Total employment declines alongside continued decrease in work permit holders

14 Feb 18

SINGAPORE

IMPACT – MEDIUM

What is the change? The Ministry of Manpower’s recently released Labour Market Report 2017 shows that Singapore last year had its first decline in total employment since 2003.

What does the change mean? The report attributes the decline in total employment to lower numbers of foreign work permit holders in the marine and construction industries. 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.

Key statistics:

  • The total number of employed persons in Singapore hit 3,422,700 in December 2017, falling 249,900 since December 2016.
  • Net local employment grew by about 21,300, or 0.9 percent. This is nearly double 2016 growth numbers 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.
  • The average resident unemployment rate continued to rise in 2017 to 3.1 percent. The average resident unemployment rate rose to 3.0 percent in 2016 after remaining at about 2.8 percent from 2012 to 2015.
  • Locals made up 67.2 percent of the Singaporean workforce (not counting domestic workers) and foreigners made up 32.8 percent. This ratio shows a 0.8 percent shift from 2016 levels as locals continue to make up more of the Singaporean workforce. The proportions reflect the two-to-one local-to-foreigner ratio that Singapore stressed as a key workforce benchmark in the 2016 budget speech.

Background: Following predictions for weaker job growth in the next three to five years, the Singaporean government has increased its focus on protecting local workers. In February 2017, the government announced that it would integrate the Jobs Bank portal with the SkillsFuture platform, allowing Singaporean workers to search for training opportunities and job vacancies at the same time. 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 also expanded the number of companies on MOM’s watch list of employers who fail to give fair consideration to local workers from 100 companies last year to 250. The list was created following the 2014 introduction of the Fair Consideration Framework, which requires that employers provide fair consideration to Singaporean job candidates and fulfill local advertising criteria before hiring a foreign national for a job opening.

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.

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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