SINGAPORE: The COVID-19 crisis has crushed global economic growth and battered the Singapore economy. Singapore’s Growth Domestic Product (GDP) growth forecast for 2020 is expected to come in at “-6.5 to-6 per cent”, announced by the Ministry of Trade and Industry (MTI) on Nov 23.
The gloomy economic outlook, coupled with global economic uncertainties, not only paints a bleak picture for the local labour market but also tests Singapore’s openness to global talent.
To encourage employers to hire more Singaporean workers, the Ministry of Manpower (MOM) raised the minimum salary required for new Employment Pass (EP) and S Pass (SP) applicants in early August.
To qualify for EPs for foreign workers, the job must pay at least S$4,500 per month, which is $600 higher than it was before. That figure is S$5,000 for the financial services from Dec 1 onwards.
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NOT CLOSED TO TALENT
That does not mean Singapore has closed its doors to foreign talent. Indeed, Singapore’s continued success, as a global business hub, is conditional on access to both global capital and talent.
Tackling these concerns in September, Prime Minister Lee Hsien Loong said: “We must be careful not to give the wrong impression that we are now closing up, and no longer welcoming foreigners. Such a reputation would do us great harm.”
In fact, if anything else, Singapore’s foreign talent policy has focused on attracting top-tier talent to seize new opportunities in an increasingly digital world.
Singapore has opened up doors to a special type of talent. In mid-November, the Economic Development Board (EDB) launched Tech.Pass in January 2021.
The scheme aims to attract “founders, leaders and technical experts with experience in established or fast-growing tech companies”.
In Prime Minister Lee’s words, these are the “the movers and shakers of the tech world” who can contribute their capital, networks and knowledge.
But the implications of such a shift go beyond hiring of more foreign talent. Tech.Pass, together with the new salary criteria for EP and SP applicants, will have profound impact on Singapore’s labour market.
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STRENGTHENING THE SINGAPOREAN CORE
For one, the changes may see Singaporeans taking up more leadership and specialist roles in the future across different sectors, especially in banking and finance services as well as information and communications technology.
Already, with the tightening of criteria for EP and SP applicants over the years, growth of these pass holders has slowed from an annual average of 13,000 in the first half of the last decade to less than 3,000 in the second half, according to an Aug 27 MOM statement. This was during a period of economic expansion.
With COVID-19, competition for job vacancies have intensified. New measures tightening work pass requirements will push employers to hire more Singaporeans.
Interestingly, for the first time, MOM has set a higher qualifying salary bar for a specific sector – the financial services sector. That may lead to finance firms hiring more Singaporeans as middle managers and specialists.
Under a talent development programme supported by the Monetary Authroity of Singapore (MAS), 50 financial institutes will hire 900 Singaporeans in the next three years. They will be groomed for leadership and specialist roles.
Between 2015 and 2019, three out of four jobs created in the finance sector went to locals. With the growing industry and the higher minimum EP salary, more mid-level jobs will be created and available to locals.
Besides the higher bar for EP and SP applications, the Government also launched Jobs Support Scheme (JSS) to help companies to retain their local employees in this economic downturn.
But employers’ attitudes are also important. In a parliamentary debate on the salary revision for work pass holders, Member of Parliament Mr Patrick Tay, Assistant Secretary-General of the National Trades Union Congress (NTUC), encouraged employers to change their mindsets about hiring locals.
This requires departing from the practice of hiring more Singaporeans at junior levels just to boost the proportion of locals among all employees.
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THE RACE TO ATTRACT TALENT
While strengthening the Singaporean core, the Government is still in the race for attracting talent.
Earlier in 2018, Singapore set out its vision as a Global-Asia Node of Technology, Innovation, and Enterprise. New knowledge, advanced technology and skill sets are needed to support this vision.
Adapting our labour force to the fast growing fields, such as data science, cybersecurity, artificial intelligence, cloud computing and fintech is imperative.
Training, up-skilling and developing our labour force cannot be accomplished in one stroke and will require time to improve our overall labour productivity and competitiveness.
Furthermore, demand for high-skilled tech workers is higher than the local supply in the short run.
According to recruitment consultancy Michael Page, the demand for technology jobs in Singapore rose by 20 per cent over 2018 to 2019, especially in the field of e-commerce, digital marketing and data science. But a shortage of jobseekers pushed up the salary of a typical specialist to $9,600 per month.
In light of these factors, remaining open to global high-skilled workers complements the training of the local workforce in accelerating economic recovery.
THE RISE OF THE DIGITAL ECONOMY
The COVID-19 pandemic has disruptive effects on many sectors, such as air transport, tourism-related sectors, food and beverages, externally oriented manufacturing, and real estate.
However, there are some “bright spots” – namely, high-tech companies.
According to an Aug 2 report from The Washington Post, the largest US technology companies such as Apple, Amazon, Facebook and Alphabet have seen their earnings surge due to the increased dependence on their products and services.
Video conferencing firm, Zoom seems to be the biggest winner, as its share price soared eight-fold from about US$70 in February to about US$560 in October.
The stock market rally confirms what we already know: That tech companies are not only performing well but also have the potential for future gains.
A McKinsey survey of executives worldwide found companies have sped up the digitisation of their operations by three to four years. Innovation brought about by widespread technology adoption can be expected to drive the post-pandemic era.
WINNING THE COMPETITION FOR GLOBAL TECH TALENT
Given Singapore’s stable political environment, clear rule of law and supportive infrastructures, the key to developing its “digital economy” is talent.
At the Singapore Tech Forum on Nov 17, Prime Minister Lee acknowledged that even as the local tech talent pool grows, Singapore has to bring in foreign professionals at mid-to-senior levels to mentor young talent and build world-class teams.
Attracting global top-tier tech talent will quickly bring in their capital, advanced technology, networks and know-how. This will build up industries and enterprise capabilities, as well as create more opportunities for Singaporeans.
For example, British technology company Dyson announced on Nov 27 its plan for a new advanced manufacturing hub in Singapore, as part of its S$4.93 billion investment to expand operations in Singapore, United Kingdom and the Philippines.
Dyson had already signalled its intent to make Singapore a base of its operations, with its global head office at St James Power Station opening in 2021.
It is expected to expand research and development facilities in Singapore to study areas like machine learning and robotics. This will lead to the creation of more engineering and research scientist jobs, and the need for global tech talents and middle managers to plug gaps in the field.
Meanwhile, Dyson intends to establish research projects with Singaporean universities to develop new products. Such programmes could go towards cultivating local students as future engineers and entrepreneurs.
Talent acquisition is an undoubtedly compelling strategy that can help Singapore remain competitive globally over the long term.
It’s worth noting that countries like Thailand, China and France have already launched their special visa programme to lure tech talent to work there.
The countries who win the best tech talent will gain a strategic position in the global business landscape. Singapore cannot afford to be left behind.
Xu Le is a lecturer in the Department of Strategy and Policy at National University of Singapore (NUS) Business School.The opinions expressed are those of the writer and do not represent the views and opinions of NUS.