Hiring restrictions must not slow Singapore's IT industry

Policies aimed at regulating the influx of foreign workers, including IT professionals, need to be balanced and should not affect the local IT industry's overall competitiveness.
Written by Jamie Yap, Contributor on

The Singapore government is looking to balance the need to hire skilled IT professionals from overseas and leveling the playing field for local ones. Industry observers believe measures introduced to regulate hiring are a "positive step" but maintained that any policy must ensure the overall IT industry's competiveness is not compromised.

One of the main talking points in last month's Budget debates held in the parliament was how to ensure the interests of Singaporean PMEs (professionals, managers and executives), including those in the IT sector, are protected amid festering resentment over competition with foreign workers for higher-paid jobs.

Reuters reported in March that alleged bias against locals accounted for half of the employment-related complaints received in the country last year, according to data provided by the Tripartite Alliance for Fair Employment Practices (TAFEP).

Measures to curb hiring of skilled foreigners in Singapore will help local IT professionals but these should not be at the expense of IT industry's competitiveness.

The government has since pledged to address the issue to ensure citizens come first, such as reviewing the Employment Pass framework and eligibility criteria, and increasing scrutiny over companies' hiring practices. The Employment Pass (EP) is a work visa issued to foreign PMEs allowing them to work in Singapore.

Acting Manpower Minister Tan Chuan-Jin underscored the government's stance in his parliament speech on March 14, saying: "We do not require global firms to give preferential treatment to locals, but they must be fair to Singaporeans. There must be equal opportunities for our people, whether at hiring or in advancement. There has to be a level playing field."

Currently, there are approximately 8 in 10 IT professionals who are Singapore residents, the Infocomm Development Authority of Singapore (IDA) stated. IDA is the local regulator for the country's infocommunications technology (ICT) sector.

Tough balancing act

Industry observers said that whatever steps the government decides to take, these must balance the needs of employees and employers, or it might affect the overall competitiveness of the local tech industry.

Tan Teng Cheong, vice president of the Singapore Computer Society (SCS), for one, said the government's measures are a "very positive step" going forward.

"Singapore has an excellent IT education [program] going all the way up to the tertiary level, and we have talent with good, relevant skills and experience. We need a level playing field where locals must always be given first priority, all else being equal," Tan said.

Lau Shih Hor, chairman of SME (small and medium enterprise) liaison committee at the SCS, pointed out that while the government's aim is to ensure good hiring practices and protect the wellbeing of local employees, the IT industry is one that is by nature global.

This means any increase in operational costs of companies will directly affect IT competitiveness at home and elsewhere, Lau explained.

For example, should there be a greater demand for local IT talent, the IT industry will be negatively impacted as these workers may expect a higher pay without a commensurate increase in productivity. "This cost escalation is purely due to policy change," he stated.

The possibility of a higher salary could also prompt more local workers to routinely switch jobs for a pay hike as they take advantage of the greater demand. This may result in a "double whammy" of increased salary costs and higher staff turnover, further undermining the competitiveness of IT companies in Singapore, Lau cautioned.

So the key question for policy-makers is how to mitigate the risks and side effects of measures aimed at ensuring fair employment practices among companies here, he said.

Only the best will do

Human resource (HR) executives also noted the mooted measures may still be insufficient in closing the gap between filling jobs with ideal employees in the IT industry.

Serge Shine, Southeast Asia managing director at IT recruitment firm Spring Professional, said there will be "knee-jerk reactions" at the beginning as companies cope with changes in the hiring process. But this would fade in the longer term simply because IT talent shortage and the war for talent will remain.

"Companies already have to be creative and flexible in workforce planning today," he pointed out.

Chris Mead, regional director for Singapore and Malaysia at Hays, said if the government focuses on the needs of employers and the skillsets needed to grow businesses, then the impact will be "absolutely positive".

However, if the employment measures are only about making it tougher for foreign IT professionals to find work in Singapore, then it could potentially slow the tech industry down as companies might not hire at all.

Mead said: "Companies loathe to hire second best. If someone from abroad has all the skills and cannot be employed here, it doesn't mean the company is willing to hire a local with 50 percent or 60 percent of the required skills.

"When any organization hires, the underlying premise is they want the best person for the job with the right skillsets, at the right time and the right price. Whether that person is a Singaporean or not isn't taken into consideration."

This recruitment mindset is practiced at companies such as search giant Google.

A company spokesperson told ZDNet Asia: "At Google, we believe in hiring the best talents for each position no matter where they're from. Of course, this includes Singaporeans who work both in our Singapore office and any of our offices around the world."

Equip ahead of the curve

Mead added that Singapore has a small population with a diverse employment landscape from IT to hospitality and life sciences, which makes it "impossible" to have all the skillsets to meet every company's demands all the time. As such, employers will have to look outside for manpower, whether foreigners or returning Singaporeans, he said.

If anything, the mid- to long-term answer to helping ensure Singaporean IT professionals are sought after by companies regardless of employment rules is to groom local talent early and ahead of the demand curve, he suggested.

"Back when Java first came to the scene, how many people could you find in Singapore who already had at least 10 years of hardcore Java development experience?" he questioned.

Various IT vendors have pushed initiatives in Singapore focused on grooming talent in the latest IT developments such as cloud computing. In July last year, networking giant Avaya collaborated with Singapore's Institute of Technical Education to develop a unified communications technologies center that will provide students with hands-on training in communications technologies. Also, in 2011, Singapore Polytechnic opened the SPE3C3 (Singapore Polytechnic Electrical and Electronic Engineering Cloud Computing Center) in collaboration with Cisco Systems, Citrix Systems and NetApp, to train students to be datacenter specialists.

An IDA spokesperson said it will continue to develop Singapore's local infocomm workforce for high-end, high value-adding jobs, and respond accordingly from an industry perspective.

He added IDA works with the Ministry of Manpower (MOM), Workforce Development Agency (WDA) and other industry associations to encourage the ICT industry to adopt best practices in talent management.

Both employers and employees can refer to the National Infocomm Competency Framework (NICF), a career development and training guideline for more information, the spokesperson said.

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