Friday 14 September 2012

Foreign Worker Quota: Bosses who work within the limits

Some firms have found ways to cope with tougher laws on foreign workers
By Janice Heng, The Straits Times, 13 Sep 2012

IN THE face of Singapore's increasingly strict policy on foreign workers, many companies complain, others fold and some even break the law.

From declaring false salaries to get work passes, to having local "phantom workers" to meet the quota conditions for hiring more foreigners, errant employers have tried all manner of trickery.

Some misdeeds, such as having "phantom workers", will not be criminal offences, so the employers do not need to be taken to court, and the Manpower Ministry can mete out fines more quickly.

Some offences will be made stand-alone, with higher penalties attached. One is setting up shell companies to illegally recruit foreigners. Those found guilty will be fined up to $6,000, and jailed for at least six months and up to two years.

But what makes bosses desperate enough to break the law? Employers point to two main factors.

One, Singaporeans simply shun some jobs in sectors such as retail, food and beverage, and cleaning. So it is almost impossible to meet quota conditions that require a specified number of Singaporeans for each foreign worker hired.

Another reason is the seemingly daunting task of getting foreign workers through official routes.

"Businesses are facing a lot of uncertainty," said Association of Small and Medium Enterprises president Chan Chong Beng. The Government does not explain why it rejects applications, he added.

MP Zainudin Nordin was no less emphatic when he asked in Parliament on Tuesday: "How many of these employers had to resort to illegal ways because their legitimate application for foreign workers was turned down?"

Still, for every crooked company, there are many honest bosses - a point Acting Manpower Minister Tan Chuan-Jin stressed repeatedly.

The Straits Times looks at three companies that have found ways to cope.

New quotas after they were tightened in July 2012

Service industry

For every 100 workers, a company can hire 45 foreigners on Work Permit or S-Pass.

But at most, they can employ 20 S-Pass holders.

The remaining 25 must be Work Permit holders from these places: Taiwan, Malaysia, Hong Kong, South Korea, Macau and China.

Manufacturing industry

For every 100 workers, a company can employ 60 foreigners on Work Permit or S-Pass. But at most, they can employ 20 S-Pass holders.

The other 40 must be Work Permit holders from these places: Malaysia, Taiwan, Hong Kong, South Korea, Macau and China.

But only 25 - out of the total 100 - can be from China.

Construction industry

Of a company's total workforce, 87.5 per cent can be foreigners on Work Permit or S-Pass.

But only up to 20 per cent can be S-Pass holders. The rest must be Work Permit holders.

Work Permit holders must come from these places: China, Malaysia, Taiwan, Hong Kong, South Korea, Macau, India, Sri Lanka, Thailand, Bangladesh, Myanmar and the Philippines.

Some view frontline jobs as 'inferior'
By Janice Heng, The Straits Times, 13 Sep 2012

RETAIL chain BQ Mart, which sells barbecue grills, is feeling the heat from the tight foreign worker policy.

It has just one person manning each of its three outlets, and all three are foreigners.

Drivers and warehouse workers are also hard to find, said its business development manager Clement Chon, whose father owns BQ Mart.

Almost every CV he receives is from a foreigner, he said.

Singaporeans who apply ask for "sky-high" wages of $3,000 or more for a frontline position, which the firm "really can't pay", he said.

He pays his staff from $1,950 to $2,150 a month.

Singapore Retailers Association vice-president R. Dhinakaran cited two reasons Singaporeans are hard to hire in the retail industry: some view such jobs "as below their dignity or status", he said, and others dislike the long hours.

Standard retail hours are 10am to 10pm, and shorter shifts are possible only if there are enough people to roster, he said.

In theory, the shortage of locals should not yet be crippling for BQ Mart. It can hire more foreigners, as only four of its 15 employees are from abroad.

In the service industry, workers with S Passes or Work Permits can form 45 per cent of a company's staff strength.

But the problem is that BQ Meat can hire workers only from certain places, said Mr Chon.

Three of its four foreigners are Filipino S Pass holders. This is the maximum: S Pass holders can form only one-fifth of all staff.

The fourth foreigner is from China and a Work Permit holder. Chinese nationals can form only 10 per cent of all staff.

So, if BQ Mart wants more foreigners, these workers must be Work Permit holders from Malaysia, Taiwan, Hong Kong, South Korea or Macau.

"But even Malaysians do not want to work in frontline retail jobs nowadays," he said.

