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Is it true that companies in Singapore can only hire local employees?

Not at all. Singapore, as a pro-business and highly competitive nation, maintains an open attitude towards global talent. The labour market welcomes top talent from around the world. At the same time, Singapore actively encourages employers to consider hiring local employees fairly during recruitment. To promote fair employment practices, Singapore established the Tripartite Alliance for Fair and Progressive Employment Practices (TAFEP), which helps employers and employees understand and adopt fair and progressive practices while ensuring compliance with employment regulations.

What are the key strengths and characteristics of Singaporean talent?

• Strong bilingual proficiency, with English as the primary language.
• High tertiary education attainment rate.
• A culture of world-class professional management.
• High talent costs, with starting salaries for university graduates ranging from SGD 3,000 to 6,000.
• International outlook with strong cross-cultural communication and collaboration skills.
• Suitable for regional and global market expansion.

What is the Employment Act in Singapore?

The Employment Act is a key labour law in Singapore that establishes the basic terms and conditions of employment for covered employees. For foreign employees holding work permits, the “Foreign Employee Employment Act” also applies, outlining the responsibilities and obligations of employers when hiring foreign staff. Once local or foreign employees sign an employment contract with their employer, they are protected under the Employment Act.

What steps are involved in hiring foreign employees in Singapore?

When hiring foreign employees, companies generally need to follow these steps:

• Job Advertising: Post job advertisements on recognized platforms for at least 14 days.
• Interview and Evaluation: Ensure local candidates have a fair opportunity and evaluate candidates based on the job requirements.
• Work Pass Application: Complete processes including obtaining an IPA Letter, conducting a medical check-up, receiving the work pass, and onboarding the employee.

What obligations do employers in Singapore have towards employees?

• Detailed Payslips: Employers must provide all employees covered under the Employment Act with detailed payslips.
• Central Provident Fund (CPF) Contributions: Applicable for Singapore citizens and permanent residents.
• Foreign Worker Levy (FWL): Payable for WP and SP holders but not for EP holders.
• Skills Development Levy (SDL): Used to support employee participation in continuing education and training programs.
• Income Reporting and Tax Clearance: Employers must prepare tax forms for employees annually and submit an IR21 form for tax clearance if an employee is leaving Singapore or relocating overseas.

What should be considered when drafting job advertisements?

• Company Introduction: Include an English version of your company profile to help overseas talent understand your corporate culture.
• Job Titles: Ensure the job titles align with local conventions to avoid misunderstandings caused by poor translations.
• Job Requirements: Comply with the fair employment practices outlined by TAFEP, avoiding unnecessary restrictions.

The core principles of fair employment practices outlined by TAFEP include:

• Employers should not use age, race, gender, religion, marital status, family responsibilities, or disabilities as primary considerations for hiring and selecting employees.
• Implement forward-looking human resource management systems to respect and treat employees fairly.
• Provide equal training opportunities.
• Reward employees based on their abilities.
• Comply with the regulations outlined in the Employment Act and adopt the TAFEP guidelines.

Key points for Enterprises Hiring in Singapore

Overtime Requirements: Job advertisements mentioning overtime requirements may deter candidates. Most candidates prefer an eight-hour workday on weekdays. Requiring overtime upfront can lower job appeal and slow down the recruitment process.

Educational Requirements: While it is common for Chinese graduates to pursue a master’s degree immediately after their bachelor’s, most Singaporeans prefer to gain work experience before considering further studies. As a result, there are fewer master’s degree holders in Singapore, so setting this as a hiring threshold requires careful consideration.

Work Experience: Singaporean candidates tend to change jobs more frequently, making it challenging to find applicants with five or more consecutive years of work experience. Employers should balance their expectations with local market realities.

Conclusion

Building an efficient overseas team is a critical factor for the success of overseas enterprises expanding in Singapore. The strategies outlined above aim to provide practical guidance for forming a strong team in the early stages of your business expansion, helping you establish a solid foundation for growth in Singapore. If you have any questions about Employment Pass (EP) applications or human resource management, feel free to contact us. We will promptly connect you with a professional consultant to address your specific needs and support the steady growth of your business in Singapore.