Tighter foreign worker quotas in services sector ‘necessary’ to sustain restructuring, says Zaqy Mohamad
SINGAPORE: Having tighter quotas to calibrate foreign manpower inflows into the local services sector is “necessary” to sustain ongoing restructuring efforts, said Minister of State for Manpower Zaqy Mohamad on Wednesday (Feb 27) as he joined in the debate on the Government’s recent announcement.
By keeping a tight labour market, employers will be incentivised to redesign and transform jobs, as well as invest in training. This will mean better employment opportunities for Singaporeans, he said on the second day of the Budget debate in Parliament.
Mr Zaqy’s remarks came after several Members of Parliament (MPs) on the first day of the debate raised concerns about the reduction in foreign worker quotas for the services sector.
They had questioned if the newly announced move to cut both the Dependency Ratio Ceiling (DRC) – which sets out the maximum permitted ratio of foreign workers to the total workforce that a company is allowed to hire – and the S Pass Sub-DRC will, among other things, worsen the labour crunch and raise costs for businesses.
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While he acknowledged these concerns, Mr Zaqy said that businesses “must start somewhere” to build deep enterprise and human capabilities so as to remain competitive.
“This is why we chose to reduce the DRC as opposed to simply raising levies. We did not want a situation where firms continue using existing operating models and simply pay higher levy costs.”
With a lower DRC, he explained that firms will have to either hire more locals or transform into leaner businesses.
Mr Zaqy also noted that there are many Singaporeans working in the services sector.
“We should avoid reinforcing the view that these are jobs that only foreigners who want to take up. I think there are good jobs for our Singaporean workers.”
But to attract and retain local workers, Mr Zaqy urged employers to pay more attention to job redesign, skills upgrading and flexible work arrangements.
While it is important to assure businesses that Singapore remains open to foreign talent as it restructures, the country’s short-term needs must not become a long-term dependency and “risk hurting local employment outcomes”.
That is why the Government is also closely monitoring its Employment Pass (EP) policy, which it did not adjust this time round as effects from prior tweaks made in 2017 continue to be felt now.
“But we will continue to monitor this closely. As local wages rise, we will have to adjust the EP criteria from time to time," said Mr Zaqy.
Nevertheless, help such as the Lean Enterprise Development (LED) scheme, is on hand for businesses to navigate the challenging restructuring journey.
The Government is also aware that essential sectors, such as healthcare, will need to ensure day-to-day operations are not affected as firms adjust to the new quotas.
Tanjong Pagar GRC MP Joan Pereira, for one, said on Wednesday that the new manpower adjustments could hit the “labour-intensive” care-giving sector, with a “major impact” on the country's elderly.
On that, Mr Zaqy said healthcare providers will be provided with “manpower flexibilities” so that their day-to-day operations will not be affected.
He stressed that the Government wants a “win-win” outcome for both workers and employers.
“We want our companies to transform so that they can grow in a sustainable manner and create quality jobs," said Mr Zaqy, who is also MP for Chua Chu Kang GRC.
“We want our workers, on the other hand, to be able access these opportunities - quality jobs, good salaries – and participate in Singapore’s economic growth."