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IMPACT – LOW
What is the change? The Ministry of Manpower has announced a temporary program to give small- and medium-sized companies some flexibility in their foreign workforce if they restructure and strengthen their core of Singaporean workers.
What does the change mean? The government is continuing its efforts to encourage all employers to develop a strong core of Singaporean workers and is providing tools for small- and medium-sized enterprises (SMEs) to adjust to the tight labor market.
Background: The ministry announced the Lean Enterprise Development (LED) Scheme as a two-year initiative to help SMEs increase productivity and innovation, and use a leaner workforce in the face of local manpower and skills shortages. The scheme focuses on giving SMEs tools to achieve the necessary restructuring and skills training. The goal is to create business growth and better job opportunities and careers to Singaporeans.
The scheme’s temporary foreign manpower adjustments include the following:
Any transitional adjustments allowed will be reviewed on a yearly basis and will be renewable for a maximum of three years.
BAL Analysis: The scheme is a temporary measure and does not change the quotas or ratios required of companies employing foreign workers. Singapore continues to promote localization of its workforce, evidenced by recent data indicating a steep drop in the growth rate of employment of foreign workers. The LED Scheme is the latest in the government’s overall campaign to bolster training and skills acquisition by Singapore’s citizens in order to address current and future projections of manpower and skills shortages.
This alert has been provided by the BAL Global Practice group in Singapore. For additional information, please contact singapore@bal.com.
Copyright © 2016 Berry Appleman & Leiden LLP. All rights reserved. Reprinting or digital redistribution to the public is permitted only with the express written permission of Berry Appleman & Leiden LLP. For inquiries please contact copyright@bal.com.
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