The Ministry of Manpower (MOM) does not intervene in the job market by “directly and arbitrarily adjusting” the number of Employment Passes (EPs) or S Passes it issues when there are business fluctuations, Manpower Minister Tan See Leng said on Wednesday.
Dr Tan See Leng was responding to a question filed by Mr Gerald Giam Yean Song, a Workers’ Party Member of Parliament for Aljunied GRC who asked the Minister on Wednesday (22 Feb) whether the job market in the Information and communications (I&C) sector was shrinking and, if so, whether the Ministry had correspondingly reduced the number of employment passes and S-passes issued to foreigners seeking jobs in this sector.
Dr Tan acknowledged that recent news of retrenchments by big tech companies had understandably caused some concerns about the outlook of the I&C sector.
However, he said that the MOM was closely monitoring the situation and that the latest data showed that total employment in the I&C sector had grown by 13,700 in the first three quarters of 2022. In addition, the number of job vacancies in the I&C sector was higher than that observed in the same period in 2021.
However, Dr Tan warned that global headwinds may dampen hiring demand and result in a slower increase in total employment in Q4 2022.
Despite this, he said that MOM remained cautiously optimistic about the long-term prospects of the I&C sector, as tech firms continued to pursue opportunities in Southeast Asia’s growing digital economy from Singapore.
Dr Tan notes that tech skills also continue to be in high demand both within and beyond the I&C sector as the pace of digitalization accelerates across the economy.
Regarding the second part of Mr Giam’s question, Dr Tan said that MOM would not reduce the number of Employment Passes (EPs) or S Passes issued in the event the I&C sector shrinks.
Dr Tan explained that Singapore’s economy is open and connected, and changes in external demand in the global economy can have an impact on local companies and the job market.
The Ministry has designed policies to safeguard good local employment outcomes across the business cycle, and when it comes to foreign workforce policies, MOM has set a quality benchmark for EP and S Pass holders to be pegged to the top one-third of local professionals, managers, executives, and technicians (PMETs) and associate professionals and technicians (APTs) respectively.
This ensures that firms do not turn to cheaper options as a first resort to ride out a business downturn. Currently, the qualifying salary for EPs and S Passes is set at a minimum of $5,000 and $3,000, respectively.
Firms are also incentivized to hire and retain locals. Dr Tan explained that with the upcoming introduction of the Complementarity Assessment Framework (COMPASS) at the EP level, firms with a low local PMET share relative to industry peers will score fewer points on COMPASS and will face a harder time getting the points required for their EP applications.
For the S Pass, Singapore has in place the S Pass sub-Dependency Ratio Ceiling (DRC), or quota. This quota is calculated based on a firm’s total workforce, including how many locals the firm hires.
Hence, should the firm’s total workforce fall when locals are amongst those retrenched, the S Pass quota available to the firm would decrease, and the firm would not be able to hire as many S Pass holders as before.
Finally, under the Fair Consideration Framework, employers are also required to advertise on MyCareersFuture and fairly consider all candidates for the job before submitting an application for an EP or S Pass holder.
Dr Tan noted that foreign workforce policies are complemented by other measures to ensure local employment outcomes are safeguarded during downturns.
For instance, the Tripartite Advisory on Managing Excess Manpower and Responsible Retrenchment (TAMEM) provides guidance to companies on managing excess manpower.
Retrenchments should be a last resort, and selection of employees to be retrenched should be based on objective criteria with primary considerations given to employee merit and preserving skills to ensure business sustainability.
Employers should also take a long-term view of their manpower needs, including the need to maintain a strong Singaporean core. This means that retrenchments should generally not result in a reduced proportion of local employees.
Dr Tan emphasized that MOM does not and should not micro-manage how the job market functions by directly and arbitrarily adjusting the number of EPs and S Passes issued in response to business fluctuations. Such a protectionist measure would cause significant business uncertainty and undermine Singapore’s reputation as a transparent, competitive, and reliable location for businesses.
Instead, Singapore has a comprehensive suite of measures in place that allows it to attract more investments and grow the pie to create many more good jobs and career choices for Singaporeans, said Dr Tan.
The Minister of Manpower also highlighted that Singapore has a robust system of support for local workers who may be impacted by any retrenchments or a shrinking job market in the I&C sector. He noted that MOM’s Adapt and Grow initiative provides a range of services to help Singaporean jobseekers acquire the necessary skills and knowledge to find new employment opportunities.
In addition, the government is committed to providing targeted support to help workers upskill and reskill, such as the SGUnited Skills programme.
Dr Tan assured the public that the Ministry of Manpower remains vigilant and will continue to closely monitor the job market in the I&C sector.
It has been estimated that the percentage of non-native S’poreans in the workforce is 55.6 per cent.