If Only Singaporeans Stopped to Think: Fair Consideration Framework: Firms to Consider Singaporeans Fairly for Jobs

Tuesday, 24 September 2013

Fair Consideration Framework: Firms to Consider Singaporeans Fairly for Jobs

Firms must show they tried to recruit Singaporeans first

Only then can they hire foreign PMEs; ads have to be run in new jobs bank

By Toh Yong Chuan, The Straits Times, 24 Sep 2013

COMPANIES will soon have to prove they tried to hire Singaporeans first before they are allowed to recruit foreign professionals.

They will also have to pay the foreigners more, as part of a new move by the Government to prod companies to consider Singaporeans for vacancies instead of hiring non-citizens.

Central to these measures is a new government-run jobs bank which takes effect next August.

All companies with more than 25 employees must advertise professional, manager and executive (PME) posts that pay less than $12,000 a month, at the jobs bank.

The advertisements have to run for at least 14 days before they can apply to the Ministry of Manpower (MOM) for an Employment Pass (EP) for a foreigner. Those who fail to use the jobs bank will have their EP applications rejected.

The jobs bank will be established and run by the Singapore Workforce Development Agency (WDA) in the middle of next year. It will be free for use by companies and job seekers.

Another change is that EP holders hired from January next year must be given a higher starting pay of $3,300 a month, up from $3,000 now.

This increase is to keep it in line with rising salaries.

The MOM also made clear that older and more experienced applicants must earn even more to get an EP, but it gave no details on these higher thresholds.

These various moves, part of what the ministry calls the Fair Consideration Framework, will ensure that Singaporeans get a fair chance at landing a PME job, said Acting Manpower Minister Tan Chuan-Jin.

But it is not a "Hire Singaporeans first" policy, he stressed, saying: "Singaporeans must still prove themselves able and competitive to take on the higher jobs that they aspire to."

The latest changes come in the wake of complaints from Singaporeans that foreigners take up good-paying PME jobs.

Fair employment watchdog Tripartite Alliance for Fair Employment Practices (TAFEP) reported 303 workplace discrimination complaints last year, up from 277 in 2011.

The MOM also warned yesterday that it will keep a close watch on companies with few Singaporeans in PME jobs and those with repeated complaints of unfair hiring practices.

Companies that fail to improve may face delays in their EP applications, or lose their privileges for hiring foreigners, it said.

Both the Singapore National Employers Federation and National Trades Union Congress (NTUC) welcomed the national jobs bank.

It will give companies access to a wider pool of local PMEs, said the SNEF.

NTUC's leader for PME issues Patrick Tay, who is also an MP, said: "(It) should ensure foreign manpower complements rather than undercuts the skills of the local workforce."

Minimum salary for EP holders raised

Firms hiring young foreign grads must pay at least $3,300, up from $3,000

By Janice Heng, The Straits Times, 24 Sep 2013

FROM January next year, firms that want to hire skilled foreigners must pay them at least $3,300 a month, up from $3,000 now.

The change comes amid moves to improve Singaporeans' employment chances, though industry bodies have raised concerns it could lead to higher labour costs.

The new Employment Pass (EP) qualifying salary applies to young graduates from good educational institutions. Older and more experienced applicants must earn even more in order to get an EP.

The Ministry of Manpower (MOM) announced the move yesterday alongside a new framework to make firms consider Singaporeans first for professional, managerial and executive (PME) jobs before hiring foreigners.

It did not give further details on the salary requirements but said the change was "in line with rising salaries". The median starting salary for university graduates was $3,050 last year.

NTUC director for legal services and PME Unit Patrick Tay welcomed the move. "This will, in a way, level the playing field for young job market entrants," he said.

At first, the new $3,300 minimum will affect only fresh applicants, not those seeking renewals.

EP holders whose passes expire before next January will be given a one-time renewal of two or three years, based on current criteria.

Those whose passes expire between Jan 1 and June 30 next year will get a one-time renewal of up to one year.

But after June 30 next year, all EP holders will have to meet the new criteria to get their passes renewed. The MOM said this will give companies time to make adjustments.

