Difficulty in availability of experienced, skilled locals compel global firms in Singapore to hire foreigners: Report

For entry-level positions that require fewer than five years of professional experience, 47 per cent of the 127 companies said they had to hire a foreigner because the applicant lacked the technical skills essential for the job.

International companies in Singapore say they hire foreigners for specific expertise or language skills and are making efforts to hire more Singaporeans as they respond to the government’s recent initiatives to ensure that more local people are employed, it was reported on Wednesday.

Singapore’s Ministry of Manpower announced last month that for new Employment Pass holders, the minimum qualifying salary will go up by 600 Singapore dollars to 4,500 Singapore dollars in September, with a higher criteria for the financial services industry.

Heads of business chambers and analysts agreed that the recent changes to the labour policy are unlikely to alter the course of foreign companies in Singapore because the take-home pay is already above the minimum requirement.

Most foreign companies bring in foreigners when there are not enough local workers to perform a certain role or for a leadership position, said Lee Quane, ECA International’s regional director of Asia.

“These are generally critical roles where the employee adds value to the company’s existing Singapore workforce through skills or knowledge transfer or where they are creating business for the company, and adding to Singapore’s economy by performing a role where the company is not able to source a person with the requisite skills locally”, he said.

“These types of roles typically require the employee being relocated to Singapore to possess skills and experience which means that the salaries they will earn will generally be in excess of the minimum wage requirements.”

“It is the non-availability of the specific skills, experience and expertise that makes you go for an EP (Employment Pass), and not a case of salary economics”, the Channel News Asia reported quoting K V Rao, the Southeast Asia resident director of Tata Sons, which has 20 subsidiaries in Singapore.

For instance, in Tata’s Singapore subsidiaries NatSteel and Voltas, Rao said it is hard to find local people for jobs that require them to go out to the field, such as civil engineers, construction supervisors and maintenance workers.

Rao said that practically speaking, a company’s first choice is always to hire a local. Bringing in a foreigner always costs more, he emphasised, as the organisation has to provide them with allowance for housing, education for children, insurance and other living expenses.

Foreigners in Tata are here to take on senior positions that it cannot find locals to fill, he pointed out.

“To be at the senior level, you need somebody with a track record and relevant international experience”, he said, adding many Singapore residents have risen to senior positions in Tata subsidiaries as well. “The talent transfer is ongoing, but it is not overnight”, he added.

Apart from Tata Consultancy Services, where about 40 per cent of its employees are local people, the bulk of workers in its other businesses are mostly made up of Singaporeans and permanent residents, said Rao. He added that most of the company’s EP holders were already paid above the minimum salary threshold.

The Channel had companies saying the move will not affect their plans here, as many firms are already making an effort to hire local people.

Ravi Shastri, Southeast Asia and Taiwan managing director of Thermo Fisher Scientific, said that the company has “a good diverse talent pool which is primarily made up of local talent from various backgrounds”.

“A minority of the workforce is made up of global talent due to the nature of being an MNC (multinational corporation) and Singapore being a regional hub for Thermo Fisher Scientific”, the Channel quoted Shastri as saying. “Just as we have foreigners here on rotation, we have Singaporeans in other offices overseas as part of their career development plan”, Shastri said.

The medical technology giant has been in Singapore for more than 30 years. Thermo Fisher said it has 1,600 employees here and plans to expand its workforce by another 400 “very soon”.

Both Tata and Thermo Fisher did not give the breakdown of their foreign and local workforce.

According to Dr Hsien-Hsien Lei, chief executive of the American Chamber of Commerce (AmCham) in Singapore, American companies want to promote local talent but find it a challenge to do so right now.

Lei pointed to a manpower report that will be published by the chamber this month, which found that among half of the 127 companies surveyed, Singapore residents filled up only half or fewer of their senior level positions, that is, manager and above.

When asked what prevents them from hiring a local for these roles, 89 per cent of the companies said that the candidates lack necessary specialised skills or work experience.

For entry-level positions that require fewer than five years of professional experience, 47 per cent of the 127 companies said they had to hire a foreigner because the applicant lacked the technical skills essential for the job.

“But, definitely the conversation and this change is a reminder to our companies that we need to be more mindful of hiring practices, and overall workplace diversity,” Lei said.

Companies the Channel spoke to stressed that they are making significant efforts to hire and train local people.

Tata Consultancy Services has offered fresh graduate and mid-career jobs through the Infocomm Media Development Authority’s TechSkills Accelerator initiative, Rao said, and most recently, it made available another 100 traineeships to polytechnic and university graduates through the SGUnited jobs scheme.

Thermo Fisher said it has been part of Workforce Singapore’s professional conversion programmes and SkillsFuture’s work-study programme – formerly known as the earn and learn programme – since 2017.

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