TRE Editor sent me the ST report and asked if I would like to write an Opinion piece on it. I immediately saw the potential as StanChart Research piece combined with ST’s publication at this juncture even before the FCF kicks in most likely carries with it a hidden agenda.
And that is to ‘warn’ S’poreans to ‘curb the anti-foreigner rant’ and to fire a shot across the PAP cabinet’s bows.
I got Chris K to co-author the piece ‘cos his sterling banking background adds weight to the opinion.
It’s interesting that even before the ink on the Fair Consideration Framework is dry, StanChart Research has come up with a report noting that ‘new rules that kicked in on Jan 1 have already made it significantly harder for firms to obtain employment passes for expats earning $3k to $5k/month.’ (ST 17 Apr):
Banks, IT firms mull moves offshore amid manpower shortage
The manpower shortage is forcing banks and IT firms to consider moving their middle and back-end functions offshore – a shift that could hit business parks that house these operations.
The warning came from a Standard Chartered Research report that noted how new rules that kicked in on Jan 1 have already made it significantly harder for firms to obtain employment passes for expatriates earning $3,000 to $5,000 a month.
Firms that want to hire young foreign graduates must pay them at least $3,300 a month under the new regulations, up from $3,000 previously. Older and more experienced applicants must be paid even more.
As a result, “four to five” banks are considering relocating some functions outside Singapore as they are struggling to fill back-office positions while keeping a lid on costs, said StanChart, whose analysts spoke to human resource experts, immigration service providers and business park leasing agents.
The implementation of the Fair Consideration Framework in August will likely make it even harder for firms to hire expats, it added.
The thrust of the report is that the resulting ‘manpower shortage is forcing banks (4 to 5) and IT firms to consider moving their middle and back-end functions offshore – a shift that could hit business parks that house these operations.’
StanChart believes that the situation can only get worse when the FCF starts in Aug as under the framework, firms with more than 25 employees must prove they tried to hire a Singaporean first, plus a compulsory ad in a govt job bank, before they can recruit a foreign professional for any job paying less than $12k/month.
Netizens across many platforms, not just at TRE, have already discussed many ways to game the FCF that’s conceived with holes large enough for 2-bus to drive abreast thro’. We just wish to predict one more – many foreign subsidiaries or new independent ones will be formed with less than 25 headcounts to completely circumvent the 25-employee rule.
Consider what Michael Smith of Randstad, the headhunter outfit that was caught with ads specifically asking for foreign applicants, observed:
“Companies requiring niche skills or specialist skills in growth areas such as research and development, banking, technology and accounting will be hit the hardest, as they often rely on employment passes as a means to fill specialist skill gaps in their workforce,”
Well, you read it yourself, in PAP’s own trusted media and right from the mouth of a horse in the HR manger, even mid and back-end jobs at banks, tech & accounting are considered as ‘specialist’, relying on ‘foreign talents’ to fill.
Two damning observations here:
One, either our education system is failing to produce even citizens qualified for just mid and back-end jobs or, in the insane rush to grow GDP at all costs, we are creating jobs that do not benefit citizens but only foreign firms, head hunters – and, yes, rent-seekers (aka land lords & REITs, majority GLCs).
Two, it’s got to be a Freudian slip by good old Michael, an old hand with the system here in Sgp.
What he basically reveals is calling PM Lee’s bluff, ‘Foreign workers create jobs for Singaporeans.’
‘NO!!!’, says Michael, R&D, banking, tech and accounting employers “often rely on employment passes as a means to fill specialist skill gaps in their workforce.”
Should we believe a PM who confessed a sad lack of 20/20 foresight or a professional who eats and sleeps HR 24/7?
Anyway, let’s try to understand the purpose and timing of the StanChart report and ST’s faithful reporting of it.
Is it too far-fetched to believe that foreign employers & HR outfits are ganging up to fire the first warning shots at Tan Chuan Jin? So, in case, newbie-Acting Minister Tan’s knees get wobbly, here’s our in-your-face 2cents view:
We should not cry over spilt milk if this comes to pass. If the large banks move out the mid and back office function, it is no great loss as these are cost incurring functions, not revenue producing ones. Even if the banks’ own internal transfer pricing recoups these costs, the Government would not earn much in taxes anyway.
A Business Times report of 12 March 2014 reminded us that Singapore is the transaction processing hub while the deals are mostly done elsewhere. Is there a point of Singapore accepting the operation risks and employing so many so-called FTs doing processing tasks while Hong Kong, Sydney and Tokyo take the glory and the revenues of deal-making, the front office function that is the very epitome of a real Financial Hub?
Well, let us call the banks’ bluff. If it is true – they can leave. If the business cannot find locals to fill positions, then it is not worth having. Therefore, good riddance to bad rubbish ….. or rather bad business and their hordes of FTs. At least, our population gets reduced by a few thousands, every bit helps. If they stay, then we know that they are … well bluffing, don’t we?
Please pass the word around to friends and all. We have only ourselves to look after each other, even if the FCF is ineffectual, foreign employers, CEOs like Michael Smith and our own govt are not interested to create nor to employ Singaporeans.
This StanChart report and ST’s reporting is another small piece of the puzzle of the disappearing Singapore PMEs.
2cents & Chris K
* 2cents blogs at 2econdsight.wordpress.com while Chris K has spent his entire career managing balance sheet currency, interest rates and liquidity risks in a world-class international financial hub.