Industry representatives had mixed views on whether the change would translate to fewer foreigners being hired on EPs.

If firms cannot find Singaporeans, the change will simply mean higher wage costs as they must still hire EP holders, said Singapore Chinese Chamber of Commerce and Industry president Thomas Chua.

"It may lead to Singaporean employers having to pay more for foreigners because of the lack of Singaporeans coming forward to fill those vacancies," he said.

The Singapore National Employers Federation shared his concern. But its executive director Koh Juan Kiat noted that the last time the EP qualifying salary was raised, the number of EP holders in Singapore did fall.

That was in January last year, when the qualifying salary rose from $2,800 to $3,000. The number of EP holders here fell from 175,400 in December 2011 to 172,100 in June this year.

With the latest change, some firms may consider hiring workers on S Passes instead, said Mr Koh. These are for mid-skilled workers earning at least $2,200 a month.

Firms which do continue hiring EP holders, however, will demand better qualifications and higher skills, given the higher cost, he added.

Unions, employers back move but some worry about impact
By Janice Heng And Toh Yong Chuan, The Straits Times, 24 Sep 2013

EMPLOYER groups and unions support the move to ensure fair employment for locals, saying the requirement to advertise a vacancy locally before hiring foreign professionals is reasonable.

But some industry groups had worries, such as that Singapore's competitive edge may suffer if foreigners feel unwelcome.

"We need to be cautious that it does not create a sense of uncertainty among foreigners who may feel discouraged about working in Singapore," said Singapore International Chamber of Commerce (SICC) board member Jonathan Asherson.

The new rule for hiring foreigners on Employment Passes (EPs), unveiled yesterday by the Ministry of Manpower (MOM), takes effect next August.

The MOM also said it will keep an eye on companies with relatively few Singaporeans at the professional, managerial and executive (PME) level, or those with repeated complaints of unfair hiring.

The National Trades Union Congress (NTUC) cheered the moves.

It has been calling for labour market testing - making companies consider locals first - since August 2011, and earlier this month, its chief Lim Swee Say mentioned the idea of a jobs bank.

But its call for a quota on EP holders, similar to those for other work passes, has not been accepted. It is "not letting go" of the idea yet, its director for legal services and PME Unit Patrick Tay said yesterday, but would monitor how well the new MOM framework works.

Employers also welcomed the move, saying they prefer hiring Singaporeans as there is more stability when work passes are not needed and they understand the local culture as well.

The Singapore National Employers Federation (SNEF) said the job advertisement rule "should neither delay nor hinder the hiring process".

It is not an added burden, said Singapore Human Resources Institute president Erman Tan. "We already need to advertise anyway."

Industry associations, however, sounded more cautious.

Both the SICC and the Singapore Chinese Chamber of Commerce and Industry (SCCCI) said their members already try their best to hire Singaporeans.

But if Singaporeans continue to remain elusive, the new job advertisement rule could put a strain on businesses, said SCCCI president Thomas Chua.

"In a tight labour market, 14 days is a considerably long wait, especially for SMEs with a lean workforce," he said, referring to small and medium-sized enterprises.

But the Association of SMEs president Chan Chong Beng noted that the smallest firms will be spared. Those with 25 and fewer employees will not have to advertise in the new jobs bank.

The SNEF, however, said it would encourage small firms to do so. But it wants an exemption for jobs with skills which are scarce in Singapore.

And some were sceptical of the move's eventual impact. Said human resource consultant Martin Gabriel of HRMatters21: "The new rule does not require companies to justify why they reject local applicants, so they may just go through the motion."

The Singapore Democratic Party also welcomed the move, saying it had proposed similar ideas before. Earlier this year, it said companies should submit evidence of job advertisements and a log of local interviewees before hiring foreigners.

Voices TODAY asks: Will Singaporeans get a fairer shot at jobs?

New rules cool interest in entry-level foreigners
But higher salary minimum could cause labour crunch for some sectors
By Amelia Tan, The Straits Times, 25 Sep 2013

THE lukewarm interest shown by many companies in entry-level foreign professionals is likely to cool even further, when they have to pay them higher salaries starting from next year.

