You are here


Singapore Budget 2018: That missing debate on Singapore's foreign talent policy

By standing firm on Singapore's approach to foreign manpower, policymakers are essentially signalling that Singapore is prepared to sacrifice some growth now, in the hope that companies' efforts to transform will bear fruit in future.


AMID the furore over taxes in Budget 2018, the critical question of Singapore's approach to foreign talent in the face of major manpower and demographic challenges went largely undebated.

Foreign manpower is a hot-button issue and understandably so, one that sits uncomfortably with the public. In the run-up to the Budget, segments of the business community lobbied for a more flexible approach to foreign manpower as part of the wider push to help companies go digital and adopt new technologies. But the Parliamentary debates on Budget 2018 have largely skirted around the issue - partly because the proposed Goods and Services Tax (GST) hike grabbed most of the attention.

Of course, it is important to discuss how Singapore should keep its fiscal position healthy even as spending needs grow.

But arguably, debating how the country's approach to foreign manpower should evolve in the coming years is equally or even more, some would argue, fundamental and urgent.

For one, companies say they are already losing out on growth opportunities.

Even as the global economy gains traction, many companies are looking to take on more projects, go digital, or venture into fast-growing tech sectors.

Singapore - like many other tech ecosystems - is facing a shortage of highly-skilled tech talent to fill roles in data analytics, artificial intelligence and cybersecurity, to name a few. Good coders, programmers and designers are also needed to help companies transform digitally.

Companies have told The Business Times that Singapore's tech manpower shortage is holding back their growth plans. For many, especially if the company is a startup or fast-growing tech firm where keeping costs down is vital, the talent they want to bring in often fall in categories below the Employment Pass salary level, where quotas apply. Many feel they have no choice but to outsource their tech operations, or hire teams overseas while maintaining their headquarters in Singapore, or forego the opportunity.

This suggests that the Singapore economy could be growing at a faster pace, if companies were allowed more leeway to hire the foreign talent they need for in-demand tech roles.

The pressure on the economy will only intensify in the coming years as Singapore's demographic challenges become increasingly acute, as Finance Minister Heng Swee Keat pointed out at a Lianhe Zaobao Budget forum on Monday.

Mr Heng said Singapore companies have "a narrow window of opportunity" to ramp up their digital transformation efforts and raise productivity over the next few years.

This is because challenges surrounding the country's ageing population and shrinking citizen labour force will become more severe in as little as five years' time, he noted.

But Mr Heng also made clear there will be no major tweaks to Singapore's foreign manpower policy in the coming years, to encourage companies to stay the course with restructuring.

Instead of addressing business concerns by relaxing foreign manpower rules for certain sectors or job roles, policymakers have opted to focus on building up capabilities among Singapore companies and in the local workforce.

For instance, Manpower Minister Lim Swee Say on Monday revealed more details of a programme which will give employers funding support to source trainers from overseas, in a bid to help local workers pick up skills which may be lacking in Singapore.

He also announced tighter hiring rules which will require more firms to give Singaporeans a chance to apply for higher-skilled jobs ahead of foreigners.

These are necessary moves to develop and safeguard the Singapore workforce, as companies and workers here grapple with the impact of disruptive technologies and the breakneck pace of change.

Ongoing efforts to re-train workers for fast-growing sectors - for example, the Professional Conversion Programmes - are also steps in the right direction.

But it will take time to build up key skills and capabilities locally. And in the meanwhile, companies may have to miss out on growth opportunities. By standing firm on Singapore's approach to foreign manpower, policymakers are essentially signalling that Singapore is prepared to sacrifice some growth now, in the hope that companies' efforts to transform will bear fruit in future. But it remains a big If, that companies will restructure, and the workforce reskill, quickly enough.

Even if they do so, for Singapore to stay a vibrant economy and society in the long term, that tough conversation about the future of Singapore's foreign talent and manpower policy will still be sorely needed.



For more stories, visit

BT is now on Telegram!

For daily updates on weekdays and specially selected content for the weekend. Subscribe to