Around 20 per cent of firms in Singapore are foreign-owned, yet they employ 60 per cent of residents in high-earning jobs, according to the Ministry of Manpower (MOM).

Data released on 17 September 2024 shows that these positions pay over S$12,500 per month, placing workers in the top 10 per cent of income earners.

MOM emphasized the importance of foreign investments in driving business growth and improving the local job market. In the second quarter of 2024, foreign firms employed nearly one-third of the resident workforce, underscoring their critical role in Singapore’s labour market.

These foreign-owned firms—defined as having less than 50 per cent local equity—also create opportunities for small and medium-sized enterprises (SMEs), which hire the majority of resident workers—which comprises Singaporean and Permanent Resident workers.

Dr Tan See Leng, Minister for Manpower, highlighted the impact of foreign firms in a Facebook post on 17 September: “Foreign-owned firms comprise around 20% of companies in Singapore and provide jobs for nearly one-third of employed residents. They account for a disproportionate share of higher-paying jobs—employing six in 10 residents earning a gross monthly income of above S$12,500. We will continue to invest heavily in Singaporeans while building a complementary global talent pool.”

He pointed to examples like Acronis, a Singapore-founded cybersecurity firm that upskills its workforce through Workforce Singapore’s Career Conversion Programme.

However, Dr Tan has faced repeated calls for more transparency about the proportion of new jobs allocated to Singaporeans, especially in high-paying roles.

Parliamentary Exchange on Employment of Singaporean PMETs

During a parliamentary sitting on 2 April 2024, Workers’ Party MP for Aljunied, Mr Gerald Giam, questioned Dr Tan about the allocation of new jobs, particularly for Singaporean professionals, managers, executives, and technicians (PMETs).

Mr Giam sought clarification on how many of the 88,400 jobs created in 2023, especially in PMET roles, were filled by Singaporeans.

He highlighted that non-residents accounted for 83,500 of the total new jobs. Mr Giam pressed for details on what measures MOM would take to ensure that more positions in 2024 would go to Singaporeans, particularly older workers aged 40 and above.

However, Dr Tan avoided directly answering the question on the percentage of PMET roles filled by Singaporeans. Instead, he focused on defending the increase in foreign employment, arguing that Employment Pass (EP) and S Pass holders complement rather than displace local workers.

Dr Tan clarified that of the 83,500 new non-resident jobs created in 2023, 18,700 were higher-skilled roles filled by EP and S Pass holders, while the majority—64,800—were work permit holders in sectors such as construction, which Singaporeans typically avoid.

He stated that resident employment increased by 4,900 but did not specify how many of these were PMET roles. Despite multiple attempts by Mr Giam to obtain precise figures, Dr Tan did not provide specific data on how many Singaporeans were employed in PMET roles compared to foreign workers.

Minister Deflects Specifics on PMET Employment

When Mr Giam reiterated his request for details on how many PMET jobs went to Singaporeans, Dr Tan shifted the focus to Singapore’s low unemployment rate and its position as one of the top countries in resident employment among advanced economies. He noted that Singapore’s resident employment rate of 66.2 per cent and long-term unemployment rate of 0.8 per cent were among the lowest globally.

Dr Tan explained that the influx of foreign workers was necessary to meet the demands of a growing economy, particularly in sectors facing significant talent shortages.

He argued that attracting foreign talent and investments helps businesses thrive, which in turn creates jobs for Singaporeans. However, he did not directly address Mr Giam’s core question about how many of the new PMET positions were filled by Singaporeans, leaving the matter unresolved.

Mr Giam countered that the 4,900 jobs created for residents in 2023 covered the entire workforce, not just PMET roles. He expressed concerns that the government’s extensive investments and incentives to attract multinational companies (MNCs) might disproportionately benefit foreign workers over Singaporeans.

MOM’s Focus on Foreign Talent

In his response, Dr Tan emphasized that Singapore must remain open to foreign talent to sustain economic growth, especially as the resident workforce shrinks due to demographic changes.

He rejected the notion of a “zero-sum game” between local and foreign workers, arguing that businesses need access to both local and foreign talent to remain competitive. He defended the government’s strategy of setting EP and S Pass salary benchmarks to ensure fair competition for local PMETs.

Nevertheless, Dr Tan’s refusal to provide specific data on the employment of Singaporeans in PMET roles has raised concerns about the transparency of MOM’s job allocation strategies.