Employers told The Straits Times yesterday that the new minimum salary, which will rise from $3,000 to $3,300 in January, will make them think twice.

"For a $3,300 pay, it makes more sense to hire a Singaporean fresh graduate than a foreigner. It is more likely that locals will stay on in Singapore and with the firm," said Rikvin recruitment consultancy manager Satish Bakhda.

The Ministry of Manpower (MOM) announced on Monday the new salary benchmark alongside a framework to make firms consider Singaporeans first for professional, managerial and executive jobs before hiring foreigners.

A key change is a new government-run jobs bank which takes effect next August. Companies have to run advertisements for at least 14 days before they can apply to MOM for an Employment Pass (EP) for a foreigner.

Mr David Ang, associate director of human resource consultancy Remuneration Data Specialists, said the changes will not only ensure Singaporeans are considered first for all roles but will also increase their wages.

"Firms should not have a problem about hiring locals if they offer salaries of $3,300," he said.

As it is, bosses usually eschew fresh foreign graduates. They do not have proven track records, said employers and recruitment specialists.

Companies said they usually hire EP holders who have at least three years of experience and command monthly salaries of about $4,000.

The knock-on effect of the new ruling could be a boon for other foreigners, said analysts.

Companies are likely to hire workers on the lower-tier S Passes instead. These are for mid-skilled workers earning at least $2,200 a month.

Bosses also expect existing EP-holder employees to ask for higher pay now that the minimum salary has been raised.

Mr George Wong, managing director of engineering firm Tec Revox, who employs two EP holders with salaries of $4,000, said: "I will probably have to raise the salaries of the experienced EP holders by 10 per cent.

"But they will also have to take on more responsibilities to justify their higher pay."

For the sectors which rely on entry-level foreigners, such as information technology, engineering and design, the fear is that the change will add to the labour crunch. They have to engage foreigners because there are not enough locals with the right skill sets or who want to do the job, they said.

Association of Small and Medium Enterprises president Chan Chong Beng pointed out that these firms could still struggle to attract locals despite offering good salaries.

"Not many Singaporeans want to do jobs with long hours or which require them to be on call any time of the day," he said.

One employer who is finding it tough to hire locals is Mr Ko Chee Wah, chief executive of interior design and events company Cityneon.

He is still hoping to employ more Singaporeans this year for roles such as designers and project managers. This will allow him to hire two EP holders, down from five a year.

"Singaporeans are always my first choice. The problem is they may not want the job because of the long hours," said Mr Ko.

Bulk of employees are local, banks say
By Yasmine Yahya, The Straits Times, 25 Sep 2013

LOCAL banks believe their hiring policies are in keeping with new Ministry of Manpower (MOM) rules to ensure that companies give Singaporeans fair consideration for jobs.

The banks say their recruiting processes ensure that the bulk of their employees are locals and permanent residents. The finance industry is often in the hot seat over hiring as it is one of the main sectors employing foreigners.

Mr George McFerran, the Asia-Pacific managing director of recruitment firm eFinancialCareers, said most banks prefer to hire locals but the nature of the industry is that it sometimes requires foreign talent.

"Hiring someone from overseas is expensive and takes time, while hiring a local makes sense - they understand the market and will have good connections," he said. "But if you have a French client who wants his banker, his representative in Asia, to understand his culture and speak French, you may need to hire a French banker."

Banks who spoke to The Straits Times yesterday say they have put in place measures to give fair consideration to locals.

Singaporeans and PRs make up more than 90 per cent of staff at the three local lenders - DBS Bank, United Overseas Bank and OCBC Bank.

HSBC and Standard Chartered said locals and PRs make up about 90 per cent of staff, while at Citi it is 82 per cent.

Citi's head of corporate affairs, Mr Adam Rahman, said: "It is important to have some foreign talent who have global perspectives, expertise and skills to complement the overall development of Singapore as an international financial hub, and also enable the transfer of skills to the local staff."

While banks say that their hiring practices largely follow the MOM regulations released on Monday, they add that the new rules could trigger a bidding war.

