Recently, I have seen a number of threads of discussions about the very real possibility of a tightening labour market in Singapore. In a number of these threads, many people, rightfully, are concerned whether there will continue to be good jobs available. The concern is particularly strong amongst those who are just about to start work, those who have children about to start work, and those who are facing the prospect of being laid off. The concerns are very valid, their anxiety is understandable.
However, what is irrational is how some of these people chose to give voice to their anxiety. Not surprisingly, foreign talent (or trash, depending on which comments you read) have been brought out once again as the usual whipping boy. The opinion is that the Fair Consideration Framework (FCF) is insufficient and Singaporeans are still, in some ways, unfairly disadvantaged when it comes to being hired for good quality jobs because of hiring policies by errant employers that discriminates against Singaporeans.
Currently, the FCF stipulates, amongst other things, companies that want to hire foreigners “must advertise the job vacancies on the Jobs Bank administered by the Singapore Workforce Development Agency (WDA).” These advertisements must be open to Singaporeans, comply with the Tripartite Guidelines on Fair Employment Practices, and run for at least 14 days before the company can apply for an Employment Pass (EP).
Is the Fair Consideration Framework Adequate?
There are various arguments about why the FCF is inadequate. Some of these arguments, I think are valid. There is indeed room to see how the FCF can be further enhanced. For instance, there is no reason that a person needs to be of a particular nationality (other than being Singaporean or Singaporean PR) before he can apply for the job. So it is important to step up enforcement to minimise the possibility that a Singaporean is unfairly disadvantaged from being hired for a job in Singapore simply because he is Singaporean.
Many comments and blog posts suggest that given the looming tightening of the labour market, we need to be more aggressive in mandating that companies hire Singaporeans first. Worse, some people even suggest that we mandate that companies can ONLY hire Singaporeans. The people who make such comments and write those blog posts think that doing so will help Singaporeans get coveted PMET jobs. Such thinking is naive.
Why Do Businesses Exist?
To provide jobs for people? To ensure that people can make decent living? If anyone believes that those are the most important reasons why most businesses exist, he should really get his head checked. Businesses are NOT charities. A person who starts a business puts in capital, takes risks, works his ass off. What for? Just so that he can provide jobs for people and not make a decent profit for himself? Maybe there are such saintly people around. How many? Are you? No. Most businesses would consider making healthy and sustainable profits as one of their most, if not the most, primary objectives.
So almost everything that a business does will be related, in some ways, to ensuring decent profits over a long period of time (forever, if possible). These includes HR policies. Even a company like Haidilao (海底捞), well known (in China, at least) for its very generous staff welfare, for treating their staff so well because they hope that their staff, after receiving such great welfare, will work their asses off for the company, will treat customers extremely well, and thus help the company expand and maintain (or better yet, increase) profits.
In other words, simply put, when deciding who to hire, a good business will hire the person who provides the business with the greatest value for money over the long term.
Why Else Do Businesses Set Up Shop in Singapore?
We need to also consider a few other things. Given that the world is now highly globalised, many (large) businesses have the option of setting up operations in many different countries. Why MUST they come to Singapore?
Because Singapore have the best PMETs in the world?
Or is it more likely that they come to Singapore because of a whole host of other benefits that have nothing to do with the quality of our workforce?
I mean… you know… things like the strong rule of law… yes… low crime doesn’t mean no crime, but it’s definitely safer to walk around in most parts of Singapore in the wee hours of the night than say walking around in the wee hours of the night in London, or New York. Or things like the stability of policies… you know… like we won’t say that we give you tax break for ten years now, then renege on that the next day and start charging you exorbitant taxes. Oh and the very good public infrastructure – occasional train breakdowns aside, most of our infrastructure is excellent – our roads are extremely well maintained, we rarely get massive and protracted blackouts, we can drink water straight from the tap, etc etc etc.
MNCs Create Jobs By Being Here in Singapore
For these many reasons, Singapore is (still) very often the first place that comes to mind for many MNCs thinking about setting up regional headquarters for APAC. This is indeed something that we can be very proud of. By being in Singapore, these global businesses and overseas companies generate jobs in our market, either directly by employing Singaporeans, or indirectly by creating businesses for local companies that support these MNCs, and create various other economic benefits for Singapore.
