Government to review foreign manpower policies for hawkers and small F&B firms amid sustainability concerns

The Government will continue reviewing foreign manpower policies affecting hawkers and small food and beverage operators, Senior Minister of State for Manpower Koh Poh Koon said in Parliament on 2 March 2026.

Responding to a Parliamentary Question from East Coast GRC MP Jessica Tan, Koh cautioned against further differentiating levies and quotas to favour smaller operators, citing sustainability concerns.

Tan had asked whether more graduated or proportional foreign manpower arrangements could be considered for hawkers and small F&B businesses, to help them meet essential kitchen and service staffing needs while ensuring fair wages and worker protections.

Risk of unintended consequences

Koh said differentiating foreign manpower levies and quotas further could create perverse incentives. Larger operators might split into smaller entities to qualify for more favourable terms.

“Differentiating levies and quotas further to favour smaller operators could incentivise larger operators to break up into smaller entities to hire more foreign workers,” he said.

“This could result in a large increase in the number of foreign workers, which would not be sustainable given our limited infrastructure and social caring capacity.”

He stressed that manpower policy must be considered in the broader context of Singapore’s demographic constraints and social infrastructure limits.

Manpower pressures in a changing demographic

Koh acknowledged that small F&B operators and hawkers face manpower challenges amid an ageing population and evolving local career aspirations.

“Mister Speaker, we recognise the manpower challenges faced by small food and beverage operators, including our hawkers, given our ageing demographic and rising local aspirations,” he said.

He described hawker centres as a unique blend of food, space and community, and “a microcosm of Singapore’s multicultural society”.

To preserve the local identity of hawker culture, the Ministry of Sustainability and the Environment permits only citizens and permanent residents to be stallholders at hawker centres.

However, stallholders may hire eligible Long-Term Visit Pass or Long-Term Visit Pass Plus holders already in Singapore. Licensed food shops such as restaurants can hire foreign workers subject to prevailing service sector levy rates and dependency ratio ceilings.

Micro enterprises with only one local worker are allowed to hire their first Work Permit holder to address manpower needs.

Structural issues in the F&B sector

Koh referred to a 24 February 2026 opinion piece in The Straits Times, which highlighted structural issues in the F&B sector, including productivity gains lagging behind activity growth.

“One of the key things is that productivity gains have lagged behind activity growth,” Koh noted.

He added that operators have been putting in more effort and resources without proportionate economic returns.

According to Koh, the article argued that “productivity, and not headcount, must be the central lens through which business viability has to be looked at”.

He said this perspective aligns with the Government’s broader approach to sectoral transformation.

Calls for nuanced support

In her supplementary question, Tan said smaller operators lack economies of scale and may be pushed into higher dependency ratio tiers even if they hire just one additional worker.

“From the way hawkers and these small single F&Bs operate, honestly they are working 12 to 14 hours,” she said, adding that some residents had shared such experiences with her.

Tan expressed hope that the ministry would study data on single operators who might be discouraged from continuing their businesses due to manpower constraints.

Authenticity and public expectations

Koh agreed that smaller operators face genuine challenges, but said the issue extends beyond increasing headcount.

“I agree with her that it is a challenge for smaller scale operators. But this goes beyond just giving more headcounts,” he said.

He outlined three broader considerations: the sustainability of the operating model, public expectations of food authenticity, and long-term productivity.

Koh said Singaporeans hold strong expectations regarding the authenticity and preparation of traditional dishes.

He noted that in some food courts, traditional ethnic dishes are cooked by foreign workers rather than members of the originating community.

“If it makes sense for us to give them more headcounts just to produce the food at certain productivity and efficiency, that is something we are prepared to consider,” he said.

“But that will mean that the authenticity of recipe could be impacted. That is a conversation we should have and then decide how best to move forward.”

Support schemes for transformation

Koh said the Government has introduced schemes to support smaller F&B operators in raising productivity.

The Food X programme supports outsourcing labour-intensive food preparation to central kitchens to improve efficiency.

The F&B Process Optimisation Programme encourages technological adoption and process redesign.

Companies can also tap the Productivity Solutions Grant to support broader transformation efforts.

Koh said smaller operators may need to rethink their business models and leverage such schemes to reduce reliance on manpower growth.

“We will continue to review the foreign manpower policies for hawkers and small F&B companies together with relevant agencies,” he said.