Singapore employers must learn to reduce their reliance on foreign manpower, said Senior Minister of State (SMS) for Manpower Zaqy Mohamad.
He was speaking on 16 November 2022 at the Ministry of Manpower (MOM) and Singapore National Employers Federation’s (SNEF) dialogue with employers on progressive wage moves at Furama City Centre.
MOM and SNEF held the dialogue to allow employers to raise concerns and clarify doubts regarding the recent progressive wage implementations.
Mr Zaqy represented the Government, while SNEF Vice President Tan Hee Teck moderated the session.
Mr Zaqy said that the reason why Singapore needs to wean off its dependence on foreign labour is a strategic one.
He said: “It was far easier to hire Chinese workers in the past. Today, if you want to hire Chinese workers, it is not so easy. It costs more. That’s because it [the Chinese economy] is a booming economy.
“Today, all the Chinese tech companies are also hiring, so there are plenty of opportunities [back in China]. Why come to Singapore?”
He added that as countries progress, finding foreign workers willing to relocate to Singapore will become more difficult.
“Therefore, strategically, do you still want to be this dependent on foreign manpower in the next 10 to 15 years? Or do you want to prepare today to start to wean off a bit and start thinking automation, start thinking lean and start thinking about redefining our business models?” he said.
The topic of foreign manpower reliance was brought up by an employer participant whose industry relied heavily on foreign drivers. He questioned the need for MOM to enquire how much these workers were being paid.
“What is the rationale for MOM making sure that employers pay a certain salary to our S Pass holders whenever we have to renew their passes?” asked the participant.
Mr Zaqy explained that Work Permits and S Passes are tagged to Singaporean base salaries to ensure that there will not be a wide disparity between local and foreign worker salaries.
“Our Singaporean workers will complain that they are being undercut, that there is a preference for cheaper foreign labour than hiring our Singaporean workers,” he said.
With progressive wages aimed at pushing up the wages of lower-income local workers, the cost of hiring foreign Work Permit holders is expected to increase along with it.
Meanwhile, Mr Zaqy and Mr Tan urged employers to use the Progressive Wage Credit Scheme (PWCS) to raise the wages of their lower-income workers.
The PWCS was further enhanced by the Government on 21 June 2022, allowing employers to tap into the five-year, $3.5 billion PWCS between 2022 to 2026 to co-fund their wage hikes.
Mr Zaqy said: “We did this partially because we want you to support this [progressive wages], and also making sure that the first year out of the COVID-19 pandemic we give a big boost [to employers] because we know people are still recovering.”
