Employers in Singapore agree on long-term advantages of hiring locals, but note 100% local workforce is not possible

Companies in Singapore have pointed out that they see long-term benefits in hiring locals, but employing foreigners is still necessary to fill the gaps in manpower and skills.

In recent months, issues of preserving and expanding jobs meant for Singaporeans have been highly brought up given the worsening labour market conditions due to COVID-19 pandemic.

Based on the unemployment figures released last week, it showed that Singapore’s jobless rate had soared to 4.3 per cent among citizens, 4.1 per cent among residents and 3 per cent overall in July.

To make it worse, 11,350 retrenchments were recorded in the first half of the year, which is higher than the 10,120 reported during the SARS period.

Although the Government stated that it is looking back at its work pass policies and beefing up its efforts to stop unfair hiring practices, but it noted that Singapore cannot completely get rid of foreign talent.

“We must not undermine what has made us successful, by closing ourselves off from the world,” said Deputy Prime Minister Heng Swee Keat during a speech last week, where he reiterated that the country must continue to open its doors to the world.

Hiring locals come with its perks

A company called Dyslexia Association Singapore (DAS) said that having a large amount of local talent helps the organisation prepare its curriculum and deliver its policies to match the local context, said the organisation’s chief executive Lee Siang in an article by Channel News Asia (CNA).

He explained that this is because these employees, who are Singaporeans or permanent residents (PRs), have better understanding of the local culture than foreigners, like the country’s bilingual and intensive education system.

He went on to point out that there are higher chances for locals to stay committed to either the job or the industry given that they are rooted here.

Echoing the same sentiment, the chief executive of SF Group, Collin Ho, added that he has not faced job-hopping issue with his local employees.

He noted that foreign workers are vulnerable to sudden quota cuts, which are applicable to work permit and S Pass holders.

As such, Mr Ho noted that having a large number of local employees is fundamental as the company has plans to expand despite the bleak conditions.

As to why his company, which runs the chain of Collin’s restaurants, prefers to hire Singaporean or a PR, the employer said to CNA that it is “because of the understanding of the local culture, customs, business practices.”

He continued, “(And) if it’s a Singapore brand going overseas … you want to fly the Singapore flag high overseas”, highlighting that the employees get excited of such possibility.

“They say, ‘wow, I’m not just being posted there but I’m bringing Singapore pride’. (They don’t just) represent our culture, our company, but (also) the Singapore pride that (they) go there with and try to set up the same standards of consistency in service and product,” he said.

Additionally, hiring locals also offer companies with cost-saving benefits.

Eugene Tan, who is the head of special projects of a bottled water manufacturer and supplier Wanin Industries, pointed out that it can save on accommodation allowances while tapping on hiring subsidies and grants when it brings in a Singaporean or PR.

A full local workforce is difficult

Over the recent months, issues that are constantly making headlines are Singapore’s foreign workforce and weak labour conditions due to the pandemic. One term that has been heavily mentioned is “Singapore core” and politicians have been pushing employers to prioritise locals over foreigners when it comes to job opportunities.

Economist and associate professor at the Singapore University of Social Sciences Walter Theseira expressed that it is not possible to think that foreigners are only required for the short-term “until some mythical transition to an all-Singaporean economy”.

Foreigners are still needed in jobs like construction workers and foreign domestic helpers, unless Singapore wants to redirect labour resources into these fields.

“The question, therefore, is how to accept foreigners in the workforce while protecting Singaporean interests, especially when Singaporeans compete with foreigners for desirable medium to high skill jobs. I think there is no simple answer to this,” said Assoc Prof Theseira, who is also a former nominated member of parliament.

As for certain jobs that do not require high levels of skills, it makes more sense to give the priority to Singaporeans without disadvantaging businesses. However, for industries where skills are in short supply and stakes are high, then businesses will be on the losing end if it is made compulsory for them to primarily select individuals from a small pool of Singaporeans, he explained.

“What we do need to remember is that Singapore’s main disadvantage is size. Even if Singaporeans are more capable and better educated on average than those from many other countries, the sheer size of many economies produces more talents,” he said.

In fact, the company’s representatives agreed that expecting organisations to function with only locals is difficult.

“More laborious” jobs that require workers to deliver many tonnes of water supplies and dispensers are disregarded by locals, said Wanin’s Mr Tan to CNA.

Mr Lee pointed out that a company “cannot be homogenous” and still needs people with different perspectives. He added that foreign expertise are needed to fill some of the skills gaps.

For example, DAS is looking to introduce dyslexia literacy programme in Malay and Tamil, and in order to do this, it will have to most probably hire experts from Indonesia or Tamil Nadu.

Separately, NUS Business School’s Department of Startegy and Policy assistant professor Ong Pinchuan told CNA that people cannot expect employers to replace foreigners overnight even if a company focuses its resources on local talent.

“Training takes time. (And) foreigners tend to have a more international outlook than locals, and firms might be looking for that, especially in their managerial job candidates,” he said.


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