Salary not the only criterion in granting work passes

• The Straits Times (31 Mar 2011) : Salary not the only criterion in granting work passes
• The Straits Times (28 Mar 2011) : The S-Pass way to productivity
• The Straits Times (29 Mar 2011) : Granting of passes

Salary not the only criterion in granting work passes
- The Straits Times, 31 March 2011

We refer to the Straits Times editorial (“The S Pass way to productivity, 28 March 2011) and the letter by Ms Grace Chua (Granting of passes”, 29 March 2011).

2.   The ST Editorial rightly pointed out that the objective of increasing foreign workforce levies is to motivate companies to rely less on low-skilled foreign workers and to improve productivity and efficiency.

3.   At the same time, the increase in the qualifying salaries for S Pass and Employment Pass (EP) encourages companies to hire those who have better qualifications and better skills that can justify the higher starting pay. Otherwise, companies would have to apply for foreign workers on lower work passes which carry with them higher levy rates. In any case, salary is by no means the only criterion. EP holders have to possess acceptable university degrees, professional qualifications or specialist skills. As for S Pass holders, they are indeed already assessed on a points system as suggested by Ms Chua and this is based on multiple criteria including educational qualifications, job type and relevant work experience.

4.   Besides improving their manpower profile, companies need to review their business models, streamline their work processes, improve their products and services, and create more value-add so that they can be more productive, competitive and sustainable in the long run. They can take advantage of the many programmes that the Government has put in place to support companies in doing so, such as the Productivity and Innovation Credit (PIC) which provides significant tax deductions for investments in productivity and innovation. Companies can also tap on the generous training support provided under our Continuing Education and Training (CET) framework to send their workers for upgrading and upskilling so that they can take on higher-skilled and better-paying jobs.

5.   The ultimate aim of all these policies, taken together, is to help Singapore shift towards productivity-driven growth that is more sustainable and inclusive. This will benefit not just our economy but all Singaporeans, both employers and employees.

The S-Pass way to productivity
- The Straits Times, 28 March 2011

FROM July 1, the salary threshold for S-Pass holders will be raised from $1,800 to $2,000. Manpower Minister Gan Kim Yong said in Parliament earlier this month that, in doing so, the wages of this middle tier of foreign workers - who currently earn between $1,800 and $2,500 a month - will keep pace with salaries of local workers which have gone up over the years. Analysts agree that the time is right to revise the qualifying income for S-Pass holders, which has not been adjusted since 2004.

The news is positive on many levels, not least of which is its expected beneficial effect on productivity. As wages of S-Pass holders will now be more aligned to the salaries of local workers, employers should be more able to choose the best workers based on merit and their contributions to the company, regardless of their nationality. Also, as employers cannot continue using the excuse that foreigners are cheaper to hire, they may in the long term be weaned off their reliance on foreign labour.

With the adjustment, the Singaporean worker could also expect to receive more competitive remuneration, say analysts, as companies may raise wages of existing local staff to be on a par with what foreigners are getting.

There are some weak links though. This equation does not take into consideration the common lament that Singaporeans still shun work that S-Pass and work permit holders take up - in particular, positions in the retail, health-care and construction sectors. Also, with Singapore enjoying close to full employment, there is a widely touted skills substitution dilemma - it is unclear if the new measures will push more local workers to move into new industries, or even stay longer in jobs commonly taken up by S-Pass holders.

Employers will also be feeling more heat as the move comes on the back of a rise in foreign worker levy rates, forcing them to fork out an average of $240 more a month in levy for each S-Pass holder between now and July 2013.

The measures also do not address work permit holders, who earn salaries of less than $1,800. This sector will continue to prove problematic as jobs as waiters and in the construction sector will remain too lowly paid and unattractive to most Singaporeans. For these, employers will have to bite the bullet and start thinking out of the box, whether through the ramping up of productivity, more innovative work configurations or lifelong training.

Granting of passes
- The Straits Times, 29 March 2011

I am not sure raising the salary bar will persuade employers to be more selective in hiring foreigners ('Tighter criteria for work-pass applicants'; March 10). A company in Sydney might hire a manager to work here for the same salary he is paid in Sydney. He might be earning an average salary in Sydney but in Singapore dollars, his salary might well be over the threshold.

So, the question revolves around how selective the Ministry of Manpower (MOM) is in granting employment passes. Is salary the most important qualifying criterion? An applicant could have lower education qualifications but earn more than the qualifying monthly salary and yet obtain an employment pass. Unless there are clearer criteria, like a points system for all job categories, we will always be guessing why employment passes are issued to even those who have no special skills and do not hold a degree.