Will the effort to hire locals first affect the foreign influx?

From August 2014 if you want to hire a foreigner you will have to go through the process of advertising for a local, first. Ministry of Manpower announced the new measures that will force employers to use the Ministry of Workforce Development Agency job bank for 14 days to advertise. The aim is to try and increase the amount of locals employed before being allowed to employ a foreigner.

Firms with less than 25 staff and those who want to employ people over $12k are exempt.  The above $12k rule is clearly aimed at justifying to locals that only the most expensive and by assumption the most experienced/qualified (not always true) foreigners who are paying the most tax and spending the most in the city are being allowed into the country. This can also mean those with skills and expertise that are not readily available in Singapore.

I can see what automatic knock-on effect from this. Those firms about to recruit a foreigner on 9-11k will quickly increase their offer to 12k just to avoid the delay in going through the process of advertising in the job bank. MOM claims that the under $12k mark captures 95% of all positions in Singapore.

The bizarre thing about this is that Singapore has one of the lowest unemployment rates in the world. I could understand this practice if unemployment rates were high but they’re very low and it’s actually very hard to employ a Singaporean who is out of work. Therefore the unintended result of this will be an increase in job churn, which is already a problem in Singapore.

As more Singaporeans realise they have more power up to the $12k mark they then have more leverage to get a better job elsewhere that pays slightly more. They will be able to do this simply because they know that given a square fight with a foreigner where they match the experience/qualifications that they will now win, whereas before they did not this, for whatever reason.

All this does is leave a hole where they used to be employed and the circle gores around. There is already very little job loyalty in Singapore at this mid-level and this will now just get worse. Give people power and they will use it. In a country where status means everything this is encouraging people to change for a higher status (perceived often rather than reality) in job title which does nothing for employers. Why invest in training if people leave so quickly?

Singapore are copying Hong Kong here amongst other countries. In Hong Kong all companies have to show that they have advertised locally and interviewed local people to then justify employing a foreigner. This they do as a matter of course now and it makes no difference to the amount of foreigners employed. They still employ them, they just have to go through some extra hoops to do so.

To the authorities it does mean that they can point to this as evidence that employers are made to go through these hoops before employing anyone. This gives them some leverage when it comes to the debate of foreigners being employed over locals in the PR battle with reactionaries who believe that no foreigners should be employed. The reality is not quite the case, there are always ways round this kind of tactic.

I know of many Hong Kong firms who merely create job criteria and experience that can’t be gained in the country or ask for something that is beyond what a Hong Kong trained person can do. You can always make an advert fit a criteria for the kind of person you want. The same will happen in Singapore.

Although the MOM are saying that this is not a “Singapore first” policy, it clearly is. Although saying that Singaporeans will still have to compete and show the right skills means that they still won’t be employed in certain fields at certain levels. There are some areas where they just don’t have the right qualifications/experience, especially in the tech and creative fields for example. There are also many areas that Singaporeans simply do not want jobs in, the service industry being one.

Therefore all this means is that these firms who need this expertise/resource will have to wait two weeks longer and have the hassle of interviewing lots of unqualified people before they are allowed to employ people from abroad that actually match what they want. This causes a slowdown in the economy as more resource are diverted to unproductive areas, many would say unnecessarily given the high levels of employment.

This is aside from the fact that from both personal experience and other employers that I have talked to (see my blog on Singapore experience v’s Singapore qualifications from 18 months ago  https://sbr.com.sg/hr-education/commentary/singaporean-qualifications-don%E2%80%99t-mean-thing-without-experience) when you place adverts in local media you just don’t get what you want. Either people don’t turn up for interviews or when they do they ask for extortionate amounts of money comparable to their experience.

When they apply they think their qualifications entitles them to a senior role even though they have no actual or senior amounts of experience and they want a title that they think reflects their qualifications…but not their actual experience. Also once you employ them, train them up and spend time investing in them…they then leave to get a slightly better title with marginally better money elsewhere!

It’s all very well MOM insisting employers advertise for Singaporeans but once employed how will MOM solve the job loyalty problem in Singapore? Full employment and Singaporean first means more power to Singaporeans but does not benefit any employer on any level. It will merely increase fluidity in the market along with wage inflation and title inflation (where people are promoted to titles that either didn’t exist before or don’t mean what they say they do just to keep them happy – cheaper than a pay rise).

The MOM has promised that any company not following this requirement won’t get any EP’s approved. So companies will do it even though it will take longer to place the advert, interview people and prove that the person you have then recruited is better qualified/more experienced for the role than a Singaporean – should that be the case. I can see several court cases where people have not been employed and they see a foreigner has been in the role they interviewed for. Even though that company has advertised through the job bank complaints will be made against them and it will not end there.

Firms that attempt to “go through the motions”, as Acting Manpower Minister Tan Chuan-Jin put it, could face additional scrutiny and be made to show the MOM their organisation charts that detail the nationalities of workers, outline how they recruit, handle grievances and plan progression, as well as craft plans to develop Singaporean staff to take on bigger roles or reduce reliance on EP holders.

The alternative for companies is that they will simply move their operations abroad. Malaysia, Philippines, Vietnam, Indonesia, Thailand, India, Sri Lanka all offer less barriers to employing people and much lower salary rates. You can save up to 90% on the same job with the same person simply by employing them in one of the above countries for example. More measures like this make companies more prone to look for alternative ways of saving time and money by employing abroad, especially if they are regional companies.

My view has also been that you employ the best qualified/experienced person regardless of where they come from. To force people to take a certain section of the community leads to disaster all round. Not good for an employee who can’t do the role and not good for the employer who’s productivity goes down as a direct result of employing someone who can’t do the job.