Requirement for Employers to Consider Qualified Singaporeans before Applying for Employment Pass for Foreigners

Mdm Speaker, to ensure that companies give fair consideration to Singaporeans when hiring, the Fair Consideration Framework (FCF) and Jobs Bank were introduced. So far, almost 20,000 employers have registered more than 72,000 active job postings with the Jobs Bank, drawing 110,000 local job seekers to register as well.

On the whole, it has led to a fairer hiring process and easier access to job opportunities. Notwithstanding this, the Ministry of Manpower (MOM) is making further enhancements to send a clearer and stronger signal about fair consideration for Singaporeans. As announced last week, we are making further refinements to take effect from 1 October 2015. This includes publishing the salary ranges of job vacancies, closer scrutiny of EP applications for companies with a weaker Singaporean Core relative to others in their industry, and more stringent quality assessment of EP and S Pass applicants.

For example, companies with weaker Singaporean Core will be required to provide additional information, such as the number of applications from Singaporeans, how many were shortlisted, and the interview outcomes. We may also require some of them – what I call the "double weak", weak Singaporean Core and weak commitment to fair consideration for Singaporeans – to commit to plans to strengthen their Singaporean Core.

Working together in partnership with the industry, agencies and the Labour Movement, our four core priorities are (a) to strengthen our competitiveness and sustainability, (b) by becoming more manpower lean, (c) with a stronger Singaporean core, and (e) better quality foreign manpower. These are important priorities as we reposition our economy for future growth.

Mdm Speaker, I would like to thank the Minister for the slew of enhanced measures announced last week to strengthen the Singaporean Core amongst PMEs, especially the Career Support scheme. Madam, I have two supplementary

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questions for the Minister.

One, with the intention to scrutinise EP applications for whether or not Singaporeans were fairly considered, would the Minister please elaborate how the Ministry will ensure qualified Singaporeans are not passed over for jobs just because foreigners are willing to accept a lower salary and employers do not need to contribute to their CPF?

Two, in MOM's announcement, it mentioned an expectation for firms to systematically develop their Singaporean PMEs. So, that was a statement. That was great. Would the Minister please elaborate how MOM intends to achieve this and whether the Minister would consider a system where the approval of selected EPs are tied to a localisation plan, with clear commitments from the firms to invest in the training and development of Singaporeans to fill these jobs in the future? This scheme will be especially helpful in sectors currently dominated by foreigners.

Mdm Speaker, I was at Geneva last month to attend the International Labour Organization Conference. The Director-General of the ILO Mr Guy Ryder hosted a dinner for the manpower representatives of the G20 countries. We are not a G20 country but I was invited because Singapore is an observing country for this year's G20 Meeting to be held in Turkey.

The manpower representatives from these countries discussed the challenges faced in the areas of jobs and employment. My conclusion is that countries all over the world, including the G20 countries, the more developed countries, will all face three challenges. Firstly, jobs deficit – not enough jobs in many countries, leading to high unemployment, including youth unemployment. Secondly, skills deficit – not enough skills in the workforce, leading to structural unemployment; structural mismatch, again in many countries. Last but not least, quality deficit – jobs are being created but not of good enough quality; as a result, many PMEs are being under-employed. These are the three key challenges facing all countries, including Singapore.

I would say that if you look at today's situation, we are doing much better, compared to many other countries. We do not have a severe youth unemployment challenge. Unemployment rate among our PMEs is one of the lowest in the world, at about 2.6% to 2.7%. Under-employment, we have been able to create good paying jobs in sufficient number for our people. For example, if you come to our Jobs Bank, of the 72,000 vacancies I talked about, more than half of them are PMET jobs; in fact, about 50,000 of them. In other words, we do not really have the three deficits as faced by many of these countries.

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As we move forward, as I had mentioned earlier, we do want to strengthen the Singaporean Core to ensure that all sectors of the economy can sustain growth into the future. Therefore, whatever measures that we introduce, we must bear in mind, firstly, it must not weaken our competitiveness so that we can continue to create enough good paying jobs; secondly, continue to strengthen the capability, the skill profile of our local workforce so that we do not have the structural unemployment challenge.

