facebookForeign Talent NDR 2022: Is Importing More High-Quality Foreign Talent to Singapore a Good Idea?

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230822 foreign talent singapore debate

Foreign Talent NDR 2022: Is Importing More High-Quality Foreign Talent to Singapore a Good Idea?

profileJoel Koh

At Sunday’s (21 Aug 2022) National Day Rally speech, Prime Minister Lee Hsien Loong announced that the Ministry of Manpower (MOM), Ministry of Trade and Industry (MTI) and economic agencies will implement new initiatives to attract and retain high-quality foreign talent in Singapore, stating that:

‘We want to make top talent everywhere sit up, pay attention, and think seriously about coming to Singapore,’ adding that ‘Singapore must build a world-class talent pool because this is an age where talent makes all the difference to a nation’s success.’

Source: Prime Minister’s Office

Prime Minister (PM) Lee added that these initiatives are necessary to secure Singapore’s future success in a post-COVID-19 world.

Should Singaporeans be concerned?

Here’s all you need to know!


The Need for a World-class Talent Pool of Foreign Workers in Singapore

At the rally, PM Lee stated that although Singapore has many schemes to attract quality foreign talent in sectors like technology, more needs to be done to attract foreign talents in promising sectors.

He added that Singapore ‘must build a world-class talent pool because this is an age where talent makes all the difference to a nation’s success as when ‘it comes to top talent, we can never have enough”.

Thus as a country, PM Lee stated that Singapore needs to ‘focus on attracting and retaining top talent, in the same way, we focus on attracting and retaining investments.’

Although this does not mean that the locals are neglected, as he added that ‘Singapore does its utmost to develop its own talent and help every citizen reach their fullest potential.

He then highlighted that other advanced economies like Germany and Britain are rolling out the red carpet to attract the best foreign talent through initiatives like introducing special visas for graduates from the best universities in the world.

An example would be Britain’s new visa scheme for graduates from the top 50 non-UK universities.

The High Potential Individual (HPI) visa is now open for application, and this scheme offers visas to people who completed a degree from top universities outside the UK within the last five years.

In the latest Times Higher Education world ranking, the National University of Singapore (NUS) was placed 21, while National Technological University was placed 46,

Both universities are included in the British Home Office’s Top Global Universities list.

If you’re one of those who are qualified, this is a good opportunity if you’re thinking of switching jobs soon or have been wanting to work and live overseas (not the UK in particular).

But, you do need to keep an eye on how much you need to work and live in the United Kingdom (U.K.):

PM Lee then drove home the point that ‘in this global contest for talent, Singapore cannot afford to be creamed off or left behind.’

Expats Leaving Singapore: What Percentage of Singapore Is Foreigner?

According to the latest stats from Population.Gov, a publication from the Prime Minister’s Office Strategy Group, Singapore has a population of 5.45 million as of June 2021.

Near the start of the COVID-19 pandemic, Singapore’s population dropped by 4.1 per cent from June 2020 to June 2021, which was mainly due to the reduction of the non-resident population.

Source: Population,Gov | Chart 1: Total Population by residency status, as of June 2021

In addition, during the same time period, the Singapore Citizen (SC) and Singapore Permanent Resident (SPR) population decreased by 0.7 per cent (3.52 million to 3.50 million) and 6.2 per cent (0.52 million to 0.49 million), respectively.

This was largely due to the fact that most SCs and SPRs were staying overseas continuously for 12 months or more due to COVID-19 travel restrictions and were not included in Singapore’s population count.

More strikingly, the non-resident population decreased by 10.7 per cent, to 1.47 million as of June 2021.

Population.Gov suggests that this decrease in ‘foreign employment in Singapore from June 2020 to June 2021 due to travel restrictions and uncertain economic conditions’ and that ‘the decrease was seen across all pass types, with the largest drop in Work Permit Holders in the Construction, Marine Shipyard, and Process sectors’ as seen in the chart below:

Source:
Population.Gov | Foreign Employment Growth, as of June 2021v

 

In other words, we saw a substantial decrease in the number of non-residents/foreigners in Singapore during the pandemic.

Is It Necessary To Have Foreign Workers in Singapore? Why Is Singapore Dependent on Foreign Workers?

With the number of foreigners dropping, you might think that it is beneficial for Singapore.

But, losing foreign talent has a downside, as foreign talent can help facilitate Singapore’s economic growth and contribute tax revenue to Singapore’s reserves which were drained recently to fight the ill effects of the COVID-19 pandemic.

For context, here’s a little history lesson about the term foreign talent in Singapore from the Institute of Policy Studies (IPS).

The label ‘foreign talent was first conceived and brought up in parliament on 28 June 1988 when the then Minister for Home Affairs S. Jayakumar announced to the public its intentions to bring in ‘foreign talents’ to supplement the local workforce.

This label was originally attached to the Eminent Entrepreneurs/Professionals Scheme which granted 81 professionals from Hong Kong SPR status.

Later, this label was extended to cover highly calibre and trained workers from around the globe who would strengthen Singapore’s economy with their skills, enterprise and drive.

