Tuesday, 19 March 2013

Inflow of foreign workers slows down

Pool grows by 32,200 in 2012 - only half as many as in the previous year
By Amelia Tan, The Straits Times, 16 Mar 2013

STRICTER hiring policies are starting to put the brakes on the inflow of foreign workers, new figures showed yesterday.

The numbers have gone up, but not by as much as before.

Last year, the pool of foreigners swelled by 32,200 - excluding construction and domestic workers, who do not generally compete for jobs with Singaporeans.

But this jump was only about half as large as in 2011, when 60,200 more workers from overseas found employment.

Meanwhile, employment figures for Singaporeans and permanent residents are picking up pace.

The number of local people with jobs grew by 58,700 last year - up from 37,900 in 2011.

Economists said the Manpower Ministry figures show firms are beginning to set their sights on hiring Singaporeans due to the tighter restrictions on the inflow of foreign workers.

But they added that these policies will add to the pressure on firms' bottom lines because locals demand higher salaries than foreigners.

OCBC economist Selena Ling said wages are likely to keep going up as firms vie to attract Singaporean workers in the tight labour market.

The Manpower Ministry report showed that last year's overall unemployment rate remained low, at 2 per cent.

And the jobless toll among residents dropped slightly to 2.8 per cent from 2.9 per cent in 2011.

DBS economist Irvin Seah said Singapore will have to contend with lower economic growth in future as the Government continues to reduce the dependence on foreign manpower.

"Something has to give when foreign worker inflow is tightened," he added.

However, Bank of America Merrill Lynch economist Chua Hak Bin said the "social benefits" of the tightening measures - for example, making it easier for Singaporeans to find jobs - outweigh the cost of lower growth.

He added: "Firms will also be pushed to look at ways to raise their productivity.

"They have to do this to justify paying their local workers higher salaries."

Business owners who spoke to The Straits Times said some firms have had to shut down or downsize in past year, after failing to adapt to the new hiring climate - a trend they expect to continue.

These observations are backed up by figures from the ministry's latest report.

Last year, 11,010 workers were laid off, up from 9,990 in 2011.

Mr Chan Chong Beng, president of the Association of Small and Medium Enterprises, expects to see many service firms winding up or merging when the sector is hit by a double whammy of higher worker levies and tighter quotas over the next few years.

"Growth in the service sector has been driven by readily available cheap foreign labour in the last few years.

"It is not a bad thing that they are now being forced to be more efficient."

Mr Patrick Tay, of the National Trades Union Congress, said professionals should be given help to pick up other skills that will allow them to stay employed as Singapore goes through economic restructuring.

The director of legal services and the professionals, managers and executives unit added: "We should also continue our efforts to keep and attract more mature workers, as well as females who are keen and able to work, to enter into the workforce."

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