According to the Singapore Contractors Association, the recent government’s move to increase the levies and lower the foreign worker quota have threatened the survival of contractors mainly in the construction field. This complaint about the manpower crunch has been reflected by businesses across all industries which have relied heavily on cheap foreign labor for survival. However the disconnect is that Singapore’s population has actually increased to 5.23 million today, or 25% more than 12 years ago in the year 2000.
So why are there less labor when there are more people? One key reason is the increasing cost of living in Singapore. Salaries are largely depressed by the loose labor market, as such, the rise in salaries do not commensurate with inflation hence lowering purchasing powers of employees in Singapore. Inflation in Singapore is also largely brought upon by the high demand propped up by the number of people. Also with the slight tightening of labor market, employers have no choice but to look to Singaporeans and PRs for labor. However Singaporeans and PRs have massive financial obligations, most notably the housing market. Unlike foreign workers, Singaporeans and PRs buy their own flats and hence undertaken a large amount of mortgage loan to serve. Salaries that couldn’t afford paying off the house especially those in the lower end jobs are out of the residents’ considerations. Employers in Singapore will continue to have a hard time finding employees if they do not pay right.
Another key reason to the current manpower crunch is the competitive offers by bigger companies. Job seekers are not attracted to puny remunerations offered by contractors, the Multi-National Companies(MNCs) have more to offer – with a pantry full of free drinks and food becoming the norm in MNCs like Microsoft and Facebook Singapore. Even the Civil Service pays better than contractor companies with quarterly bonus, performance bonus and a sure-have annual bonus. Contractor companies in Singapore generally do not pay 13th month bonus and the bosses are usually wealthy businessmen while their employees barely scrap by for a living. Job scopes in bigger companies are well-defined and their employees are often given greater autonomy in their work, but Singapore contractors expect their employees to put on different hats and are often subject to micro-management with all the dos and do-nots. The contrast in employment treatment varies too much for a similar job scope, it is no wonder Singapore contractors couldn’t find the right employees. MNCs usually adopt visionary work philosophies like Kaizen, sending their employees for improvement courses while small contractors do away all these “time-wasting” exercises with myopic business outlooks believing employees are paid to work. Not only the human-resource management differs, profit-distribution also varies greatly. The bosses of Singapore contractors are only interested in getting rich, while the bigger companies believe in growing the business and investing in their people.
Singapore contractors has enjoyed a good sail because the PAP government gave them too much leeway during the 2000s. None of them have prospered, innovated and grown into a MNC. Most of them have the crutch mentality always asking for the government for more foreign labor quota, more tax reliefs and other pro-business policies. In the recent control on foreign workers, some contractors threatened “folding up” and refusing to raise productivity according to the media interview by ChannelNewsAsia [Source]. The PAP government is unlikely to give in, given their lowest ever vote counts in the recent election.