This is because the new rules require a job advertisement in a new jobs bank. The information provided should include the salary range. While this would increase transparency, this could also lead to job-seekers comparing salaries across various banks and becoming more picky, bankers said.

Go beyond ‘nudges’ in tackling discrimination
By Eugene K B Tan, Published TODAY, 25 Sep 2013

Workplace discrimination is hard to prove, especially when an employer is determined not to hire on merit and set on preferential hiring for reasons not connected with the job.

Unveiled on Monday, the Fair Consideration Framework (FCF) was described by Acting Manpower Minister Tan Chuan-Jin as a “nudge” to employers to give Singaporean professionals, managers and executives (PMEs) — who constitute about a third of the workforce — a “fair chance” at job and development opportunities.

The Government has generally not been enamoured of legislation to deal with unethical employment practices (be it “hiring-own-kind” or discrimination on the basis of race, gender, age). Enforcement is a perpetual challenge.

Instead, calibrated steps have been preferred. In 2011, the Tripartite Guidelines on Fair Employment Practices were enhanced to include a section on “Hiring and Developing a Singaporean Core”. The FCF, which comes into effect only next August, is another attempt to gently restrain the almost unbridled power of employers to hire at will. Whether the light-touch FCF will be effective remains to be seen.

S’POREAN CORE AT DISADVANTAGE

Singapore’s open economy necessitates a relatively free flow of people, ideas, goods and services and finances. The need to augment the local workforce, quantitatively and qualitatively, has resulted in a fairly liberal policy enabling employers to hire foreign PMEs without quotas or levies. This makes Singapore attractive, business-wise.

It ought to be win-win for all stakeholders: Singaporeans get access to good jobs, employers get the human capital they need. But anecdotal evidence suggests the influx has left citizens disadvantaged or discriminated against.

Some employers prefer to hire foreign PMEs, whether for reasons of national affinity, costs or expediency. Ask a Singaporean PME in the private sector and he/she could probably attest to encountering nationality-based hiring, promotion, retrenchment or dismissal.

The FCF reminds employers that it cannot be business as usual, not when nationality-based hiring has become a visceral political hot potato. There is the reasonable expectation that the Government should protect Singaporean workers from foreign job seekers; workers around the world expect their governments to do the same. Who else, after all, can protect the Singaporean worker?

The FCF has merit and fairness as its cornerstones. But their application has to be contextualised. Just a sliver of the millions of newly-minted graduates and PMEs around the world could overwhelm the Singapore job market. It is within the theoretical realm of possibility that if the thriving economy attracts throngs of qualified job seekers, many citizens could be displaced.

Notwithstanding the meritocracy principle, there must be adequate protection for citizens, including of the so-called “good jobs” and the opportunity to develop professionally. This is not about preferential treatment, but the need to grow a Singaporean core and sustain the desirability of Singapore as a business hub.

One deep concern has been that the 6.9 million population parameter detailed in the Population White Paper, with the Singaporean core forming only 55 per cent of it, could pose greater problems for local PMEs. Indeed with social mobility moving many more citizens into the PME bracket, the competition for quality jobs would intensify.

FAIR CONSIDERATION, REALLY?

The FCF rejects an affirmative action approach of “Hire Singaporeans First” or “Hire Singaporeans Only”. Fair consideration and opportunity, rather, is its guiding principle. But to what extent will the FCF succeed in effecting this?

The FCF pivots on the requirement for most employers to advertise for at least 14 calendar days their PME job vacancies, which must be open to Singaporeans, through the Workforce Development Agency’s jobs bank. Having done that, the prospective employer can submit an Employment Pass (EP) application should it seek to hire a non-citizen PME for the job instead.

The FCF falls short, however, of requiring employers to demonstrate that there are no suitable Singaporean PMEs for the job advertised. Such a labour market testing requirement, adopted in many other countries, should be seriously considered. The use of quotas and levies, as in the case for lowly-skilled workers, should not be ruled out.

It is also possible for an employer to “game” the FCF and indulge in tokenism — in which locals are nominally hired to do the “heavy lifting” so as to get around the tell-tale sign of the firm’s disproportionately low concentration of Singaporeans at the PME level.

