One-eighth of Singapore’s foreign workforce lost jobs last year. Will they ever return?
- Non-residents, mostly lower-skilled workers, accounted for all job losses last year as the city state battled its deepest recession ever
- Economists say foreign talent is still needed when the economy picks up, and while offshoring from ‘superstar cities’ is becoming more common, Singapore is still alluring to expats
Her employer did not want to increase her monthly salary by more than S$1,000 (US$742) – as was required to keep the same type of visa, given Wong’s education and experience – and last October applied for the lower-tier “S pass” instead. But Wong, who asked to be known only by her surname, said the application was still not approved by the time her visa expired on January 7.
So she packed her bags, terminated the lease on her flat and left Singapore. “It was very frustrating and very nerve-racking for me, because I couldn’t just wait for my S pass to be approved,” Wong told This Week In Asia. “In case it was denied, I would have no time to pack up two years’ worth of my life.”
Singapore’s economy shrank by 5.4 per cent last year – its worst recession since its independence in 1965 – while total employment fell by the most in over two decades. Yet locals were cushioned from the job losses by the government’s four stimulus packages totalling some S$100 billion (US$74.2 billion).
Wong, whose attempt to switch jobs and get a new work pass early last year was rejected by the government, is among the 181,500 foreigners who felt the full force of job losses.
Indeed, non-residents accounted for the entirety of the island state’s employment decline, and those who lost their jobs formed 4.7 per cent of Singapore’s entire workforce, or 12.7 per cent of its foreign workers.
Low-skilled foreign workers – such as those in construction or manufacturing – were hardest hit, making up some 76 per cent of the job losses, followed by S-pass holders – mid-level technical staff earning a minimum of S$2,500 a month – at 14 per cent. The remaining 10 per cent were employment pass holders who since last year’s changes have to earn at least S$4,500 per month.
However, economists such as Selena Ling, head of treasury research and strategy at OCBC Bank, said the shedding of foreign jobs was not unique to Singapore.
The number of visas Hong Kong issued to foreign professionals dropped more than 60 per cent in the first half of 2020; Kuwait has said it will dismiss half of its foreign staff in government ministries and employ locals instead; and it has been estimated the United Arab Emirates could lose one-tenth of its foreign residents as jobs are cut.
LABOUR CRUNCH
Singapore University of Social Sciences economist Walter Theseira said reducing foreign labour amid an economic crisis was a way of “exporting the societal costs of unemployment to source countries”, as jobless foreigners were likely to return home.
Still, the loss of foreigners could result in a manpower crunch once the economy picks up, according to OCBC’s Ling – though Theseira said some tightness in Singapore’s labour market was desirable for the “near future” as it would encourage employers to consider Singaporeans first before hiring foreigners.
Even though local employment grew, many opportunities currently available in the city state were of the “less desirable” sort due to a job-to-skill mismatch, said Theseira. Some were also temporary or contract roles funded by budget measures, such as the social-distancing ambassadors tasked with reminding people to wear face masks and avoid crowding together.
In the longer-term, economists agree that Singapore, which has just 4 million citizens and permanent residents and is buoyed by more than 1 million foreign workers – 1.43 million in pre-pandemic 2019 – would need to hire talent from all over the world to remain competitive. Theseira said there was “no way” for the workforce to grow or be maintained without immigration. “Fertility is simply too low, and most Singaporeans who are able to work are already in the labour force,” he said.
Besides, foreign talent could also bring in cross-border connections, business know-how, scientific insights and cultural diversity, “which all contribute to Singapore as a global city”, said Deng Liuchun, an economist at the Yale-NUS College. Deng said it was still unclear if high-skilled workers would be reluctant to return to Singapore, where “people see the risk of working for a city state where a pandemic may translate into a real economic tsunami”.
Because of our wages, career opportunities, and high standard of living, there is excess supply of foreign manpower interested in moving to Singapore for work
For some companies operating in cities where visas for foreigners are hard to come by and accommodation is expensive, the pandemic has been a chance to station their headcount remotely.
Music streaming platform Spotify announced in February it was implementing a “work-from-anywhere” policy for all employees, which will remain in place even after Covid-19. This allows them to work from any country and any city. Online payments company Stripe also told employees willing to leave San Francisco, New York or Seattle that they will get a pay cut, but also receive a one-off payment of US$20,000. Meanwhile, a Manhattan Institute survey found that nearly half of New Yorkers earning more than US$100,000 a year said they had considered leaving the city to work remotely from a lower cost location.
DBS senior economist Irvin Seah said he had a hunch this could also happen to Singapore, where higher skilled jobs are performed remotely and headcounts are not stationed in the city state. He sees this as “an opportunity to reduce reliance on foreign workers”.
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Inside Sheng Siong supermarket billionaire Lim Hock Leng’s home in Singapore
QUALITY OF LIFE
Ella Sherman, who works as a property agent at Knight Frank specialising in expatriates in addition to her day job in human resources, said she knew of an expat lawyer employed by a Singapore law firm who left for Britain during the pandemic so she and her husband could be closer to their children who were in boarding school there. She has been able to continue working remotely, but still maintains her home in Singapore as they plan to return.
Sherman said the lawyer’s example was not an isolated one. “Many people are having double lives and double costs,” she said.
Julia Radchenko, regional global mobility lead for Asia Pacific at consulting firm Mercer, said the offshoring of “superstar roles” was still anecdotal for now and she has not seen strong evidence of companies in Singapore doing so. In fact, she thinks talent will continue coming to Singapore, especially given its handling of the pandemic.
“It remains to be seen if big cities will lose their shine. After all they have infrastructure, access to educational and medical facilities, access to physically happening events, access to offices and networking on their side,” Radchenko said. She has noticed that those willing to relocate for work are reconsidering their preferences and “their top picks largely mirror countries’ success in managing Covid-19 outbreaks”.
Radchenko said the US was no longer the world’s most popular work destination “while countries that have managed the coronavirus relatively well such as Japan, Singapore and New Zealand, have enjoyed a popularity boost”.
Added Theseira: “Because of our wages, career opportunities, and high standard of living, there is excess supply of foreign manpower interested in moving to Singapore for work.”
Wong, for example, is still hopeful she can find a job in Singapore and move back. “I have friends, a life, and Singapore has a better quality of life,” she said.
