How Covid-19 is affecting the Singaporean workforce
“The Chinese use two brush strokes to write the word ‘crisis.’ One brush stroke stands for danger; the other for opportunity… ”
The American President John F. Kennedy made this statement in a speech on April 12, 1959.
As most Singaporeans know, it’s not quite correct. But we all love the sentiment. Especially as it’s so relevant for Singapore today as it battles the ravages of the COVID pandemic.
Around the world, the COVID-19 pandemic has been as much an economic crisis as a health crisis. In particular for advanced economies like Singapore’s, which is hugely dependent on global trade and services.
As a country with limited natural resources, Singapore’s most important resource is her human resource – and that includes both local and foreign talent across a wide range of business sectors.
Strategic workforce planning utilising foreign professionals and workers to supplement the local resident workforce has long been a hallmark of business success in Singapore. It’s been a successful formula that has helped Singapore become one of the world’s economic powerhouses.
But that model has come under immense pressure in recent times.
How Singapore’s workforce planning model has changed
From early 2020, the devastating impact of COVID-19 and rising unemployment forced the Government to introduce measures to change Singapore’s workforce planning model by strengthening the Singaporean core of the city state’s labour force at the expense of foreign workers; from high-earning professionals to manual and domestic workers.
Just some of these new measures included:
A Jobs Support Scheme (JSS) and Jobs Growth Incentive (JGI): designed to protect the local workforce by extending wage support to businesses that retain their Singaporean employees. Similarly, the JGI created job opportunities for locals through multiple incentives.
Tightening Employment Pass and Fair Consideration Framework Standards: bolstering EP and FCF requirements increased the red tape for companies hiring foreign workers. Deliberately so.
Raising the Minimum EP Salary Requirement: Firms applying for new Employment Passes (“EP”) for foreign professionals must now pay them a minimum monthly wage of S$4,500, an increase from the previous salary threshold of S$3,900.
Increasing the Minimum Job Posting Duration: By requiring companies to wait longer before making hiring decisions, the government hoped to give local job-seekers more time to respond to openings.
Another element in the mix that influenced the Government’s actions was that the COVID-19 pandemic forced many countries to impose travel restrictions and that affected Singapore’s ability to attract foreign workers.
Striking the right workforce balance
The new measures were purposefully designed to strike the right balance between discouraging firms from discriminating against qualified Singaporeans, yet maintaining Singapore’s reputation as an international trade hub that welcomes foreign professionals.
For example, employers could still apply for an EP but needed to deal with a significantly higher level of review.
This increased scrutiny has forced many businesses to explore other options for international hiring; among them utilising the services of an international EoR (Employer of Record) – a specialised offering of international workforce management firms such as CXC.
EP or EoR?
An EoR (Employer of Record) is a flexible hiring solution that allows companies to quickly and compliantly hire a foreign employee in Singapore by taking on all the legal responsibilities of employing staff on behalf of your organization. It means you and the staff concerned remain fully compliant with local laws and regulations, without the hassle of creating and setting up a separate entity.
It’s a cost-effective and streamlined way to expand a business cross-border. Especially in the midst of a pandemic.
And it’s important to remember that we are still battling our way through COVID here in Singapore, with the authorities currently fighting a rise in infections.
Recent Government initiatives have changed the make-up of Singapore’s workforce in many ways. Balancing the needs of maintaining a strong Singaporean core with the importance of remaining an attractive international business ‘hub’ to global companies has led to many businesses changing the way they hire, as well as who they hire. But the over-riding goal for all stakeholders has always been to ensure a diverse, multicultural and inclusive workforce with healthy competition as well as a strong local talent pool.
The economy has already shown signs of recovery. The government recently upgraded its 2021 GDP projection to a range of 6% to 7%, from 4% to 6%, thanks to vaccinations and improving conditions in key trade partners (1). But the rebound is proving bumpier than expected.
All over the world, COVID has wreaked havoc with economic planning. Most countries are still in the trenches. Singapore however has fared better than most, thanks to strong and agile leadership by the Government.
And the Singaporean people.
For the pandemic has served to highlight some of Singapore’s many strengths, including a team attitude and a strong spirit of innovation. Carefully calibrated safe distancing measures, including the use of digital technology for contact tracing, drew global attention as an example of a smart response. Business have become more agile and flexible. Work patterns have changed significantly; for the better for most employees.
As a result we been able to limit our COVID-19 death toll to under 300.
Meeting all the challenges of COVID has not been easy, but it’s afforded us the opportunity to emerge into a post COVID world, stronger, more adaptable and more resilient than ever before. A true nation of fighters… and winners.
If you’d like more information about global workforce strategies here in Singapore or around the world, and how CXC Global can help you don’t hesitate to contact us today.