There are some who take issue with the fact that some of these MNCs employ more foreigners than Singaporeans in Singapore. For instance, for about 40% of companies (presumably American companies that have operations in Singapore) that responded to a survey by AmCham (page 29) more than half of their workforce are not Singaporeans. However, do these statistics mean that we ought to mandate that businesses hire Singaporeans over foreigners? What would happen if we do that? Would the MNCs just roll over like cute little puppies and obediently start hiring Singaporeans over foreigners? Or would this force these MNCs to reconsider basing their operations in Singapore, notwithstanding all the other advantages that Singapore has?
And if these MNCs do move out of Singapore to other countries, they will take away whatever jobs for Singaporeans along with all the other economic benefits that they were creating for Singapore.
Thankfully, because Singapore is starting from a position of strength. And because many other countries (particularly our neighbours) have labour policies that are less friendly to employing foreigners than us, there is indeed some room for us to put in place policies that minimise the chances that Singaporeans are unfairly disadvantaged in getting good jobs. In fact, there is probably even room for us to put in place policies to give Singaporeans a slight advantage (i.e. policies that encourage a company to hire a Singaporean even if a Singaporean isn’t the best value for money compared to a foreigner).
But that is only part of the solution.
The other part of the solution should be, I think, about why a company would not want to hire a Singaporean first. Or to frame it in another way:
How can we help Singaporean workers (PMETs or otherwise) become so ‘value’for-money’ that a company (MNC or local) would be extremely stupid to not want to hire Singaporeans first? You know, that they would fight tooth and nail just to secure Singaporean workers?
In order to do this, it would be important to find out from companies where most of their staff (particularly in the PMET and more senior positions) are not Singaporeans. What exactly is it that stops them from automatically wanting to hire Singaporeans first. Find out what it is that businesses find lacking in Singaporean workers that foreigners have that make businesses want to hire a foreigner over Singaporean.
For instance, why weren’t (and aren’t) any senior Singaporean bankers a better candidate than Piyush Gupta (with all due respect to him) to helm our local bank, DBS?
There are of course some usual reasons that will come to mind: Singaporeans aren’t creative enough. Singaporeans aren’t driven enough. Singaporeans lack certain soft skills. All of these may be true. But beyond just anecdotes, I think it would be useful to do a rigorous study to ascertain exactly where and what Singaporean workers are lacking. Why are Singaporean workers being passed over when it comes to choice jobs?
After finding out the areas where Singaporean workers (particularly PMETs) aren’t as strong as foreigners, the next natural question is: What needs to be done?
Again, using DBS as an example, what needs to be done to make sure that Singaporean bankers surpass Piyush Gupta’s level of ability so that when banks (in Singaporean or elsewhere) are looking for CEOs, they will be stupid not to think of hiring a Singaporean first? There are already various things that the government is doing, including (some) changes in education and SkillsFuture.
Can more be done? Definitely.
We Need MINDSET CHANGE
Take education for example. I personally feel that the changes to our education system is too slow and not radical enough. Our teachers are still trying to play catch up. They are still trying to teach kids to fill jobs that, at best, exist today. More likely, teachers are trying to teach kids to fill jobs of the past. They are woefully inadequate at preparing kids to be great at getting jobs of the future.
What can be done? To fully explore that issue will require at least another (or three?) blog posts. But briefly: change the way teachers are trained (send all teachers out for some form of industrial attachment for example), change the structure of schools entirely (let students learn different subjects at their own pace?), and do away with PSLE (gasp! sacred cow butcher alert!)
I also think we should have started on SkillsFuture a lot earlier. But hey, better late than never. My sense is that we can be a lot more aggressive. But it’s early days to decide exactly what more can be done. So let’s see how the various SkillsFuture initiatives are implemented, their effectiveness, how they are further developed and enhanced.
In conclusion, I hope that Singapore will turn the looming threat of tougher economic conditions this year into opportunities to come up with a series of good policies that will help raise the competitiveness of Singaporean workers. With luck, these policies and changes in attitudes and mindsets of Singaporeans, we will ride out this storm even stronger.
Hopefully, one day soon, we will see the day where companies looking to hire people for top quality positions anywhere in the world would think of hiring Singaporeans first.