Despite the government’s efforts to balance local employment with the need for foreign talent, questions persist about whether Singaporeans are benefiting proportionally from the country’s job growth.

According to the Labour Market Report for Q2 2024, released by Singapore’s Ministry of Manpower (MOM), total employment increased by 11,300 jobs in the second quarter. However, non-resident workers accounted for all of this growth, while resident employment—comprising both Singaporeans and permanent residents—declined by 600.

The job growth was largely driven by Work Permit holders in Construction and Manufacturing, sectors where residents are less inclined to work due to the lower wages and physically demanding conditions, especially in light of Singapore’s rising cost of living.

Despite ongoing efforts to boost resident employment, structural challenges remain. The MOM report noted that residents are generally not keen to take up these lower-paying, labor-intensive jobs, leading to a continued reliance on non-residents for filling such roles.

Underemployment and Retrenchment Challenges

The report also highlighted a slight rise in time-related underemployment among residents, from 1.9% in Q1 2024 to 2.2% in Q2 2024. This refers to residents who are employed part-time but would prefer to work more hours, indicating some level of job dissatisfaction or mismatch between available opportunities and their needs for full-time work.

Retrenchments increased from 3,030 in Q1 2024 to 3,270 in Q2, with Professionals, Managers, Executives, and Technicians (PMETs) and older workers among the most affected. More than half (55.0%) of residents retrenched in Q4 2023 managed to find new jobs within six months. However, a significant portion of these workers had to accept lower wages.

Of the residents who were re-employed, 41.4% had to settle for jobs that paid less than their previous roles. This figure is derived from the fact that 58.6% of re-employed residents managed to secure jobs with the same or higher wages. Therefore, the remaining 41.4% took up jobs with reduced pay.

Even more concerning is that only 32.2% of all retrenched residents were able to find jobs with wages comparable to or better than their previous positions. This figure is derived from the re-employment rate (55.0%) multiplied by the proportion of those who secured similar or higher wages (58.6%), highlighting that less than one-third of retrenched workers ended up in roles offering similar financial compensation.

Re-Employment Struggles for Older Workers

Older workers, particularly those aged 40 and above, faced even greater challenges. The re-employment rate for residents aged 40 to 49 dropped from 60.6% in Q1 to 54.4% in Q2. For workers aged 50 to 59, the re-employment rate saw a sharp decline from 52.8% to 41.6%, indicating that older workers not only faced difficulties in securing new roles but were also more likely to accept jobs with lower pay.

This situation reflects broader trends where older workers often struggle to match their previous earnings when transitioning to new jobs, contributing to financial strain, especially given Singapore’s high cost of living.

Non-Resident Employment Drives Growth

Non-resident employment increased by 12,000 in Q2 2024, mainly driven by Work Permit holders in Construction and Manufacturing. These sectors continue to rely heavily on non-residents for jobs that residents are generally unwilling to take up due to the nature and wages of the roles. Resident employment saw some growth in outward-oriented sectors such as Financial & Insurance Services, Information & Communications, and Professional Services, but these gains were outweighed by seasonal declines in Retail Trade and Administrative & Support Services, resulting in a net decline in resident employment.

The MOM report did not distinguish between Singapore citizens and permanent residents, so it is unclear how each group was specifically impacted. However, the fact that non-residents accounted for all job growth suggests continued challenges in attracting residents to certain sectors.

Tight Labour Market and Job Vacancies

The labour market remained tight in Q2 2024, with the ratio of job vacancies to unemployed persons increasing from 1.56 in March 2024 to 1.67 in June 2024. Job vacancies held steady at 81,200, while unemployment rates improved slightly. The overall unemployment rate fell to 2.0%, and the resident unemployment rate dropped to 2.7%, with long-term unemployment among residents remaining low at 0.8%.

Despite the high number of job vacancies, the declining re-employment rates among retrenched older workers and rising underemployment rates indicate ongoing difficulties in matching available jobs to residents’ skills and wage expectations.

Impact of Foreign Workforce Policies

The MOM report also reflects the impact of foreign workforce policies aimed at raising the quality and standards of non-resident workers. Declines in Employment Pass (EP) and S Pass holders were seen in several sectors, in line with government efforts to raise qualifying salaries and reduce reliance on foreign workers for mid-skilled positions.

However, the continued growth in non-resident employment, particularly among Work Permit holders, suggests that Singapore still depends on foreign workers to fill roles that residents are not willing or able to take up, especially in sectors offering lower wages.