Cheap recruitment option of hiring foreign workers

Cheap recruitment option of hiring foreign workers

By Terry Xu

“Looking for any general, unskilled or skilled qualified workers? We do provide foreign workers based on your requirements mainly from China (PRC), Filipino, Indian, Myanmar and Bangladeshi. No charges at all (F.O.C. Services). And we are a licensed and trusted company approved by MOM to recruit People Republic of China (PRC) workers. We will handle all documentation procedures. We also provide WP/EP Online related services such as renewal of your current foreign workers, do online application of your own foreign workers, also provide documentation for all nationalities and etc. As for Local and Malaysian Placement there will be Placement Fee.”

This was written in the unsolicited mail that I received in my previous company’s email, and this is not the only company that had sent my company the advertisement. Many recruitment companies are actively promoting their services to companies who find it “hard” to employ local singaporeans to fill their expanding companies.

What are the primary considerations be when a company seek to hire workers? Whether the person would be suitable for the job, whether the person has relevant experience and whether if they could afford to pay the worker are often the key areas which a company would expect to know when they hire someone.

For companies which are relatively small like local SMEs, there would probably be no human resource department to handle the recruitment of workers that often are on an urgent basis to fill a missing gap for manpower in the company.

Therefore, companies like the one who sent the promotional advertisement is a god-sent for companies seeking a hassle free and yet cheap alternative way to hire people. In the arrangement of hiring foreign workers, the financial burden and hassle of seeking employment is often transferred to the recruitment agencies when hiring of foreign workers without the need to place ads on newspaper or online job portals.

In contrast to this, placement fees to be paid by the recruiting company for a local because the agencies cannot charge the worker for the job introduction. Often, no agency fee, low cost professional worker and the ease of finding the “suitable” employee is the key push in choosing over a local Singaporean worker.

One might argue that the working attitude of the local is also a push factor in the choice of foreign workers over locals. But this would have to be further discussed in terms of pay, social issues and dated expectation of employers of the local workers today.

What would be an issue that would need to be highlighted here is the alarming conflict of interest of the recruitment agency towards the employer. The pay master in the case of hiring a foreign worker would be the foreign worker him or herself instead of the employing company. The agency would be obliged to secure a job of a certain wage for the foreign worker instead of finding a perfect fit for the vacancy that the company is seeking to fill. The agency might not even really bother to conduct a throughout check on the candidate, or even advise how to market the candidate so that he or she could qualify for the job. After all, they would only get paid if the candidate get the job.

So what if the agency promised the sky on what the worker can do but eventually fail to deliver? More than often such recruitment agencies would offer a no cost and fast replacement of staff in the event; should the introduced worker fail to meet the requirements of the company or if the foreign worker fails to turn up for work due to any reasons. This simply become a trial and error process for such recruitment companies instead of the reputable ones who try all means to ensure the eligibility of the candidates before even introducing to the interested companies.

Another issue in this arrangement where the foreign worker is made to pay for the job placement is the pressure placed upon the foreign worker upon employment. If a foreign worker were to have paid a significant amount to secure his or her employment in Singapore in comparison to the monthly wage that is being paid, the worker would feel immense pressure to try to clock more overtime, to seek wage increase or to bear to working conditions that might not have been acceptable in normal conditions. Would the employer be concerned if the foreign worker had paid a sizable sum to get the job? Frankly, not really so long the money does not have to come out of the company’s accounts.

Though the Ministry of Manpower has stated clearly in the new employment agency (EA) regulatory act that EAs can only charge workers up to two months in agent fees. This was not the case with SMRT where the notable incident of the China bus drivers who went on strike in November last year in 2012. The drivers have remarked on the high agency fees that they have pay to get the driving job here in Singapore. TOC was only able to get a copy of a receipt dated 2008 from an ex-driver as the new drivers did not hold copies of the receipt in Singapore.


The receipt states RMB 32,000 has been paid to the agent comes to be about S$6,400. That would be probably be about six months of the basic pay for the drivers. It comes to no surprise that the workers whom have paid so much would face considerable pressure amidst the high workload and perceived unfair remuneration package to earn back this amount, some might have used their life saving for this while some would have borrowed from their relatives and friends, this was equally the case with the story covered by TOC on the workers from Panasonic. With growing living expenses in Singapore, foreigners no longer find it easy to recoup back the agency fee as easy as they would in the past.

The practice is not just restricted in the companies that had their stories covered and there is a growing concern that this has to be tackled upon less another strike take place when some workers decide that enough is enough.

Ultimately, such practices in recruitment of workers have to be seriously looked into and enforced so as not to allow unscrupulous recruitment companies and companies alike to exploit loopholes in the system which would affect productivity level in local companies due to mismatch of employees’ ability and also the spread of the discriminating recruitment practice of foreign workers over locals.

In response to the growing anger over the increasing foreign workforce in Singapore, the government has introduced a series of changes in the foreign workforce policy in the recent Budget 2013 , such as increasing of levy for certain industries over the span of the next few years, lowering of the dependency ratio ceiling (DRC) as well as including a revision of the S-pass applicants wage criteria based on their age.

To further address the issue of foreign workers faking their way through the employment in Singapore, MOM has introduced a new policy change which took in effect from 4th February 2013 to have S-Pass holders to submit their certificates for verification. But this measure only currently apply to certificates obtained from China. While certificates of many universities from overseas are still accepted as eligibility for S-pass applicants who compete with locals graduating from local universities for the same job.

Also along with the policies that discourage the hiring of foreigners, various grants are introduced for local companies to re-look at their current recruitment practice and policies. While the changes made have been promising and clear signs that the government is trying ways to improve the situation. But like they say, “bad habits die hard”.

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