The COVID-19 crisis has severely crushed global economic growth, and battered the Singapore economy. Singapore’s Growth Domestic Product (GDP) growth forecast for 2020 is expected to come in at “-6.5 to-6 percent”, announced by the Ministry of Trade and Industry (MTI) on 23 November. The gloomy economic outlook, together with global economic uncertainties, not only paint a bleak picture for the local labour market, but also test Singapore’s openness to global talent.
In early August 2020, the Ministry of Manpower (MOM) raised the minimum salary required for new Employment Pass and S Pass applicants. To apply for Employment passes (EPs) for foreign workers, the employer will need to pay them at least S$4,500 per month, which is $600 higher than it was before. In particular, new EP holders in the financial services sector will need to be paid at least $5000 from 1 Dec. These measures are believed to encourage employers to hire more Singaporean workers, cushioning the COVID-19 blow to locals.
That does not mean that Singapore has closed its doors to foreign talent. Singapore’s continued success, as a global business hub, needs global capital and talents. Prime Minister Lee Hsien Loong said earlier in September, “We must be careful not to give the wrong impression that we are now closing up, and no longer welcoming foreigners. Such a reputation would do us great harm.”
Amidst the COVID-19 crisis, Singapore has opened new doors to a special type of tech talent. In mid November, the Economic Development Board (EDB) announced that Singapore is going to launch a new pass called Tech.Pass in January 2021. This aims to attract “founders, leaders and technical experts with experience in established or fast-growing tech companies”. In Prime Minister Lee’s words, these are the “the movers and shakers of the tech world” who can contribute with their capital, networks and knowledge.
This new tech talent pass together with the new required salary criteria for EP and SP applicants will have profound impact on Singapore’s labour market in the short and long run.
Strengthening the Singaporean core
The changes may see Singaporeans taking up more leadership and specialist roles in the future.
Already, with the salary revision criteria for EP and SP applicants over the years, the growth of these pass holders has slowed from an average of 13,000 annually in the first half of the last decade to less than 3,000 annually in the second half, as an MOM report indicates. This is during a period when the economy has been expanding.
With COVID-19, job vacancies become more limited. New measures that tighten work pass requirements will push employers to hire more Singaporeans. In particular, the financial sector may see more Singaporeans hired as middle managers in the future. For the first time, MOM has set a higher qualifying salary bar for a specific sector – the Financial Services sector. Where the minimum qualifying salary for EP had been raised to S$4,500 for all new applicants in all sectors from 1 September 2020, that amount is raised to S$5,000 for the financial sector from 1 December 2020.
In general, the raising salary bar, Jobs Support Scheme (JSS) and the SGUnited Skills Programme work together to incentivise employers to seriously consider giving jobs to Singaporeans in this economic downturn.
The correct mindset is important. In a parliamentary debate on the salary revision for work pass holders, Member of Parliament Mr Patrick Tay, Assistant Secretary-General of the National Trades Union Congress (NTUC), asked for the hiring culture and mindsets to be changed. This means departing from the practice of hiring more Singaporeans at junior levels just to boost the proportion of locals among all employees.
Winning the competition for tech talent
While strengthening its Singaporean core, the government is still in the race for attracting talent. Earlier in 2018, Singapore has set out its vision as a Global-Asia Node of Technology, Innovation, and Enterprise. New knowledge, advanced technology and skill sets are needed to support this vision.
Adapting our labour force to the fast growing fields, such as data science, cybersecurity, artificial intelligence, cloud computing and fintech, becomes imperative. Training, up-skilling and developing our labour force is not a thing that can be accomplished at one stroke. It takes time to improve our overall labour productivity and competitiveness. Furthermore, demand for high-skilled tech workers is higher than the local supply in the short run. In light of these factors, remaining open to global high-skilled workers complements the training of the local workforce in accelerating economic recovery.
The COVID-19 pandemic has disruptive effects on many sectors, such as air transport, tourism-related sectors, food and beverages, outward-oriented manufacturing, and real estate. However, there are some “bright spots” that are not only surviving but thriving – high-tech companies. According to a recent report from The Washington Post, the largest U.S technology companies such as Apple Inc., Amazon.com Inc, Facebook Inc. and Alphabet Inc. have seen their earnings surge due to the increased dependence on their products and services. Video conferencing firm, Zoom seems to be the biggest winner, as its share price soared eight-folds from about US$70 in February to about US$560 in October. Furthermore, “COVID-19 have speeded up the adoption of digital technologies by several years—and that many of these changes could be here for the long haul.”, as stated in a recent survey from Mckinsey. It can be expected that digitisation and innovation brought by technology advance will drive the post-pandemic era.
Given Singapore’s stable political environment, clear rule of law and supportive infrastructures, the key to develop its “digital economy” relies on talent. At the Singapore Tech Forum, Prime Minister Lee acknowledged that even as the local tech talent pool grows, Singapore has to bring in foreign professionals at mid-to-senior levels to mentor young talent and build world-class teams.
Attracting global top-tier tech talent will quickly bring in their capital, advanced technology, experience, networks and know-how. This will build up industries and enterprise capabilities, as well as create more opportunities for Singaporeans.
For example, British technology company Dyson just announced its plan for a new advanced manufacturing hub in Singapore. It will bring in a large amount of new investment and its various facilities to create more job positions and drive technical innovation in the field of energy storage. Talent acquisition is an undoubtedly compelling strategy that helps the country remain competitive globally over the long run.
Additionally, it is worth to take note that countries like Thailand, China and France have already launched their special visa programme to lure tech talent to work there. The one who wins the most tech talents will win an important strategic position in the global business world. Singapore cannot afford to be left behind in such a competition for global tech talent.
Yes, the global economic recovery outlook is bleak. But amidst the gloom, Singapore should expand its pool of tech talent, both local and foreign, in forging a path lit by the sunrise industries. This will boost the economic growth and sustain its competitiveness both in the short run and long run.