Yes, the FCF operates on the imperative of cajoling employers to changing their mindsets, and the belief that fair consideration cannot be easily legislated but that patterns of behaviour must be nudged along. The “nudge” is backed up with some teeth: Firms which have room to improve will be scrutinised, and they could have their EP applications take longer to review or their work pass privileges curtailed.

Still, the Government is unlikely to be unduly interventionist; only the most egregious cases will be sanctioned.

IT’S A COLLECTIVE FIGHT

The paradox of workplace discrimination is that an employer shortchanges itself by limiting the pool of prospective recruits. It may also lose valuable employees who leave because they are unfairly passed over for promotion and career opportunities. Yet workplace discrimination persists and appears to be a growing problem.

Thus, the FCF nudge must be accompanied by the imperative for employers to critically “think” about their hiring practices. Employers have to be persuaded of their social responsibility to adopt fair and non-discriminatory practices. At the same time, PMEs should be nudged to shift their mindsets to continually develop themselves so they can compete for the good jobs.

Moreover, the FCF will succeed only with a tripartite framing of the issue — workers, employers and Government all helping to implement effective solutions, and impartially considering the interests of all stakeholders (and not driven to compliance merely out of fear of punishment).

Discrimination undermines the meritocratic ethos of our society; we need to rise above the tepid response to the issue. This requires that, individually and collectively, we identify and fight discrimination. Only then can fair consideration and opportunity have true meaning.

Eugene K B Tan is an Associate Professor at the Singapore Management University School of Law. He is also a Nominated Member of Parliament.

Giving Singapore workers a fairer chance
Editorial, The Straits Times, 26 Sep 2013

UNDER the Ministry of Manpower's new rules, companies will soon have to prove that they tried to hire Singaporeans first before they are allowed to recruit foreign professionals. Key to that exercise will be the creation of a government-run jobs bank. With foreigners costing more as well under the rules, the move should assuage the concerns of professionals, managers and executives here. Their complaints have centred lately on the perception of discriminatory treatment, based on nationality, received at the hands of some employers. There was a crying need to deal with malpractices, and the Fair Consideration Framework seeks to do so by institutionalising a mechanism that would make such attempts by short-sighted employers more difficult. This can help to make the entry of foreign workers more palatable to Singaporeans because they will be seen as supplementing rather than supplanting the local workforce.

The framework does not inaugurate a compulsory "Hire Singaporeans First" policy, let alone a "Hire Singaporeans Only" one. That would be out of character for a globalised city-state which thrives on its openness to foreign labour as much as it does on foreign investment and technology. Singaporean employees by and large understand that they benefit collectively from the status quo. But the quid pro quo, where employers are concerned, is that Singaporeans must stand a fair chance of competing with foreigners in their own country. Nationality-based discrimination goes against notions of fair play, impartiality and meritocracy. The authorities will have to implement the new framework rigorously. Employers must support the jobs initiative genuinely and not place advertisements in the jobs bank just for form's sake.

Apart from ethical considerations, Singapore employers should focus on skills and productivity in building up a core national workforce. Such a core will be stable over the long run compared to the comings and goings of foreigners and it will help prevent the social environment from deteriorating because of tensions between locals and foreigners. Singaporean employees, on their part, would be unwise to see the new jobs framework as a template for protectionism. If the pendulum swings too far towards restricting the entry of foreign workers, particularly in a tight labour market, standards might drop and investors will look elsewhere.

Indeed, the authorities should ensure that the new rules inspire confidence in the Singapore worker that he stands a fair chance at a job and in the employer that the system is not cumbersome. Regulations are necessary to protect the legitimate interests of labour - in this case Singapore workers - and a healthy economy depends on allowing the labour market to remain responsive to the laws of supply and demand.

Sending the right message to Singaporeans

AT FIRST glance, the latest move to ensure fair employment for Singaporeans seems superficial ("Firms must show they tried to recruit Singaporeans first"; Tuesday).

Hiring companies can go through the motions of putting an advertisement in the government-run job bank, then go back to their old ways.

Also, I do not understand why we need another job bank when there are already several job portals.

