Foreign employment growth drops to lowest level in 6 years

IMPACT – MEDIUM

What is the change? Singapore’s foreign employment growth rate has continued to slow in 2015 and is the lowest since 2009, according to a review of the first half of 2015 by the Ministry of Manpower released this week.

What does the change mean? Employers will continue to see a tighter labor environment as a result of the government’s measures to limit the foreign workforce.

• Implementation time frame: Ongoing.
• Visas/permits affected: Employment passes, S passes and work permits.
• Who is affected: All Singaporean companies that employ foreign workers.
• Business impact: The ministry said it intends to follow through on its current policies of tightened immigration standards that have limited the ability of employers to hire foreign workers.

Background: The ministry revealed in its recent Statement on Labour Market Developments that foreign employment grew by only 8,000 in the first half of 2015 – the smallest growth in a half-year period since 2009. The majority of this growth was found in the services sector; however, the greater percentage of new workers are work permit holders instead of more highly skilled work pass holders.

BAL Analysis: The latest drop in foreign employment rates reflects Singapore’s continued emphasis on localization of its workforce and overall tightening of standards for work pass applications. This means that talent shortages will likely continue as authorities have stated that previously announced tightening measures, such as levy increases for S passes and work permits scheduled for 2016, will be implemented as planned.

This alert has been provided by the BAL Global Practice group in Singapore. For additional information, please contact singapore@bal.com.

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