As the city-state remains amongst the costliest cities to live in.
Twenty-eight-year-old Kieran Hughes had high hopes when he decided to move to Singapore to be with his partner a year ago. In the United Kingdom, Hughes worked as a professional broadcast engineer earning an equivalent of $96,000 a year, enough to pay the mortgage and buy his own car there. With a strong professional background, he thought finding a job in Singapore with the same competitive pay would be easy. But when he started working in an audio-visual firm as a project manager, he suddenly realised that he bought himself a one-way ticket to dismal pay conditions.
Hughes now earns $4,000 a month – just enough to pay his rent in a tiny dwelling and to cover for necessities. He describes living in Singapore as "barely living" and was nowhere near the life that he had back in the UK. "I have a three-bedroom house in the UK with a big garden front and back and I rent it out for approx. $1,000 dollars a month. Here in Singapore, you can barely get a bedroom in a shared apartment for that kind of price," he recalled.
Hughes is amongst the 1.3 million foreigners struggling to make a living in Singapore. And whilst Singapore continues to be the most generous when it comes to expat salaries and benefit packages, it is almost like survival of the fittest for many of the expats like Hughes.
Benefits consulting firm ECA International found that expat packages in Singapore fell 6% in 2017 to $316,600 per annum, inclusive of salary, tax, and benefits. Meanwhile, in its closest rival Hong Kong, expat packages declined 2% to $356,800 per annum. Over the past five years, the gap has widened between Singapore and Hong Kong for the total cost of an expatriate package offered to middle managers.
ECA International regional director Lee Quane said, “Expatriates in Singapore have some or all of their cash and benefits determined in SGD values. For the purpose of our cross-border comparison, we have converted values into USD. As the value of the SGD has fallen against the USD in the past 12 months, USD values of expatriate packages in Singapore have suffered.”
He added that the costs associated with some of the benefits that have been provided to Singapore-based expatriates have fallen in the past 12 months. This led to accommodation costs in areas commonly inhabited by expatriate staff to fall in the past year, reducing the housing assistance provided to expatriates.
However, Quane argued that this would not affect Singapore's attractiveness when it comes to luring talent. "Despite a fall in the value of typical expatriate packages for middle managers, salaries are at their highest level in SGD terms for five years. Low tax rates also mean it remains an attractive location. Beyond salary incentives, Singapore will continue to be attractive to international talent as it is an attractive place to live and work," he reckoned.
Aon Hewitt Partner for Southeast Asia Kumar Subramanian concurred, noting how the declining value of expat packages seem to indicate that Singapore does not need to fork out significant pay premiums to attract expats.
"The value of working in a regional location, and the experience of working in Asia are significant non-monetary factors that global talent find attractive. In addition, a decline in wage increases in Western markets, as well as a greater pool of skilled talent including local Singaporeans and expatriates from emerging markets such as India and China, have moderated increases in expat packages," Subramanian said.
Fabio Fasolo, a 29-year old Italian shared that he is aware of how different it is to work in Singapore than in other rival cities in the region. He served as an assistant manager in Cé La Vi, an upscale restaurant on top of Marina Bay Sands. He received a decent salary for two years since he started working in June 2013 and then moved to Hong Kong.
"In terms of standard quality of living, Singapore has definitely something more to offer--very clean and safe environment, bigger spaces and more new building with many facilities," Fasolo said, noting that his $3,000 could only get him a very small studio in a not well-equipped building in Hong Kong then.
This living condition in Hong Kong pushed him to take his chances in Taiwan where he started working in September last year as the director of restaurants operations in Il Mercato Taipei. And whilst he finds Taipei way behind Singapore when it comes to modernisation and financial power, he said the cost of living in the said city is much lower by almost half.
"Overall, the purchasing power in Singapore for the middle class is higher, but as a foreigner, if you are able to get in Taiwan a good package you can have an amazing quality of living," Fasolo said.
For an expat to survive the high cost of living in Singapore, Fasolo reckoned that one should have a fair monthly salary of about $7,000.
Daniel Deeb Badr, Expat.SG founder said expat salaries and packages are really worsening, mainly in industries where the government got a long term masterplan, such as service industries including food & beverage and retail.
"As long you do not pay more than 1/3 of your salary for rental, the package should be fine. Public transportation is very fast & cheap, and in times of Uber & Grab you do not need a car. Also, food is cheap, in Europe you don't even have the possibility to buy a lunch or dinner for $3," he explained.
Whilst expat salaries are seen to be worsening, Robert Half Singapore managing director Matthieu Imbert-Bouchard said Singapore is still a prime city for expats to relocate to.
He said the reason for the worsening expat salaries was due to the declining cost of accommodation and airfares which may have contributed to the declining value of expat packages in terms of the benefits offered.
"Also, some expats are very willing to relocate to Singapore and may offer to pay for relocation expenses themselves. This, combined with the rising competitiveness of the local workforce, could contribute to the declining value of expat packages," Imbert-Bouchard explained.
However, this should not tarnish the city-state's reputation as an attractive site for skilled professionals. He added that more banking and finance professionals are going to Singapore as visitors and exploring job opportunities whilst they are there. "If people are willing to cover the cost of relocation, then Singapore will continue to be a highly attractive destination for expats," he said.
In the end, companies need to up their game to make sure they retain their staff and offset the impact of skills shortage. Whilst there has been a downtrend in overall expat salaries, more businesses still offer attractive remuneration packages to senior professionals in order to persuade them to make the move to the city-state. But clearly, the days when Singapore was a fully paid expat posting with full benefits are fast coming to an end for all except the most senior executives.
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