In other words, as we move forward, we are identifying, in particular, two target groups. The first would be companies with a weak Singaporean Core relative to the rest of the industry. As I had mentioned earlier, for this type of companies, I have no choice but to make the employment of EP holders for these companies more difficult. Because if they have a weak Singaporean Core relative to the rest of industry, and at the same time, they do not demonstrate stronger commitment towards fairer consideration, I would have no choice but to make the process more difficult until they are prepared to work together with us to find ways to strengthen the Singaporean Core.

There is another consideration. We noticed that in some sectors, the overall Singaporean Core is relatively weaker than in other sectors. For those sectors, MOM will work very closely with the relevant economic agencies to understand better why is it that for these sectors, the Singaporean Core, on the whole, is relatively weaker than the other sectors. We will work with the economic agencies to see what more can we do under the SkillsFuture initiative led by Deputy Prime Minister Tharman to enhance the skills upgrading of the manpower, sector by sector. Hopefully, over time, while with one hand we strengthen the supply of local Singaporean Core through SkillsFuture, at the same time, through the Fair Consideration Framework to strengthen the demand for a Singaporean Core. We believe this is the best way forward.

Madam, I wish to ask the Minister to clarify how successful has the Fair Consideration Framework been in having Singaporeans considered fairly for PME jobs since its implementation a year ago.

Mdm Speaker, the requirement to advertise jobs with the Jobs Bank was introduced in August last year. So, it has been implemented for almost a year. The MOM has looked at the overall picture. We are happy to say that, by and large, most employers do show enough commitment, in terms of giving Singaporean job applicants fair consideration.

However, we have noticed that there is a small group of employers, as I had mentioned earlier, whose current Singaporean Core is not as strong, relative to the rest of the industry. Of greater concern to us is that they do not seem to demonstrate enough commitment to fair consideration. For example, some of them, the moment they fulfil the 14 days' commitment, within a week, they will come to MOM to submit their EP applications. So,

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these are the cases which we wonder whether they have really gone through the proper process because we do not believe that they can clear the queue of applications and interviews all within a few days.

Another very common feedback that we receive is that many of the Singaporean PMEs have this feeling that some organisations, because the HR directors are foreigners, as a result, they are giving preferential consideration to foreign PMEs especially those coming from the same countries. MOM takes this seriously. In fact, this is an area I am looking into as well, trying to identify companies where the Directors of HR are foreigners and, at the same time, there is a high concentration of EPs from the same country sources. I am not accusing them of being biased, but I would just like to convince myself whether this concern by many PMEs is founded or unfounded. If they are founded, then obviously, as I had mentioned earlier, this will be companies that we would like to work with closely to ensure that they exercise fairer and more progressive HR policies and practices.

Madam, a clarification. I would like to ask the Minister whether the Singaporean Core in a company will now be a factor in considering applications for Employment Passes.

Mdm Speaker, the answer is yes. As I had mentioned earlier, we are now targeting companies with this "double weak": weak in Singaporean Core relative to industry and, at the same time, do not demonstrate a strong enough commitment to give Singaporean workers fair consideration.

Thank you, Madam. Madam, I welcome this new initiative by MOM to consider the Singaporean Core in the company. I would like to ask how MOM determines whether a company has a weak or strong Singaporean Core and how does the new factor or framework of Singaporean Core in a company work into the application for Employment Pass and in consideration of approval by MOM.

Mdm Speaker, as I had mentioned earlier, the strength or weakness of a Singaporean Core in a particular company, on the part of MOM, we will look at it within the context of the industry. For example, if in the industry, the Singaporean Core is "x" percent, but for companies where the Singaporean Core is a lot lower than "x" percent, those will be the ones that we perceive as having a weak Singaporean Core.

