It has always been a challenge to find the right balance between allowing businesses to hire foreigners and ensuring that locals get enough opportunities as well. During the 2021 National Day Rally Speech, Prime Minister Lee Hsien Loong announced that they’ll be raising the minimum salary requirement for S Pass and Employment Pass holders’ applications.

Besides just raising the salary requirements, there are more stringent measures in place for employers looking to hire S Pass and EP holders. This ranges from increase the job posting period from a minimum of 15 to 28 days, added scrutiny for employers with a history of discriminatory hiring practices, considering current treatment of local employees, priority in maintaining a bigger local team during retrenchments, and the requirement of dependent pass holders to obtain a work pass to work in Singapore.

The latest 2022 Singapore Budget has revealed that EP holders will have their minimum salary requirement increased from $4,500 to $5,000 a month and a raise from $5,000 to $5,500 for financial sectors. S Pass holders will also have their minimum qualifying salary increased from $2,500 to $3,000 and from $3,000 to $3,500 for financial sectors.

The qualifying salary will be raised again for S Pass holders in 2023 and 2025, the exact amount has yet to be determined. There has also been an increase in tier 1 levy for S pass holders from $330 to $650 by 2025.

For the construction and process sectors who are heavily dependent on work permit holders, the current percentage of foreign workers that companies in these sectors can hire has decreased from 87.5% to 83.3%. More so, the current Man-Year entitlement (MYE) framework will be replaced with a new levy framework that “will encourage firms to support more offsite work and employ more higher-skilled work permit holders”.

FInance Minister Lawrence Wong mentioned that these changes are a calibration rather than an attempt to curb companies from hiring foreigners. When a small technology business owner mentioned his difficulties of hiring local talents amidst the rising demand and competition, his only solution was to hire talent from Indonesia and India who work remotely from their countries.

Mr.Wong then emphasised that these measures are in place not to prevent companies from hiring foreigners but for them to do so under an employment pass.

​​”In fact, we encourage you, go out and hire an employment pass, bring the best from around the world into Singapore and complement your Singapore team so that we can form the best teams in Singapore to create value together,” the Channel News Asia (CNA) quoted Wong as saying.

These changes have definitely impacted businesses as the rise in cost and the tightening of employment pass applications makes it harder for companies to procure talents. May will have to rethink processes and reallocate resources to lessen the impact of these changes. Mr.Wong also commented that having remote workers is definitely more affordable, this pushes companies to be creative and innovative in the way they operate. He also mentioned that these measures are in place to ensure that the foreigners brought in by companies are for the “right calibre and coming in areas where we really need them, in areas of shortages”

However, reallocating resources and rethinking current work processes is not an easy feat. Many rely on such processes for years and to change these practices may result in a lot of effort and time trying to retrain current workers. It is also highly disruptive to the business who may not have the necessary skills and experience to implement such a change. To help adapt to these changes, many turn to the services of professional HR outsourcing companies to assist them.

Talent Spot is one of the leading HR outsourcing companies in Singapore. With over 500 employees in the Asia Pacific region, Talent Spot is a leading Singapore HR agency for recruitment and customised HR solutions. Our trained consultants are niche in their own industry, providing personalised solutions based on your industry and business needs. Highly accustomed to such changes, we are capable of assisting your business adapt in the shortest amount of time to these new policies.

Speak to our industry experts to find out how we can help your company meet your recruitment needs or to adapt to these changes in the shortest amount of time – minimising unnecessary costs. Contact us today!