Foreign firms, trade bodies add their voice to labour crunch

Foreign firms, trade bodies add their voice to labour crunch

SINGAPORE - Foreign business chambers and companies are chiming in with concerns over the tightening inflow of foreign workers, some of which are specific to firms reporting to headquarters abroad.

For most, the challenges lie with higher costs - whether from increased levies, or the higher salaries needed to attract local workers for certain roles.

Tim Phillipi, executive director of the Singaporean- German Chamber of Industry and Commerce, points out that German companies, typically already very productive, are likely to find that the changes to the labour framework have little impact on productivity but could add to costs.

Phyllis Liew, senior human resource manager of the Singapore office of French group SDV Logistics, says that the company expects to pay $350,000 more in foreign worker levies in 2013, purely as a result of the schedule of hikes being rolled out.

It now faces trouble renewing work permits for Chinese nationals and has not been able to obtain training employment passes (TEP) to bring in French interns, she added.

The firm has also found it hard to hire locals as few are willing to work in roles such as logistics assistants.

These problems are compounded as its local suppliers and partners face similar difficulties, Ms Liew said.

Smaller multinationals such as Australian firm SeerPharma, which has been offering regulatory compliance consultancy to the pharmaceutical sector in Singapore since 2004, are also feeling the pinch.

Managing director Belinda Braggs said that her costs have risen significantly, citing how she had to raise the salary of one Filipino employee by a lot in order to renew her employment pass. "It's difficult to get that expertise in Singapore that we need, and Singaporeans also tend to get poached quite easily once they've gained some experience. Foreigners tend to stay for a longer period."

SeerPharma has 11 employees here and its other offices are in Sydney, Melbourne and the UK. "We set up here because the labour laws were easy compared to other countries. But if the laws here become less attractive, I think people will look elsewhere," said Dr Braggs.

Dr Phillipi said that Singapore needs to ensure that German companies can continue to bring qualified staff in to run operations here.

Andrea Bonardi, president of the Italian Chamber of Commerce in Singapore (ICCS), said: "These new regulations are certainly a hindrance to investors, and there are concerns about this which have been voiced informally and formally through various channels by Italian companies."

Many Italian companies here operate in the retail and food & beverage sectors, which have been among the hardest hit by the tightened policies, as Capita Staffing & Search managing director Francis Koh notes.

"Filling these vacancies have proven to be an uphill task for businesses as these industries are unpopular among Singaporeans," he said.

Mr Bonardi, who is also managing director of La Perla Asia, said that Italian retailers here still need to hire Italians for their deeper understanding of the products as well as for better communication with their headquarters in Italy, and have thus found it challenging to recruit suitable employees for certain executive positions.

"The high turnover of local retail staff is pushing salaries upwards. If a person moves every six months for higher salaries, productivity does not increase because productivity comes with learning, but salaries are being pushed up," said Mr Bonardi.

Lee Quane, regional director for Asia at ECA International, a human resources consultancy specialising in international assignees, agreed that the culture in Singapore of frequent job-moves has left employers with little choice but to offer relatively large salary increments to retain employees.

"But if the relatively high rate of increase is not matched by an increase in productivity, this will have an impact on Singapore's competitiveness," he said.

Randstad director of staffing, Anna Clark-Hall, too, said: "The movement in base salary requirements for S-pass holders has led to employers of call centres, junior-middle direct sales staff and retail and hospitality staff to pay a premium to get people into roles. This can disrupt the balance in salaries paid across the business."

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