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The S-Pass way to productivity
FROM July 1, the salary threshold for S-Pass holders will be raised from $1,800 to $2,000. Manpower Minister Gan Kim Yong said in Parliament earlier this month that, in doing so, the wages of this middle tier of foreign workers - who currently earn between $1,800 and $2,500 a month - will keep pace with salaries of local workers which have gone up over the years. Analysts agree that the time is right to revise the qualifying income for S-Pass holders which has not been adjusted since 2004.
The news is positive on many levels, not least of which is its expected beneficial effect on productivity. As wages of S-Pass holders will now be more aligned to the salaries of local workers, employers should be more able to choose the best workers based on merit and their contributions to the company, regardless of their nationality. Also, as employers cannot continue using the excuse that foreigners are cheaper to hire, they may in the long term be weaned off their reliance on foreign labour.
With the adjustment, the Singaporean worker could also expect to receive more competitive remuneration, say analysts, as companies may raise wages of existing local staff to be on a par with what foreigners are getting.
There are some weak links though. This equation does not take into consideration the common lament that Singaporeans still shun work that S-Pass and work permit holders take up - in particular, positions in the retail, health-care and construction sectors. Also, with Singapore enjoying close to full employment, there is a widely touted skills substitution dilemma - it is unclear if the new measures will push more local workers to move into new industries, or even stay longer in jobs commonly taken up by S-Pass holders.
Employers will also be feeling more heat as the move comes on the back of a rise in foreign worker levy rates, forcing them to fork out an average of $240 more a month in levy for each S-Pass holder between now and July 2013.
The measures also do not address work permit holders, who earn salaries of less than $1,800. This sector will continue to prove problematic as jobs as waiters and in the construction sector will remain too lowly paid and unattractive to most Singaporeans. For these, employers will have to bite the bullet and start thinking out of the box, whether through the ramping up of productivity, more innovative work configurations or lifelong training.
FROM July 1, the salary threshold for S-Pass holders will be raised from $1,800 to $2,000. Manpower Minister Gan Kim Yong said in Parliament earlier this month that, in doing so, the wages of this middle tier of foreign workers - who currently earn between $1,800 and $2,500 a month - will keep pace with salaries of local workers which have gone up over the years. Analysts agree that the time is right to revise the qualifying income for S-Pass holders which has not been adjusted since 2004.
The news is positive on many levels, not least of which is its expected beneficial effect on productivity. As wages of S-Pass holders will now be more aligned to the salaries of local workers, employers should be more able to choose the best workers based on merit and their contributions to the company, regardless of their nationality. Also, as employers cannot continue using the excuse that foreigners are cheaper to hire, they may in the long term be weaned off their reliance on foreign labour.
With the adjustment, the Singaporean worker could also expect to receive more competitive remuneration, say analysts, as companies may raise wages of existing local staff to be on a par with what foreigners are getting.
There are some weak links though. This equation does not take into consideration the common lament that Singaporeans still shun work that S-Pass and work permit holders take up - in particular, positions in the retail, health-care and construction sectors. Also, with Singapore enjoying close to full employment, there is a widely touted skills substitution dilemma - it is unclear if the new measures will push more local workers to move into new industries, or even stay longer in jobs commonly taken up by S-Pass holders.
Employers will also be feeling more heat as the move comes on the back of a rise in foreign worker levy rates, forcing them to fork out an average of $240 more a month in levy for each S-Pass holder between now and July 2013.
The measures also do not address work permit holders, who earn salaries of less than $1,800. This sector will continue to prove problematic as jobs as waiters and in the construction sector will remain too lowly paid and unattractive to most Singaporeans. For these, employers will have to bite the bullet and start thinking out of the box, whether through the ramping up of productivity, more innovative work configurations or lifelong training.