With many malls opening in Malaysia in the past five years, retailers there are finding it hard to recruit staff too, noted Mr Dhinakaran.

He wishes the Government would allow Work Permit holders from more countries, such as the Philippines.

BQ Mart wants to expand and has a fourth outlet set to open here soon. But the labour squeeze has made further expansion well-nigh impossible in Singapore.

"It's forcing us to move overseas," Mr Chon said.

Spas operating below capacity
By Ng Kai Ling, The Straits Times, 13 Sep 2012

IF MS Jazreel Low had her rathers, she would keep her spa open till midnight every day.

But with the shortage of therapists, she can do it only three days a week. Even then, it is not operating at full capacity.

"We have to turn away customers because we don't have enough therapists," said Ms Low, chief executive of Asmara Lifestyle that owns Aramsa Spa in Bishan Park.

It has 25 therapists but needs at least six more, vacancies it has been struggling to fill.

Singaporeans shun the job because of the long hours and hard work, and without enough locals on its payroll, foreigners cannot be employed because of quota conditions.

To employ a worker from China on a work permit or S-pass, a spa first has to employ nine Singaporeans or permanent residents.

"We try our best to retain local therapists by, for example, accommodating their requests on working hours," said Ms Low.

The spa stays open till 10pm daily except from Thursday to Saturday, when it closes at midnight. On these longer nights, six to eight therapists are rostered to work. But the spa has capacity for 12 customers at any one time.

Said Ms Low: "I have the facilities, and there is a demand, but I don't have the manpower."

The situation is made worse by competition from other spas.

Said Mr Joseph Sim, general manager of G.Spa: "There are not many Singaporean therapists in the industry, and some spas do offer higher pay to attract them."

Spa therapists typically earn between $1,200 and $1,800 a month in basic pay, and about $10 to $12 in hourly commission.

To cope with the labour crunch, Mr Sim said his company provides meals to its therapists and rewards those who clock in more than 150 hours a month with a cash bonus.

G.Spa employs 40 therapists at its two spas in Guillemard Road and Nassim Road. Its workers are also treated to outings every three months, like an all-expenses-paid night out at a karaoke lounge.

Ms Nancy Lim, president of the Spa Association, said the worker shortage has prevented many of its members from expanding, and forced some to downsize.

She estimates that more than 10,000 people work in about 1,200 spas here.

"It's a difficult problem to solve. Singaporeans are difficult to find, and without them, we cannot hire foreigners."

Cafe job? Singaporeans simply not interested
By Janice Heng, The Straits Times, 13 Sep 2012

WITH its freshly ground coffee and artisan breads, gourmet cafe Joe & Dough is an inviting place for a cuppa. But few Singaporeans seem to want to make or serve that cuppa.

It is not uncommon for director and co-owner Damien Koh, 31, to roll up his sleeves to provide such front-line service when his workers fall ill or go on leave.

"By going down to serve, we show we care for the front-line staff," he said, adding that this personal touch also gives his firm an edge when hiring.

Turnover is low, with many employees being there from the start three years ago.

Joe & Dough comprises a bakery and two cafes. The Hitachi Tower cafe seats 27, while the one at Suntec City seats 65. The Suntec cafe is a franchise, and the Hitachi one employs eight people - four Singaporeans and four foreigners. The 50-50 split puts it over the official limit.

Since July, foreigners can make up only 45 per cent of the total number of employees in service firms, down from 50 per cent. Such firms have until end-June 2014 to correct the situation.

Joe & Dough has begun hiring for a new outlet it plans to open by the year end.

Mr Koh is optimistic, but admits that finding staff is tricky for all firms in the industry.

He said: "The problem is that locals just don't like this kind of hands-on job." This is especially true of younger, well-educated Singaporeans, he added.

An entry-level front-line employee earns $1,300, excluding benefits, and works a 44-hour week. Mr Koh said he could raise wages by a few hundred dollars a month, but that would flatten profits and curtail future growth. "And growth is the only way I can really reward the staff," he added.

When he advertises for jobs, no locals apply. Many of his new hires are referred by existing staff. A lack of locals is a longstanding problem in the food and beverage sector, said Association of Small and Medium Enterprises president Chan Chong Beng.

But the labour crunch may improve things in the long run, he noted. "I think the Government's intention is to push everybody to the limit, so they have to up productivity."

Still, getting more workers is crucial as there are limits to improving productivity. Automation, for instance, is off the table. Said Mr Koh: "Ultimately, we are not a vending machine. You still want a human connection."

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