Written Answer by Minister for Manpower Dr Tan See Leng to PQ on Size of Job Market for Information and Communications Sector
NOTICE PAPER NO. 1720 OF 2023 FOR SITTING ON OR AFTER 22 FEBRUARY 2023
QUESTION NO. 4234 FOR ORAL ANSWER
MP: Mr Gerald Giam Yean Song
To ask the Minister for Manpower (a) whether the job market in the information and communications sector is shrinking; and (b) if so, whether the Ministry has correspondingly reduced the number of employment passes and S Passes issued to foreigners seeking jobs in this sector.
Answer:
1. In the last few months, there have been several Parliamentary Questions filed by Members regarding retrenchments by tech companies. Recent news
about retrenchments by big tech companies has understandably caused some concerns on the outlook of the Information & Communications (I&C) sector. The Ministry of Manpower (MOM) is closely monitoring the situation.
2. Based on the latest available data as of September 2022, total employment in the I&C sector grew by 13,700 in the first three quarters of 2022. The number of job
vacancies in the I&C sector at 9,300 in September 2022 was also higher than that observed in the same period in 2021.
3. However, global headwinds may weigh on labour demand in the near term and we expect to see a dampening in hiring demand and a slower increase in total employment in Q4 2022.
4. Even so, we remain cautiously optimistic about the long-term prospects of the I&C sector as tech firms continue to pursue opportunities in Southeast Asia’s growing digital economy from Singapore. Tech skills also continue to be in high demand both within and beyond the I&C sector as the pace of digitalisation accelerates across our economy.
5. That said, I will address the second part of the Member’s query, which suggests that MOM should reduce the number of Employment Passes (EPs) or S Passes issued in the event the I&C sector shrinks.
6. Singapore's economy is open and connected. It is only natural that changes in external demand in the global economy have an impact on our companies, and on our job market. We have designed our policies to safeguard good local employment outcomes across the business cycle. When it comes to our foreign workforce policies, MOM has set a quality benchmark for EP and S Pass holders to be pegged to the top one-third of local Professionals, Managers, Executives and Technicians (PMETs) and Associate Professionals and Technicians (APTs) respectively. This ensures that firms do not turn to cheaper options as a first resort, to ride out a business downturn.
7. Firms are also incentivised to hire and retain locals. Specifically, with the upcoming introduction of the Complementarity Assessment Framework (COMPASS) at the EP level, firms with a low local PMET share relative to industry peers will score fewer points on COMPASS and will face a harder time getting the points required for their EP applications. For the S Pass, we have in place the S Pass sub-Dependency Ratio Ceiling (DRC), or quota. This quota is calculated based on a firm’s total workforce, including how many locals the firm hires. Hence, should the firm’s total workforce fall when locals are amongst those retrenched, the S Pass quota available to the firm would decrease and the firm will not be able to hire as many S Pass holders as before. Finally, under the Fair Consideration Framework, employers are also required to advertise on MyCareersFuture and fairly consider all candidates for the job, before submitting an application for an EP or S Pass holder.
8. Our foreign workforce policies are complemented by other measures to ensure local employment outcomes are safeguarded during downturns. For instance, the Tripartite Advisory on Managing Excess Manpower and Responsible Retrenchment (TAMEM) provides guidance to companies on managing excess manpower. Retrenchments should be a last resort, and selection of employees to be retrenched should be based on objective criteria with primary considerations given to employee merit and preserving skills to ensure business sustainability. Employers should also take a long-term view of their manpower needs, including the need to maintain a strong Singaporean core. This means that retrenchments should generally not result in a reduced proportion of local employees.
9. In summary, MOM does not and should not micro-manage how the job market functions by directly and arbitrarily adjusting the number of EPs and S Passes issued in response to business fluctuations. Adopting such a protectionist measure would cause significant business uncertainty, and undermine Singapore’s reputation as a transparent, competitive, and reliable location for businesses. It would go against how we have thrived over the decades by being an open economy and a business hub. Instead, we have a comprehensive suite of measures in place that allows us to attract more investments, and grow the pie to create many more good jobs and career choices for Singaporeans.