No More Foreign Workers

Singapore Must Become A Global "Talent" Hub

The Singapore economic growth model is based on the dependence on foreign workers. Economists generally agreed that decades of dependence on foreign workers have acted to foster low productivity and depress the wages of low-income Singaporean workers.?The Singapore government has also acknowledged that Singapore should reduce its foreign workers' dependence, instead of their complete elimination.?

The conventional legacy belief is that foreign workers are needed for the low-wage, manual labour jobs that Singaporeans are unwilling to do in areas like construction, security, and cleaning. ?Low fertility rates and a shrinking domestic population also mean that it is increasingly daunting and well-nigh impossible to find Singaporeans willing to take up these roles.?

The 1.23 million foreign workers in Singapore today make up close to 20% of the country’s population of 5.89 million people, of whom about 2.5 million Singaporeans and Permanent Residents are in the workforce.?About 350,000 foreign professionals hold either an Employment Pass (minimum S$4,500 monthly salary) or S-Pass (minimum S$2,500 salary), and nearly all the rest are work permit holders in low-wage, low-skilled positions, including domestic helpers, earning less than S$1,500 before overtime. [Note - US$1.00=S$1.35].

From a market-based perspective, there is no job that cannot find the workers to do them.?There are however salary levels at which no one would work for.?The key is to recognize the real labour value of jobs that very few Singaporeans are willing to work for, and just pay adequately to attract the desired workers.

In 1982, when Singapore first imposed a levy on employers for employing foreign workers, the policy intent was to eventually develop an all-Singaporean workforce by 1992. ?Lower-skilled foreign workers were actually intended to be phased out by 1992. ?

It is unknown why the policy was subsequently abandoned and resulted in the massive influx of semi-professional and mostly lower-skilled foreign workers. ?Low-wage policy anchored on the influx of low-skilled foreign workers is never a long-term sustainable industrial development strategy.?It distorts labour markets through depressing local wages permanently by pitting locals against foreign workers.?

The inevitable loss of Singapore manufacturing jobs in recent years to actual cheap labour of emergent developing countries eg Malaysia, Vietnam, Myanmar, Africa, Thailand, Indonesia also stranded our lower-wage workers as well as PMET (professionals, managerial, engineering, and technical) workers who were ill-prepared to take over jobs held by foreign professionals. ??

The resultant illusion of low labor costs attracts massive foreign investments in the face of increasingly higher costs of living.?The better alternative, if we had embraced the lessons from Japan, is to promote and enhance labour value ie pay more, to complement other social, political, economic, and infrastructural factors more attractive to foreign investments. A high-wage economy also drives higher standards and costs of living, which are the only sustainable drivers of overall prosperity. ???

Just look at Japan for a worthy example to emulate. ?As Japan industrialised in the 50’s and 60’s, wage levels rose with productivity gains powered by human and technological innovations to make the Japanese worker the most productive, disciplined, and highest income earner in East and South-East Asia by the ’70s. ?Japan’s key decision in the 50’s not to deploy her female workforce in the industry and manufacturing resulted in acute labour manpower during her growth to drive up workers' earnings through critical productivity innovations and the use of technology eg automation, robotics, lean methodology, and 6-sigma mindsets. ????

Not all foreigners working in Singapore are talents that cannot be found here.??

Granted, many are in jobs that Singaporeans are unwilling or unable to take on. Singaporeans can however be trained to do them for the right wage, and employers can be incentivized to invest and employ Singaporeans. ?Many are also recruited here by their friends who are more comfortable with co-workers of similar cultural and ethnic origins.?

Case in Point: In a previous company in the Oil & Gas Industry, the Marketing Chief, an American himself, once hired a marketing sales executive for our engineering equipment but who could neither distinguish a valve from a thrust bearing.?It was found out later that they became acquainted with each other at the American Club.?Qualified local engineers were not considered for the sales position because, according to him, “Our customers preferred to deal with non-Asians whites”.?This was rather strange considering that our key customers were Indonesians and Middle Easterns!?????????

That Singapore needs talents, and that we will never have enough homegrown ones, is an accepted fact of life.??

The uppermost concern of Singaporeans is that we should encourage only the talents that are truly needed, either in areas where we do not have enough or where there is none at all to be found locally at the moment.?Eventually, any Singaporean can be trained and educated to take on any good-paying job.

Another story familiar to Singapore corporate watchers: a major company hired a high-level foreign European CEO who immediately began to improve the company’s earnings by closing down branches and instituting various new service charges as well as increasing existing ones.?The company’s cash position did improve somehow resulting from these moves.?Many customers also left due to the higher prices they now have to pay without corresponding improvements in undelivered value propositions.?At the year-end, the company’s overall profits were in the red.?The lessons here were that any local senior executive could have instituted that same cost-cutting and revenue earning measures.?The foreign CEO should, at the very least, have created new businesses from new areas from his foreign experience and supposedly unique business contacts.?Understandably, he was replaced by his local deputy, who could have made a better CEO from the get-go.

We need to stop our self-loathing tendency when it comes to human talent.

The self-loathing term “foreign talent” has unfortunately and inadvertently excluded our local talents by default in favour of the rest of the world. ?By advocating a self-loathing desire for “foreign” talent, we may have also unwittingly disqualified our very own talents who are presently “foreign” talents in other countries.?

There are more than 200,000 Singaporeans currently working overseas in senior professional positions with world-class companies.?They are also our “international” talent, as many of their fellow citizens at home.

On a business visit to South Korea some years back, I discovered that many South Koreans actually returned home after the 1998 economic crisis to provide the needed international management experience that was required to help many Korean companies survive and overcome the crisis. Many of those who returned were already working in very senior positions in major US and European companies. The subsequent Korean economic recovery is now legendary.?We should also make conscious attempts to draw Singaporean “international” talents home, where they are crucially needed. ??

The critical emphasis is on the promotion of “talent” development; our schools and educational institutions should aim to develop every Singaporean to be global talents befitting the local and international marketplace.?In other words, Singaporeans should be developed to become international talents so that they could give the visitors a good fight for any job positions here, and everywhere.???

It is the urgent imperative to distinguish and use the term “international” talent instead of “foreign” talent in our continual emphasis to make Singapore the global talent hub for investments, business, and living. ?

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