Secondly, as I had mentioned earlier, before they can apply for an EP under the Fair Consideration Framework (FCF), the company will have to advertise the job and, now, including the salary as well, in our Jobs Bank. After the 14 days, Singaporean job applicants who are interested in those jobs would have applied for the jobs. What we are doing, moving

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forward, is that for companies with a weak Singaporean Core, we will be asking them questions like, for example, "How many job applications did you receive?" For example, if they do not receive enough job applicants, it could mean that either the jobs are not attractive or maybe there is a shortage of skills in Singapore. That is where, under the Sectoral Manpower Development Plan, we will find ways to strengthen the Singaporean Core. So, that is the answer.

Thank you, Madam. I would like to ask the Minister on the point that he made about being able now to identify situations where there is this "double weak". The Minister mentioned earlier that for companies with a weak Singaporean Core, MOM will monitor them and then they may be required to impose tighter EP hiring restrictions. I agree that that sounds like a very good system.

What it sounds like to me is that MOM is beginning to exploit the potential for using the Jobs Bank as an early warning kind of monitoring system so that you can see areas where there may be issues with hiring in future. One of the key challenges the Minister mentioned earlier was skills deficit. Would it be possible, do you foresee using this system to identify where a skills deficit may develop in time, even though there is not a skills deficit currently at this point in time?

Secondly, if you are able to accurately develop a system so that it can capture this kind of information for your own use, would you be expecting companies to find this information helpful in the future?

Mdm Speaker, the answer is yes. In fact, we believe that by a closer analysis of the Jobs Bank as well as the response rate, we would be able to identify any early signs of a skills deficit. When those are identified, firstly, we will share the information with the sector. We do have more than 20 Sectoral Tripartite Committees set up to look into the manpower development plan, sector by sector. So, those information will be shared with the tripartite partners.

At the same time, MOM will also be looking into how we can support those companies that are able to help us to transfer the know-how, the capabilities, to our workforce over the near term. For example, if we have identified that certain areas of skills are in significant deficit, and if we feel those sources of expertise are available out there somewhere in the world, we would like to work with companies to bring those expertise to Singapore and put in place a know-how transfer programme so that, over time, this skills deficit can be narrowed.

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Mdm Speaker, I applaud the measures that the Minister has introduced. I am equally sure that there several companies or corporations which have developed a strong Singaporean Core. So, I wonder whether the Minister could also find ways to recognise and publicise them, and also get them to share the stories of how a strong Singaporean-core has helped them in their business. I am looking more at the more positive parts as well. I think this will be useful.

Mdm Speaker, I thank the Member for this suggestion. In fact, what MOM intends to do is to, on the one hand, take firmer action against the "double weak" employers and, at the same time, exactly as mentioned by the Member, to profile companies that are adopting the more progressive, not just fair, but progressive employment practices. We do intend to conduct a series of what we call "Learning Journeys", so that the agencies, companies from the same industry, can learn from the progressive practices of the good employers, so to speak.

Madam, I am very supportive of the Singaporean Core initiative. But on the other hand, I would just like to understand better if all these efforts of getting the EP are making the employers' job more onerous and more difficult, and whether there is a change in image about Singapore being a friendly country for investments, and also, in the long term, whether it will have an impact on us being a more competitive economy, compared to the regional countries which are also developing.

Mdm Speaker, I thank the Member for pointing this out. It is a very important point. Let me emphasise again, I mentioned earlier about making the application for EP more difficult, but it is only for the "double weak" employers. Based on MOM's observations, the vast majority of the employers are progressive and they do give fair consideration to Singaporeans. Therefore, only a small group of employers will be affected. We are also engaging them in a positive way. So far, in the last 10 months or so, we have identified about 150 employers belonging to this category of either "single weak" or "double weak", and we are working very closely with them, in some cases, through the relevant economic agencies and, in others, between MOM and these companies.

I fully agree that it is important that we continue to maintain the competitiveness and attractiveness of Singapore because, otherwise, we are going to have a jobs deficit challenge. Therefore, I want to assure the business community that we will always be friendly towards employers that adopt fair and progressive employment practices.

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