There is an increased in quota for S-pass foreign workers as well as relaxation of rules for Personalised Employment Pass (PEP) – people who earn at least S$7000 by the Manpower Ministry.

This effectively means that companies are now about to hire more foreign talents if they are not able to hire any locals for the job. In turn, this means that if the ratio of foreign talents to locals in their company is less than 1:4, they have the option of looking overseas for potential job-seekers.

While this means they have to pay the foreigners at least S$1800 (because it’s an S-pass), they will not suffer a labour crunch then they (i) can’t find people here and (ii) meet the 1:4 ratio requirement.

However, because of the S$1800 minimum salary requirement, it is unclear how this will affect the dynamics of hiring a foreign talent, though it has always been considered cheaper to do so.

In addition, the rules for PEP has also been relaxed. This means that for anyone who earns at least S$7000, he can apply for a 6 months PEP to look for job here, as opposed to confirming a job offer here before applying for a pass. This system is somewhat similar to that of Australia, where you typically apply for PR before you can get employed.

The next question is – how this will affect the salary that a Singaporean gets nowadays.

COMPANIES hungry for workers cheered yesterday when the Government announced that they can soon hire more foreign workers.

They can do so at all levels but a bigger chunk of these extra workers looks set to be mid-level skilled workers, or S-pass holders, due to strong industry demand.

This is because these workers can form up to 25 per cent of a company’s total workforce, a jump from the current 15 per cent. An S-pass worker, who is a notch above a work permit holder, must earn at least $1,800 a month.

The changes in the various industries’ dependency ratios – which is the number of foreigners a company can employ relative to its local employees – will take effect in January.

They were announced by Manpower Minister Ng Eng Hen last night at the Ernst and Young Entrepreneur of the Year event, at which logistics firm YCH Group’s chairman and chief executive, Mr Robert Yap, won the title.

In applauding the changes, the Singapore National Employers Federation, said: ‘They are a very welcome, very timely and very significant response from the Government.’

Its executive director, Mr Koh Juan Kiat, also said that potentially, the 10 percentage point increase in S-pass holders may see between 50,000 and 100,000 workers coming in.

Employers have recently called for the foreign worker quota to be raised. Faced with a buoyant economy, many struggle to fill job vacancies.

It was a situation not lost on Dr Ng.

He said that to succeed as an ‘economy built on high innovation and value addedness’, relying on talent in Singapore is not enough.

There is a limit to the growth of Singapore’s resident labour force, he said, referring to a workforce that includes permanent residents as well. It eased off to just 2 per cent this year.

At the same time, unemployment is at a 10-year low – 1.7 per cent in September.

Dr Ng also noted a crucial condition that helped Singapore become the world’s most competitive labour market this year. This factor is that companies here have access to the manpower they need.

Hence, the introduction of the measures to ensure such access continues.

But with the higher proportion of S-pass holders being allowed in, the Manpower Ministry is hoping companies will use it to improve the quality of their foreign workforce.

Contractors look set to do so. Mr Simon Lee, executive director of the Singapore Contractors Association, said the new S-pass quota comes in handy because contractors would need more skilled supervisors to lead bigger groups of workers, as building activities at a few major projects are expected to intensify from mid-2008.

However, Mr Kellvin Ong, Rendezvous Hotel’s general manager, cautioned: ‘We also have to be mindful of the bottomline. S-pass workers have to be paid a minimum salary.’

Citigroup economist Chua Hak Bin said that in sectors like construction, allowing more foreign workers will mitigate labour costs and ‘more importantly, the greater risk of project delays due to a shortage of workers.’

Besides the quota changes, the Manpower Ministry is also removing the two-year requirement for higher-paid workers eyeing a personalised employment pass (PEP).

This pass, introduced this year, lets them remain here for up to six months in between jobs. Currently, those earning at least $7,000 a month must work here for at least two years before they can apply for a PEP.

But from March 1 next year, those whose last-drawn fixed salary abroad is $7,000 a month can apply straightaway for the PEP.

Article obtained from on 29th November 2007

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