Singapore's global hub ambitions: A Compass to guide the workforce
WITH both China and the US projected to grow at a more muted pace in the coming decade, South-east Asia (SEA) is being heralded as the next driver of global economic growth, with a 5.1 per cent gross domestic product (GDP) increase forecast for this year alone. Global multinational companies like Amazon Web Services, Meta, Apple, Google, and Chinese tech companies like Tencent, ByteDance and Alibaba have all identified SEA as key to their international expansion ambitions, eyeing growth markets such as Indonesia and Vietnam. Given our gateway positioning, Singapore has risen with the tide and benefited from an inflow of quality foreign investment and talent, although the trade-offs have been hotly debated, especially in recent years.
In October 2021, Manpower Minister Tan See Leng mentioned that more than a quarter of job vacancies in Singapore have been left unfilled for 6 months or more. Amid this tight labour market, most Singaporeans would agree that remaining open to foreign talent is key to our longer-term survival. However, while allowing the entry of skilled foreign talent makes rational economic sense, it has also inadvertently led to the deepening of 2 overlapping societal fault lines in Singapore - one between the haves and have-nots; and another between Singaporeans and non-Singaporeans. When one hears of more and more tech and new-economy billionaires (often foreigners) buying multi-million-dollar homes in Singapore, one cannot help but wonder if locals are being disadvantaged.
Against this backdrop, the government has been sharpening Singapore's foreign manpower policies, from raising Employment Pass (EP) salary requirements to a more recent announcement of a new scoring system: Compass.
This system complements the EP salary requirement (which is non-negotiable), by allocating points to criteria like an individual's salary and qualifications, as well as recognising the firm's outcomes in ensuring workforce diversity and support for local employment. An additional layer of bonus criteria pertains to Singapore's sector and national priorities, such as skills shortages (at the national level) and whether the firms meet/contribute to certain strategic economic imperatives such as innovation and internationalisation.
A Compass for Singapore, a gateway for the world
When it comes to foreign work pass policies, different markets face unique manpower challenges and there is no one-size-fits-all strategy.
Let's take Australia's points system as an example - the foreign talent must express interest first, before being invited to apply. The process is arguably more stringent, with restrictions also placed on age. Whereas for Singapore, the first key determinant is the market test, for example whether there is a willing employer to hire the talent based on a certain minimum salary. In addition, Compass allows for those who are weaker in one criterion to compensate by scoring well for another factor - no yardstick is privileged over another. Most importantly, the transparency of the Compass allows businesses to have certainty and an understanding of the priorities of the Singapore government in building a dynamic economy and an inclusive society around a Singaporean core. In a way, I see this transparency as an invitation to businesses to build this vision together. This is also consistent with the new compact between the government and the citizens (and businesses) that Finance Minister Lawrence Wong emphasised in the recent Budget debate.
Looking ahead, holding our own
Compass stands out on 3 fronts: flexibility, transparency and coherence to the new Singapore compact that is emerging with the 4G government.
However, no system is perfect. For example, talents whose salaries are higher than the 90th percentile and are hired in an industry with a shortage of talent will meet the Ministry of Manpower's overall entry requirement. This means employers can disregard the other criteria like diversity, qualifications, and ratio of foreign to local PMETs (professional, managerial, executive and technical) and bring in the talent. Without a quota in the Compass system (as should be the case), how this might lead to a higher (and hence more controversial) concentration of foreigners in certain sectors/firms and deepen the abovementioned fault lines remains to be seen.
The hiring landscape in Singapore is ever changing, so I expect the foreign manpower policies to be constantly reviewed and updated. Even as we look forward to putting the woes of the pandemic behind us, future-proofing Singaporeans' livelihood continues to be critical especially as Singapore aspires to continue to compete on the world stage.
A flexible foreign work pass framework is just one key plank in building an effective workforce in Singapore. I have written elsewhere on how we must also transform our local workforce by making concrete steps towards building a skills-based economy. I applaud initiatives such as National Jobs Council's partnership with LinkedIn to launch The Skills Path initiative that matches job applicants based on their skills instead of only traditional qualifications, as they set a precedent for skills-based hiring. Such pathfinding programmes can only bode well in changing employees' mindsets towards lifelong skills acquisition, as this is the key to being constantly relevant to the dynamic job market.
Balancing between attracting foreign talent and developing a skilled local workforce is not easy, but the past year has shown that we can make calibrated adjustments in the right direction. With the recent relaxation of the Safe Management Measures and Vaccinated Travel Lane measures signalling the light at the end of the proverbial Covid tunnel, these progressive changes in our foreign work pass polices aim to announce to the world that Singapore is, once again, open for business and ready to compete with the best in the world.
The writer is a partner of Heidrick & Struggles Singapore.
