Why Don’t Multi-National Companies Hire More Singaporeans?

TL;DR –  CECA does not give Indian nationals privileged or unconditional access to Singapore. In fact, none of our FTAs do.

Why are there so many foreign talents in Singapore? Is the government really opening our arms wide for foreigners to enter and take away our jobs? Can’t Singaporeans do these jobs instead? Yes, these are the six million dollar questions of the day, and I got a chance to ask someone who’s in the know and in the thick of these things.

Over a makan session of chicken don, I asked these questions to Lal, a middle-aged PMET I was introduced to by a colleague. 

Makan with Lal over chicken don, a simple mix of boneless chicken thigh, vegetables and brown rice.

Why don’t MNCs hire more Singaporeans?

Lal is a Singaporean working in an Indian multi-national company (MNC) based in Singapore. He is a global program manager working with different nationalities and having hiring responsibilities.

By virtue of his unique position, I thought Lal would be the right guy to ask whether our employment policies and free trade agreements (like the Comprehensive Economic Cooperation Agreement or CECA between Singapore and India) are pimping Singapore to foreign talents.

With the Singapore government pushing for data science and IT skills to be one of the next big opportunities for Singaporeans, I was surprised to hear from Lal that he had a lot of trouble hiring Singaporeans for his projects. 

“Last year, when I was hiring for the position of software engineer, I received 40+ applications, all from foreigners, PR and none from Singaporeans. When I asked around why Singaporeans did not want to apply for the job, the reasons given were salary, working culture, and a lack of local developers (possibly, from the headhunters).

Being a retrenched Singaporean before, I was pushing hard to give fellow Singaporeans a job too, even sending the job opening through my personal networks, but no one applied!”

So if Lal couldn’t hire Singaporeans for the jobs he had, would he have free rein to bring in foreigners to fill in the spaces?

“Actually, it left us in a fix.”

“Over the past few years, it has been getting harder to hire foreigners due to the tightening of eligibility for Employment Passes (EPs)*.

No Singaporean wanted to take up the job opening, and we couldn’t bring in foreigners to do the job. However, the job needed to be done as we already had a big client who had signed a contract with us.”.

The number of EP holders has hovered below 200,000 for the past few years (via)

In Singapore’s population, one in 30 people is an Employment Pass holder (via)

What about letting existing foreign talents with Employment Passes stay longer?

Lal shared that this is not possible.

“It’s not possible, because MOM already states that those on EP can only stay for up to 2 years (if they’re first timers), and EP renewals can stay for 3 years maximum. This means that when their contract is up, they need to fly home first.”

“The company will then have to place an ad for this job opening in the Jobs Bank for 14 days as part of MOM’s Fair Consideration Framework. If there are no suitable local applicants, we will apply for an Employment Pass which may or may not be approved by MOM. If the EP is not approved, the foreign talent will just have to find another job in his home country or migrate elsewhere.”

“There is no option to extend the EP beyond the stipulated duration of 2 or 3 years, MOM is very clear and strict on that.”

Could CECA be used to fly in a “free flow of foreign talents”?

“Not possible.”

Once again, Lal replied in the negative. During our makan session, he unlocked his phone and pulled out a PDF of the India CECA FTA Legal Text, which also can be downloaded here.

He pointed out Annex 9A (List of Professionals) which comprises of 127 job titles that CECA covers. I scanned through and the majority of jobs were related to technical skills like engineering, architecture and medicine (okay fine, perhaps we could be lacking in numbers locally). 

But I raised my eye-brows high at certain jobs like Polytechnic Lecturer and Advertising Account Executive (especially with the SPH retrenchment last year).

Back to Lal’s point to fill the positions of software engineers (which is No. 3 on Annex 9A), even if the job position is mentioned in CECA, the company still needs to go through the Fair Consideration Framework (FCF) process before it can fly in a foreign talent, provided MOM approves. 

Apparently there were many EP applications by his company which were rejected by MOM too. His company had been protesting vehemently to MOM on this issue since they had invested and established in Singapore as a gateway for their international business. 

What about intra-corporate transferees? 

Unlike fresh hires, intra-corporate transferees are foreign staff already employed by the multi-national company in another country like India. An example of this would be a parent company in India flying in a manager from its home office over here to help set up the Singapore office.

Would it be easier to fly them in?

According to CECA, there are also certain prerequisites such as being employed for a period of not less than either six months in company plus having one year industry experience, or having three years industry experience. They also need to be a manager, executive or specialist. 

Intra-corporate transferees can stay for an initial period of up to two years (could be extended to three years) for a total term not exceeding eight years.

Applications are also tedious and no guarantee of approval, according to Lal. 

Is CECA a one way street at Singapore’s expense?

An interesting point Lal shared as we finished our meal is that CECA a free trade agreement where Singaporeans can also choose to leverage on to work as an expat in India.

Lal said,

“I encourage young Singapore professionals to work overseas. The experience of working in different cultures will help one to develop independence and personality. Living overseas would give one to appreciate things in different perspectives.”. 

In fact he was offered a position in India, but turned it down as he felt it was better to stay in Singapore for his children’s education. 

He also pointed out how CECA and other FTAs had attracted MNCs to set up business in Singapore.

“My current MNC had started then using Singapore as a headquarters to grow the global and South East Asia business with the requirement using terms in CECA in growing their business.”

“Note that it was the same back in the 90s where I was an intern at a British MNC. I was then surrounded by majority European foreigners in my department. It was the same in late 90s and early 2000 that my Japanese and German clients were doing the same too, bringing in their own people… How come there weren’t complaints from Singaporeans then?”

“At the end of the day it’s all about trade and value-creation for better good of Singapore.”.

What is it like being one of a few Singaporeans in a multi-national company?

For a Singaporean who is a minority nationality in a company where more than 90% are foreigners, I was curious to hear what it is like working in one. Lal has actually been working in several IT MNCs where being a minority Singaporean was the norm.

“Be it in a British or American MNC and now in an Indian MNC, the rule of thumb is the same.”

“It is all about embracing diversity at the end of the day.”

“As a matter of fact, being a Singaporean gains us an upper-hand than most, as we are highly adaptable and blend in comfortably in most multi-cultural MNCs. Of course there are cons of being a minority, but generally the good MNCs tend to manage their working cultures well.”.

So what then is the real elephant in the room?

Although I found it a bit disconcerting at first that certain jobs in CECA’s job annex look like they could be easily filled by Singaporeans in Singapore, CECA is a two way FTA where Singaporeans could leverage to work in India (provided you are keen to). Which means we could send aspiring polytechnic lecturers and advertising account executives to India to make a name for themselves overseas, and any Singaporean who fits the other 125 job titles in Annex 9A.

However, the reason some Singaporeans are angry with CECA is that one of the main complaints for our joblessness in Singapore are due to free trade agreements like CECA making it easier for MNCs to hire foreign talents. Yet we have heard from Lal’s sharing that it is getting harder to hire foreigners, and the rules for hiring are getting tighter.

While it is sexy to imagine a future with minimal foreign talent, are we prepared for the implications?

What can we do in our personal capacity to make ourselves more employable and marketable as Singapore talents in demand? Are there other hidden issues getting in the way of us being able to fulfil our aspirational career goals? 

These questions and more, will be saved for other makan sessions with Jules and her guests.