

This alert has been provided by the BAL Global Practice group in Singapore. For additional information, please contact singapore@balglobal.com.

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