Singapore - Firms likely to retain foreign workers despite new salary criteria

Companies Channel NewsAsia spoke with said they are likely to retain skilled, professional foreign workers, despite the new salary criteria that will kick in next year.

They said Employment Pass (E-Pass) holders who have been well-trained will be an asset to the company, even though these workers would cost more with the higher qualifying salaries next year.

However, industry players said that some employers may try to circumvent the new rulings.

Industry players said companies are not rushing to bring forward the recruitment of E-Pass holders before the new rulings take effect.

This is despite wage costs going up, possibly by as much as 3 to 4 per cent, according to some businesses.

Mr Lawrence Leow, president of the Association of Small & Medium Enterprises, said: "Companies will likely continue to renew their existing E-Pass holders because they are well-trained and I don't think they want to lose them."

The tighter E-Pass rules are aimed at ensuring that local workers are not disadvantaged compared with a foreign worker who may be cheaper to employ.

About 30,000 E-Pass holders are likely to be affected by the changes when their passes are up for renewal.

Despite authorities trying to level the playing field, employers said they still have problems placing local workers in some jobs.

Mr Leow said: "Singaporean workers are not going to be (paid) anything lower than foreign workers even with the increase (in qualifying salaries). In my view, it's not likely to happen. The foreigner will continue to be a substitute to the Singaporean workforce and not the other way round."

To beat the higher cost in hiring skilled foreign talent, Channel NewsAsia understands that some companies are switching E-Pass holders to an S-Pass, which has a lower salary requirement.

Ms Dora Hoan, group CEO of Best World International, said: "Let's say they're not worth S$3,000 (minimum salary for the lowest rung of Employment Passes), and we can't pay, maybe we can change them from an E-Pass to S-Pass."

Mr Ronald Lee, managing director of Primestaff Management Services, said: "This is a loophole....where organisations then may save some money. However, there's a need to note that for S-Pass there is a 25 per cent dependency ratio, which means that the company needs to have at least three locals to hire one S-Pass and also there is an annual levy payable for S-Pass."

The government has said that the changes to the E-Pass salaries will not be the last round of adjustments.

As local salaries move up, requirements for E-Pass holders will be tightened further.

- CNA/cc


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