Point system for Employment Pass can signal what market needs: analysts

Singapore

A POINT system that also considers non-salary factors for the approval of Employment Passes (EP) in Singapore could make the process more transparent, and also help to signal what the market needs, industry watchers have told The Business Times.

Walter Theseira, an economist from the Singapore University of Social Sciences, noted that systems that award points for set criteria are already commonly used in other countries for immigration purposes; Singapore also uses a set of criteria to approve various types of immigration passes, such as the one for permanent residency.

"The difference is that the current criteria for approving passes is not public information, except for some basic information such as meeting the income and qualification criteria as set out in the Ministry of Manpower's (MOM) self-assessment tool for employment passes, so employers and applicants have to guess at whether their pass is likely to be approved," he said.

He was weighing in on a new set of recommendations released on Thursday (Oct 21) in a report on how the government can better support professionals, managers and executives (PME).

The 60-page document, prepared by a taskforce comprising representatives from the National Trades Union Congress (NTUC) and the Singapore National Employers Federation, called for measures to enhance workplace fairness and build a strong Singaporean core in the workforce.

Speaking to reporters at a briefing, Patrick Tay, assistant secretary-general of NTUC and co-chair of the PME task force, said salaries have always been the biggest proxy used by the MOM to review applications. The taskforce hopes it can consider factors beyond salary and qualifications.

The taskforce did not provide specifics on how the point system would work. However, it cited examples of factors such as sectoral input, whether the employer has been hiring and developing local workers, and the diversity of nationalities in the company.

OCBC chief economist Selena Ling said such a system would allow for greater differentiation between individuals, firms and industries.

Maybank Kim Eng senior economist Chua Hak Bin said a point system could help provide market signals on the skills that are in high demand and therefore identify the areas suffering from manpower shortages.

DBS senior economist Irvin Seah said making the criteria transparent to companies could enable them to streamline their recruitment process. "This will ensure a more efficient and effective process ... In fact, it will likely result in a higher approval rate," he said.

But this depends on what the criteria are; if they are too stringent, it would make the process of hiring foreigners too onerous, he added.

Singapore Business Federation chief executive officer Lam Yi Young said how well the system can work would depend on the specific criteria and the weightage given to each.

"Businesses' concerns will be whether it will result in a tightening of overall EP numbers and whether it will introduce greater uncertainties in the EP application process," he said.

Assoc Prof Theseira added that there is also concern that a point system would be more bureaucratic, and that employers and applicants could "fall through the cracks".

"Imagine if we had a fast-growing new industry in Singapore that relied on a particular kind of certification or qualification not common here. Would the point-based system be modified in time to allow such employers to hire?" he said.

"This is not so far-fetched, given that some industries like fintech have grown rapidly, and formal qualifications and programmes from established universities were lagging the sector's growth for some time," said Assoc Prof Theseira.

This is why for the system to be effective, industry consultation is critical when it comes to its design, DBS' Seah said.

But even as the point system could potentially take the diversity of nationalities within the company into account, he noted that the authorities would have to consider how to ensure the system complies with assurances of free movement of human capital set out in various free-trade agreements Singapore has with other countries.

As to whether the point system would ultimately lead to a tightening of EPs, Assoc Prof Theseira said: "It all depends on how restrictive the system is designed to be. But I do expect such a system would be implemented precisely to have greater control over the flow and type of EPs, and hence, will be associated with some tightening."

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