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increased minimum wage for EP-effective at saving Singaporean jobs?

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Old 27-04-2013, 02:26 PM
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Default increased minimum wage for EP-effective at saving Singaporean jobs?

I recently read tt the minimum wage for EP will be raised, P1 to $6000, P2 to $4500, Q1 TBC.

Do you think this measure will make more companies employ more Singaporeans over FT or companies will prefer to pay more to keep the FTs?

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Old 27-04-2013, 05:13 PM
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Here is my take on the matter:

I work in the IT industry. This is an industry infested with FT. In the last 2 years, I moved from a struggling SME (startup with millions of foreign VC money but still generating significant losses) to an industry-leading MNC.

Struggling SME
1) To begin with, no Singaporeans were even submitting their resumes. We went to NTU/NUS career fairs and all the undergrads/postgrads submitting resumes were all foreigner studying in sg. Where are all the local IT students?
2) We typically hired foreigners by having coding contests organised by our VC. We would invite the winners to have a chance to interview.
3) Raising of EP min salary was a big concern. MOM told us specifically that to get an EP approved we had to raise out minimum salary to 4500. It was hard to justify raising our salary when the company was still generating losses.
4) Sometimes our EP submitted were rejected by MOM. We would then talk to our VC who knew government contacts to get the visas approved on a case-by-case basis. This didn't happen very often.
5) Companies now has about 40 staff in Singaporean. All on EP. There are no more Singapore-bored Singaporeans in this company. Even HR, Finance, admin folks are foreigners.

Industry-leading MNC:
1) We offer fresh grad software engineer starting pay of SGD5k+. We don't even ask about your visa status when applying for job.
2) However we don't have many openings for fresh grad. In a given year, we only hire 2-5 students.
3) Typically, we hire mostly experienced hires or internal transfers. Most of the internal transfers are from India and we bring their pay to singaporean levels. Definitely not underpaid.
4) Most of the staff are non-singaporeans.
5) During NTU/NUS career fairs, 90% of resumes submitted are foreigners studying at local uni. Where are all the local IT students again?

For a struggling SME, the increased EP requirements will have a significant impact.
For an MNC with lots of money, the new EP requirements will not make any difference. Our offering salary is already significantly higher than MOM guidelines.

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Old 27-04-2013, 11:44 PM
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Thanks for sharing. Looks like the SMEs still bear the brunt of the changes due to limited capital compared to MNCs.

These govt measures look wonderful on the surface but I wonder if this will lead to more SMEs folding up and reducing number of jobs available overall.

But i suppose different sectors are impacted differently. Would it be too much of sweeping statement to say manufacturing industries are not affected much by rise in EP min pay as their issues lie more with finding FWs to do lower skilled job rather than FTs to manage the process?

Besides IT and financial industry, will these govt measures affect other industries?

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Old 27-04-2013, 11:55 PM
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I think high-end manufacturing like pharma drugs will survive in Singapore. People are willing to pay a premium for a cancer drug to be produced in Singapore vs India. These industries can easily pass the increased labor cost back to the consumers.

However, low-end manufacturing is doomed in Singapore.


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Old 28-04-2013, 04:05 PM
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I'm working in IT as well. Used to be from a MNC but now I'm self-employed. My views is the same as the dude above, likely because we are in same industry and saw the same thing.

My take on this is that MNC will increase salary for foreigners. Reason being that, at least in IT industry, foreigners generally tend to be more skilled then locals in IT. Indians and Chinese are well-known to be good programmers. A good programmer can get a project done in half the time as an average local joe, and even with lesser bugs. If I am a company, would I pay him one more grand per month? YES I WILL. Productivity is important.
At least in IT industry, skills is important. For a MNC, one grand additional for a skilled foreigner is a no-brainer. They will pay for it.

However, this increased in criteria will hit SMEs hard. They have few locals applicants, and now hiring a foreigner will cost more than a local. It just doesn't make sense as much.

This applies to engineering industry too, which will be harder hit with the increased in production cost and now, manpower cost.
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Old 29-04-2013, 10:18 AM
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I am from the electronics engineering sector, R&D/contract manufacturing/electronic trading.

Our small company is 100% singapore born singaporean. everyone served NS except a lady from marketing. The reason for this is because local are cheaper and easier to hire, deg starts from 2.45k, dip is even lower, much*

total hiring cost = 2.45 * 116 = 2.8+k approx still cheaper then 3k

Any total cost above 3k and FTs will come in. It just makes more business sense when doing the math.

Not to mention the savings due to not having the additional labor involved when doing the Q1 EP blar.

The coy can hire people meh? well, it is still running and operational as of today
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Old 29-04-2013, 12:46 PM
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I can't believe an NTU/NUS engineering grad will be willing to accept a 2.45k starting salary. Are the hiring the bottom 5% of the graduating class?
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Old 29-04-2013, 01:00 PM
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Quote:
Originally Posted by Unregistered View Post
I can't believe an NTU/NUS engineering grad will be willing to accept a 2.45k starting salary. Are the hiring the bottom 5% of the graduating class?
You will be surprised at how desperate fresh grads will get after months without job. Especially those that are big spenders/on loan/no rich parents...

I personally know someone from NTU civil eng, 3rd cls accepting a 2.1k starting pay for 5 and half day work week, his reason? Free pickup to drive around and $120parking allowance... wtf?

I guess there wasnt much choice, he send >1000 resumes, and attended at least 1 interview / week for 7months.


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Old 29-04-2013, 04:49 PM
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Nowadays engineering grads who make it to MNC are getting 3.6-4.2k, but must avoid rubbish sectors like electronics, semicon, constrution industries etc
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