But after careful consideration, I found the Government's initiative to have sufficient merits.

First, the fundamental principle of giving priority to Singaporeans is clear. It is a moral victory for Singaporeans whose families are rooted here and who are committed to the nation's well-being.

Second, the scheme gives employers sufficient leeway in their hiring decisions.

We can debate whether the 14-day period for the job ads is too long or too short, or whether the punitive measures have sufficient deterrent effect, but we must recognise that hiring is ultimately a personal decision.

Having been in human resources for more than 20 years and in executive search for the past seven years, I know that hiring is based on a myriad of subjective and objective factors; in most instances, it is the "chemistry" that counts.

Third, and perhaps most importantly, the Manpower Ministry has deemed it necessary to act. This has wide and far-ranging political and social implications.

Singapore's employment landscape has changed rapidly along with the influx of foreign talent and workers.

Now, there is structural unemployment; manufacturing companies are moving out and service-based firms are moving in.

The first act is always fraught with uncertainty and unanticipated results. Let's be patient and judge the results.

Sonny Yuen
ST Forum, 26 Sep 2013

Don't rubbish the entire premise of new hiring framework
By Janice Heng, The Sunday Times, 6 Oct 2013

The Manpower Ministry's (MOM) recent move to get firms to consider Singaporean hires first has come under some fire.

But are critics aiming at the right target, or should they be spending their ammunition elsewhere?

One common criticism of the Fair Consideration Framework is that it may not result in more Singaporeans beating out skilled foreigners in landing jobs.

The framework requires firms to advertise a position for 14 days in a government jobs bank before they can apply to hire a foreigner on an Employment Pass.

It does not police the hiring process itself, or set limits on hiring outcomes. This, some say, leaves firms as free to hire foreigners as before.

The new framework does not guarantee that Singaporeans will be chosen over foreigners. Nor does it give Singaporeans an added advantage over foreigners.

As Acting Minister Tan Chuan-Jin himself has said: "The framework is not about 'Hire Singaporeans First, or Hire Singaporeans Only'."

What the framework aims to do is enforce fairness - not create a bias in favour of Singaporeans. And this aim is not at all surprising, if seen in the context of the Singapore Government's unwavering commitment to meritocracy.

Indeed, that very value was invoked by Mr Tan. In a blog post on the new measures, he wrote: "Together, we must reaffirm our ideals of meritocracy and fair treatment."

Later in the post, he added: "Singaporeans must continue to compete for jobs and advancement on their own merit - a value which we have always embraced."

This approach is analogous to the Government's take on education policy, where meritocracy is prized and affirmative action anathema.

Similarly, when it comes to socioeconomic achievements, Singapore prides itself on equality of opportunity. It does not seek to enforce equality of outcomes, instead preferring redistribution to address inequality.

What does this all mean in the context of the Fair Consideration Framework?

Some critics would like a "Singaporeans first" outcome - even if this comes at the expense of quality.

There are arguments that could be made in support of that view. One could argue that providing citizens with good jobs is important enough a goal that it should trump concerns of fairness and meritocracy.

One could also say that Singapore should be less demanding when it comes to the quality of its labour, and should reject foreign candidates even if they are better-qualified - as long as the Singaporean candidates are good enough.

The problem with such suggestions is that they are unlikely to fly, given that the principle of meritocracy is the foundation of policy-making here.

It would be more productive for critics to focus their criticisms on other aspects of the framework.

For instance, some critics have rightly pointed out that firms do not need to show that they have actually considered Singaporean candidates. This is something that could be remedied.

In announcing the new framework, the ministry said it does not want to interfere in hiring decisions. Yet, there is a wide range of options between direct interference, and the current lack of oversight of the hiring process.

One option is requiring firms to declare how many Singaporean candidates were interviewed and why they were rejected, before they can apply to hire a skilled foreigner. This would not be interfering in the firms' decisions. But it would make them a little more accountable.

If we want to criticise the new fair employment framework, we do not have to rubbish its entire premise to do so. Rather, it would be more productive to point out where the framework falls short in preserving the very values it aims to uphold.