Arguably, foreign talent supplanting Singapore’s local workforce has been a key contributor to its economic success story since it became independent in 1965.

Why else do we need foreign talent?

Well, I can think of two more reasons.

Singapore Population and Fertility Rate

The fact of the matter is that Singapore’s local population is shrinking.

Singapore’s resident total fertility rate (TFR) has been declining steadily and is at 1.12 in 2021:

Source: SingStat

This is way below the 2.1 TFR needed for a population to sustain itself.

As a result, Singapore’s pool of available manpower will shrink, which means that there might not be enough Singaporeans with the relevant skills to meet the broadening and growing needs of companies.

Thus, foreign talent is needed to supplant the local population.

Singapore’s Age Dependency Ratio / Old Age Support Ratio

Another related reason is Singapore’s decreasing age dependency ratio or old-age support ratio.

According to SingStat, the age dependency ratio or old-age support ratio refers to ‘the number of people who are capable of providing economic support to the number of older people who may be dependent on others’ support’ and is ‘computed as the ratio of the working-age population (e.g. aged 20-64 years) per person aged 65 years and over in Singapore.

From 1990 to 2021, Singapore’s old age support ratio has fallen from 10.5 to 4.0:

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This steady decrease could be attributed to factors like rising life expectancy and Singapore’s falling TFR, as mentioned above.

This puts more pressure on the working adult population as there are fewer working adults to support the seniors.

This could be solved by importing more foreign talent, which will increase the old-age support ratio.

These population challenges mean that Singapore might need more foreign talent to supplant the resident workforce.

If there is a lack of skilled manpower available, companies might choose to relocate overseas and take their business elsewhere, which may lead to fewer jobs in Singapore for residents.

Granted, there needs to be a focus on importing foreign talent of the right calibre who have the relevant entrepreneurial, technical knowledge and business expansion skills.

Job Opportunities in Singapore for Foreigners

Speaking of attracting foreign talent, PM Lee mentioned that ‘Singapore has a window of opportunity to draw the best talent now, with its track record of tackling Covid-19 helping it to stand out even more’ and that ‘our trusted Singapore brand of quality, reliability and efficiency… gives us a competitive edge.’

He added that ‘those with special talents and skills are looking for places to move to, where they and their families feel safe and welcome, and where they can make an impact,’ and that businesses want to invest in places where the talent is… where the politics and policies are stable, and where the system works.’

Arguably, Singapore has done well to attract global companies and high-quality foreign talent to settle here.

For example, he cited how BioNTech, one of the leading vaccine developers, was setting up its regional headquarter and manufacturing site in Singapore.

Singapore also has other schemes like the Global Investor Programme (GIP Scheme), which grants SPR status to entrepreneurs and investors who ‘intend to drive their businesses and investment growth from Singapore.’ There is also the TechPass visa that allows established tech entrepreneurs, leaders or technical experts from around the world to come to Singapore to perform frontier and disruptive innovations. 500 such visas will be issued each year.

In addition, Singapore will implement a new points-based visa system entitled the Complementarity Assessment Framework (COMPASS). This system, according to MOM, ‘enables employers to select high-quality foreign professionals while improving workforce diversity and building a strong Singaporean core. It is a transparent system that gives businesses greater clarity and certainty for manpower planning.’

Concerns About a Large Number of Non-residents Living and Working in Singapore

PM Lee also addressed the elephant in the room and recognised the concerns Singaporeans have about the impact of a substantial amount of foreigners living and working in Singapore.

He added that the Government is following through on these concerns. But, he added that ‘while we manage the overall population of foreign professionals here, we must not stop seeking out top talent who can contribute to our Singapore Story.’

Namely, the overhaul to Singapore’s visa framework underscores how the government of Prime Minister Lee Hsien Loong is seeking to bolster local employment and industries while addressing public concerns that international firms in Singapore favour hiring foreigners. Notably, the announcement of COMPASS comes on the heels of recent minimum salary increases for foreign workers and tightened quotas for some middle-tier positions implemented by Singapore’s Ministry of Manpower (MOM).

Furthermore, a Fair Consideration Framework has already been implemented by MOM to ensure that Singaporeans are considered for jobs fairly before foreign talent is hired. This scheme is good but could be improved with a focus on enforcement.

Singaporeans should also acknowledge that with the COVID-19 pandemic and the rise of remote jobs, the local jobs market is becoming a global jobs market.

We need to be constantly upgrading our skills to stay competitive.

But, it is not all doom and gloom for Singapore. Tax regulations governing remote workers mean that companies would continue hiring workers in the country. Singapore’s competitive advantage to attract businesses that provide Singaporeans jobs should not be eroded too much.

One more thing.

Source: Giphy

There still exists a foreigner-Singaporean divide that Today pointed out in their article, which ‘often stems from a lack of integration among Singaporeans and foreigners in everyday life.’

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About Joel Koh
History student turned writer at Seedly. Before you ask, not a teacher. I hope to help people make better financial decisions and not let money control them.
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