New point-based system for EP applicants, including local employment, firm diversity criteria

Singapore

A NEW points-based system will assess Employment Pass (EP) applicants and their employers on a set of 6 criteria, ranging from salary and qualifications to the share of local professionals, managers, executives and technicians (PMETs) in the firm.

"It is designed to be a transparent system, so that businesses have clarity and predictability for manpower planning," said Minister for Manpower Tan See Leng in Parliament on Friday (Mar 4) during his ministry's Committee of Supply debate.

The Complementarity Assessment Framework, or Compass, will apply to new EP applications from Sep 1, 2023, and to new renewal applications from Sep 1, 2024.

Businesses generally welcomed the move, saying that it allows for greater transparency in the EP application system and strikes a balance between supporting the local workforce and allowing companies to hire foreigners to meet their manpower needs.

Said Laure de Panafieu, partner and Asia head of employment and incentives at Linklaters: "The new framework is a welcome change, in that it recognises and seeks to address the fact that employers should be able to bring in and employ overseas talent locally where there is a skills shortage, and by committing employers to developing their local pipeline and a diverse workforce."

With the introduction of Compass, candidates will only be eligible for an EP if they both meet the new qualifying salary benchmarks, and also score sufficient points under the system.

In addition, employers will still have to adhere to existing job advertising requirements under the Fair Consideration Framework.

There are 4 foundational and 2 bonus criteria under Compass. Candidates receive 0, 10, or 20 points for each foundational criteria, and may score an additional 10 or 20 points for the bonus criteria.

A minimum of 40 points is needed to pass. These points may be scored across any of the criteria, with higher scores in some categories being able to make up for lower scores in others.

Two of the foundation criteria relate to individual attributes of candidates: their qualifications, and how their salary compares to those of local PMETs in the sector.

For example, a candidate will score 20 points if their salary is equal to or higher than that of 90 per cent of local PMETs of comparable age in the sector. They will score 10 points if their salary is in 65th to 90th percentile, and 0 points if it is lower than that.

The other 2 are firm-related attributes: the proportion of PMETs in the firm that are of the same nationality as the candidate, and the share of local PMETs in the firm relative to other firms in the sector.

For example, a firm will score 0 points if the candidate's nationality already accounts for more than a quarter of their PMETs.

Tan said the criteria will incentivise firms with a weaker workforce profile to "strengthen their workforce and diversity".

Meanwhile, the bonus criteria are whether the job is on an official "shortage occupation list" - artificial intelligence (AI) developers and cybersecurity specialists, for example - and whether the firm is partnering the government on ambitious innovation or internationalisation activities in line with "strategic economic priorities".

Tan stressed that Compass is "not designed to make it harder for businesses to obtain an EP".

"A good majority of the applications today would not have issues because this demonstrates that our businesses in general are progressive, and our policies thus far have brought in complementary EP holders," he added.

Darius Liu, group chief strategy officer of digital securities exchange ADDX, said the new system is a "welcome step towards greater transparency" as companies can now identify ways to increase their chances of success.

"Previously, companies did not have much information beyond the minimum salary threshold. When applications were rejected, there were also no explanations provided," he added.

One thing to watch is the shortage occupation list, said Liu, and how its roles will be determined. "The government should take a consultative approach in drawing up the list and take into account the ground realities companies face across various industries," he said.

Ang Yuit, vice-president of the Association of Small and Medium Enterprises, said there is a "decent runway" for firms to adjust to the new framework, which he called a more nuanced approach to allowing firms to bring talent in.

Firms with fewer than 25 PMET employees will receive a default 10 points for the 2 firm-related criteria. This will be especially helpful to small and medium-sized enterprises, said Lam Yi Young, chief executive officer of the Singapore Business Federation.

David Kelly, executive director at the British Chamber of Commerce Singapore, said that Compass shows "Singapore's strategy to attract the best foreign talent while ensuring fairness with, and the transference of skills to the local population".

To provide firms with greater transparency, details on Compass will be published on the Ministry of Manpower's website.

The shortage occupation list and the types of government strategic activities will also be made public before the system comes into effect.

Employers will be able to use a pre-assessment tool to get an indicative score for their candidates before submitting an application, and find out which areas they need to work on.