Higher salary floor for foreign hires may put financial hub aspirations at risk

Over time, higher wage costs and smaller pool of talent might put off financial institutions investing and expanding in Singapore, say economists

Kelly Ng

Published Thu, Aug 27, 2020 · 09:50 PM

Singapore banks

Singapore

RAISING the salary threshold for Employment Passes (EPs) amid recessionary pressures can encourage financial institutions to hire locals, but some economists think such a "protectionist response" can crimp Singapore's financial hub aspirations in the long run.

The Ministry of Manpower (MOM) on Thursday announced that the salary floor for EP holders in finance will be raised to S$5,000 from December, setting the bar S$500 higher than the tightened criteria for other sectors in the economy.

This is the first time that the Singapore authorities have set higher qualifying salaries for a specific sector to hire foreign professionals.

The move comes in the wake of concerns around discriminatory hiring practices, espec…