Companies in Singapore see lasting benefits of hiring locals, but say a fully-local workforce is not possible
SINGAPORE: Companies in Singapore say there are long-term advantages to recruiting locals, but bringing foreigners in may still be necessary to plug gaps in manpower and skills.
The issues of preserving and expanding jobs held by Singaporeans have come under the spotlight in recent months, with labour market conditions worsening significantly due to COVID-19.
Unemployment figures released last week showed that the country's jobless rate had climbed to 4.3 per cent among citizens, 4.1 per cent among residents and 3 per cent overall in July, while retrenchments in the first half of the year hit 11,350 - higher than the 10,120 recorded during the SARS period.
While the Government has said it is reviewing its work pass policies and improving its efforts to clamp down on unfair hiring practices, it added that Singapore cannot turn its back completely on foreign talent.
"We must not undermine what has made us successful, by closing ourselves off from the world," Deputy Prime Minister Heng Swee Keat said during a speech last week, where he emphasised that Singapore must continue to remain open to the world.
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For education providers like the Dyslexia Association of Singapore (DAS), having a large pool of local talent helps the organisation formulate its curriculum and deliver its policies to fit the local context, the organisation’s chief executive Lee Siang said.
These employees, who are Singaporeans or permanent residents (PRs), understand the local culture better than foreigners, he said, like its bilingual and intensive education system.
Locals are also more likely to stay committed either to the job or the industry in Singapore since they are rooted here, he added.
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Collin Ho, the chief executive of SF Group, which runs the chain of Collin’s restaurants, agreed, adding that he has not faced the problem of job-hopping local employees.
On the other hand, foreign employees are vulnerable to sudden quota cuts, which are applicable to work permit and S Pass holders, he said.
Having a pool of local workers is particularly important as the company has plans to expand even amid the weak economic conditions, he said, citing how the company opened two branches in the current quarter and is looking to increase its number of outlets overseas.
As to why the company prefers to bring in a Singaporean or a PR, he said: "Because of the understanding of the local culture, customs, business practices."
“(And) if it’s a Singapore brand going overseas … you want to fly the Singapore flag high overseas,” he added, pointing out that the workers are excited by such prospects.
“They say, ‘wow, I'm not just being posted there but I'm bringing Singapore pride’. (They don’t just) represent our culture, our company, but (also) the Singapore pride that (they) go there with and try to set up the same standards of consistency in service and product," he said.
There are also cost-saving benefits to taking on locals, companies said.
Bottled water manufacturer and supplier Wanin Industries is able to save on accommodation allowances while tapping on hiring subsidies and grants when it takes on someone who is a Singaporean or PR, its head of special projects Eugene Tan said.
Government stimulus measures have been targeting residents as well, added Mr Ho, pointing to wage subsidies under the Jobs Support Scheme and SGUnited jobs initiative.
A skilled local workforce also leads to better economic conditions in the country as this group is often highly paid, leading to higher expenditure levels and a consumption-based economy that is often more sustainable than investment-led economies in developing countries, said ECA International’s regional director of Asia Lee Quane.
About a decade ago, DAS had 10 foreign expatriates on its team overseeing its assessment and therapy programmes. The organisation launched its training arm in 2003.
They were brought in as psychologists and therapists who were also senior management executives, as Singapore then lacked the local expertise in supporting people with dyslexia, Mr Lee said. Three out of six senior management roles were filled by expatriates during this period.
But the organisation “deliberately” groomed the entry-level local employees, he said, such as making a conscious decision to promote them progressively into leadership roles and sponsoring some of them to further their studies on subjects such as the Chinese language or mathematics, so they could come back and run dyslexia programmes in these areas.
“When the staff see that there are professional opportunities in specialised areas they can excel in and possibly lead the industry in, obviously it gives rise to a lot of commitment and morale,” Mr Lee said.
As local expertise in dyslexia developed, the organisation reduced its reliance on foreign expertise. DAS now has about five foreign employees who work in administrative roles and as educational therapists, he said.
All senior management roles - ranging from the chief executive role to the heads of DAS’ various programmes - are currently filled by Singaporeans. The organisation has about 300 full- and part-time employees.
SF Group’s subsidiary Iron Chef F&B, which Collin’s is under, decided to formalise its career development programme last year and work with external vendors to offer its employees courses in areas such as wine appreciation, menu pricing and marketing.
Mr Ho believes that this will help to retain workers and increase their productivity as there is a “sense of engagement” and they see that the company is keen on investing in them, he said.
Being on a “growth trajectory” where Iron Chef F&B is opening a few new restaurants a year also helps to attract local workers, he said, as they believe that they are able to develop their career and rise up the ladder quickly if they joined the firm.
Currently, about 80 per cent of Iron Chef F&B’s employees are locals.
However, Mr Ho acknowledged that attempts to draw locals to join the company mean making sure salaries paid to them are at or slightly above the F&B industry’s average, and making compromises over their rest days.
Some workers may be studying part-time, or are unable to work on weekends because they have to look after their children or attend religious activities, he said.
A HUNDRED PER CENT LOCALS?
In recent months, amid debate about Singapore’s foreign workforce and weak labour conditions due to COVID-19, the term “Singaporean core” has resurfaced as politicians push for employers to prioritise residents over foreigners when it comes to job opportunities.
Economist and associate professor at the Singapore University of Social Sciences Walter Theseira said that it is impossible to think that foreigners are only needed in the short-run “until some mythical transition to an all-Singaporean economy”.
Roles such as construction workers and foreign domestic workers will have to be fulfilled by foreigners unless Singapore wants to redirect labour resources into these fields.
“The question, therefore, is how to accept foreigners in the workforce while protecting Singaporean interests, especially when Singaporeans compete with foreigners for desirable medium to high skill jobs. I think there is no simple answer to this,” said Assoc Prof Theseira, who is also a former nominated member of parliament.
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For some jobs that do not require high levels of skill, it will be easier to ensure that Singaporeans are given priority without disadvantaging businesses.
But in fields where skills are in short supply and stakes are high, businesses will be disadvantaged if they are required to select primarily from a small pool of Singaporeans, he said.
“What we do need to remember is that Singapore's main disadvantage is size. Even if Singaporeans are more capable and better educated on average than those from many other countries, the sheer size of many economies produces more talents,” he said.
Expecting their organisations to run only on locals is difficult, the company's representatives agreed.
“More laborious” jobs that require workers to deliver many tonnes of water supplies and dispensers are disregarded by locals, said Wanin’s Mr Tan.
Mr Lee said that a company “cannot be homogenous” and still needs people with different perspectives.
Foreign expertise will also be necessary to plug some of the skills gaps, he said. For instance, DAS is interested in introducing dyslexia literacy programmes in Malay and Tamil, which means it will most likely have to bring in experts from Indonesia or Tamil Nadu.
One also cannot expect employers to replace foreigners overnight even if a company places its resources on local talent, said NUS Business School’s Department of Strategy and Policy assistant professor Ong Pinchuan.
“Training takes time,” he said. “(And) foreigners tend to have a more international outlook than locals, and firms might be looking for that, especially in their managerial job candidates.”
As for Mr Ho, the F&B industry is one where there is a limited pool of locals who want to take on labour-intensive jobs either in cooking or serving in a restaurant, even in the current economic climate.
“I would say it’s like an employees’ market right now,” he said.