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Foreign Service Sector Workers to be Reduced to 35% by 2021

Working in Singapore has not only given many expats from all over the world  an opportunity to land good jobs and build a career overseas, but also establish a “home” for many years for some.

And because economic tides continually shift every so often, the government has to make certain decisions that would support the majority of its people in the long run.

Gov’t to Reduce Number of Foreign Workers in Services Sector to 35% by 2021

Credits: Josephine Teo FB Page

Expats in Singapore Services Sector at Risk for Losing Jobs due to Lower Worker Quota until 2021

Last February, Finance Minister Heng Swee Keat in his Budget 2019 speech mentioned that as the government looks to enact sustainable measures to support its economy and Singapore nationals in the workforce for the long term, labour changes including the reduction in the foreign worker quota for the services sector, will be put into effect to ensure that Singaporeans will continue to have “good job opportunities,” as shared in a report by Channel News Asia.

Based on the report, the Depedency Ratio Ceiling (DRC), which determines the maximum allowable ratio of foreign workers to the total workforce that a company is allowed to hire, will see a cut for the Service sector in two steps: from 40% to 38% by Jan 1 2020, and then to 35% by 2021.

Of note, the DRCs for various sectors such as in manufacturing (60%), construction (87.5%), process (87.5%) and marine shipyard sectors (77.8%), will remain unchanged.

Furthermore, Mr. Heng pointed out that the growth in the number of S Pass and work permit holders in the service sector has started to pick up by 3% annually or 34,000 only in the past three years.

Owing to the fact that the increase in the number of S Pass holders in the service sector has reached its highest yet in five years, the trend in hiring foreign manpower in this sector could lead to an unsustainable path, Mr. Heng explained.

Heng pointed out that relying more and more on foreign manpower is not the long-term solution to the country’s budget and economic challenges.

Setting a sustainable inflow of foreign manpower to complement the local workforce, as the government focuses on upskilling local talents and building deep enterprise capabilities across all involved sectors are what the government aims to achieve with the changes it looks to put into effect starting this year, but not without sufficient time for businesses to prepare and adjust, Mr. Heng reassures the private sector.

For her part, Minister for Manpower Josephine Teo shared in her Facebook post, that while businesses “may worry,” there will be no change to quotas in other sectors, and the manpower ministry also does not plan to raise foreign worker fees, or impose any changes to the current policy for Employment Pass holders.