Many people aspire to come to Singapore for work because of the allure of higher pay and a promising career. And while this may bode true for some people in certain professions, it may not be at all the case for everyone who wishes to find work here in Singapore.
As there has been a dropping need for S-Pass workers over the years, considering the Republic’s budget cut on foreign worker quota especially for the service sector, as announced by the government last year, there will be changes as to how relevant companies will proceed from this point out.
Singapore’s Budget Constraint to Mainly Affect Foreign Employees in Service Sector
Minister for Manpower Josephine Teo shared that Singapore’s service sector must make important adjustments by letting go of more foreign workers in the years to come as the sector may not be able to match the kind of pay foreign nationals expect for the jobs being offered in the Republic, as shared in a report by Channel News Asia.
Teo cited that this is one of the main reasons why Singapore is taking steps in the direction of reducing its dependence on foreign workers for this sector.
Based on the Dependency Ratio Ceiling (DRC), which determines the maximum permitted ratio of foreign workers to the total workforce that a company can employ, the data projects a further cut in the service sector.
The reduction will be done in two phases – from the current 40 percent to 35 percent by 2021.
Accordingly, the S-Pass sub-DRC will also be progressively lowered from 15 percent to 10 percent until 2021.
To rationalize the government’s decision, Minister Teo pointed to a growing middle-class in Southeast Asian countries. This trend would lead to the citizens getting a level of pay comparable to what is being paid in Singapore. The situation would only result to many of these potential workforce members declining such service jobs in Singapore.
To allay fears, Teo also pointed that there will be positive outcomes from the adjustment by companies to the DRC cuts such as more sustainable business practices, holistic job redesign and reskilling of local workers to adapt to an increasingly digital future.