Employment Pass quotas – good or bad?

The latest Ministry of Manpower's Labour Market Report 2015, which revealed that local employment growth was a mere 100 (compared to foreign employment growth of 31,600), fueled unhappiness among some Singaporeans that companies have been able to bring in foreigners en masse for managerial and executive jobs without considering if Singaporeans could have filled the jobs in the first place.

As a response to the Labour Market Report, the Director of NTUC's PME Unit, Patrick Tay, lobbied for the government to consider a PME Dependency Ratio for Employment Pass holders. He emphasised that this ratio should apply for companies with two "weaks": a weak Singaporean core and a weak commitment to nurturing one.

https://www.facebook.com/notes/patrick-tay/speech-at-parliamentary-debate-on-presidents-address-by-patrick-tay-fighting-for/937720389596376

Shortly after, his suggestion was opposed by business leaders from the SNEF and SBF, who said that "current measures such as the Fair Consideration Framework are adequate when dealing with discriminatory employment practices".

If the government decides to implement a dependency ratio for Employment Passes, will this hurt Singapore's reputation as a meritocratic society and cause us to lose our competitive edge?

Targeting double "weak" companies

Policymakers fear that creating too many regulations stifles a free market economy, and implementing "protectionist" laws may make the local workforce take their jobs for granted. Their fear is compounded by witnessing the stagnation of human capital across the Causeway due to their neighbour's protectionist bumiputera policy and corruption.

But we should be reminded that the PME dependency ratio which Tay proposed is not meant to be a blanket policy across all industries. It is meant for "black sheep" companies which do not care for giving Singaporean workers a fair chance based on meritocracy, and do not want to consider the sustainability of the nation that generously gave them a stable economic climate to do business in.

Competitiveness should not be compromised

We should acknowledge that Singapore has constraints that many other countries do not. Land and resources are scarce, hence, the nation pins its hopes on its resident labour force to survive, with the governing principle of meritocracy once described by Emeritus Senior Minister Goh Chok Tong as a "value system by which advancement in society is based on an individual’s ability, performance, and achievement".

A PME Dependency Ratio for specific sectors with a weak Singaporean core, coupled with SkillsFuture and the Fair Consideration Framework, not only aims to ensure that Singaporeans are able to get good jobs in these sectors, but that companies are also able to hire and groom good Singaporean workers to help their business grow.

Singapore’s manpower regulations cannot be overly strict till it hinders the majority of companies from hiring talented foreigners who are able to contribute to our economy. There should be a balance between "protectionist" laws and freedom to allow businesses to choose their staff based on meritocracy.

Optimising the local and foreign workforce

Singapore's competitiveness doesn't only depend on how many good companies the Ministry of Trade and Industry can attract to Singapore. It also depends on the opportunities that Singaporeans have to earn and learn, which depends on how serious companies are about grooming a Singaporean core as a reliable source of talent.

Companies which are too reliant on foreigners as a source of labour cannot be competitive in Singapore in the long term. They will either have to move out to countries with cheaper labour, or find ways to attract local talent. HR has to think of ways to optimise their workforce because salary costs are going up, but productivity is still stagnant and the global economic outlook is uncertain.

In the end, companies will still need to focus on their Singaporean core of workers if they want to do business here for the long term.