Foreign-owned firms constitute around 20 per cent of companies in Singapore and employ nearly one-third of the resident workforce, according to a Ministry of Manpower (MOM) press release on 17 September. These firms also provide jobs for six in ten residents earning a gross monthly income above S$12,500 and generate business for local small and medium enterprises (SMEs) that employ the majority of resident workers. The ministry emphasised the importance of remaining open to global talent and attracting foreign investments to complement the resident workforce and create quality jobs for Singaporeans. This release comes amid growing concerns about job prospects for locals.

Background

The MOM's release marks the first time the ministry has shared such detailed statistics on the country's labour market, aiming to address anxieties about local employment opportunities. The data underscores the significant role foreign-owned firms play in the Singaporean economy, not just in terms of employment but also in supporting higher-paying jobs and local SMEs. The ministry's stance is clear: to sustain economic growth and job creation, Singapore must continue to attract global talent and foreign investments.

Total employment grew

Total employment in Singapore increased by 11,300 in the second quarter of 2024, more than double the growth seen in the first quarter. This growth was primarily driven by non-residents, particularly Work Permit holders in sectors and roles that residents are generally reluctant to fill. Resident employment, however, saw a slight decline of 600. Employment growth for residents was noted in outward-oriented sectors like financial and insurance services, information and communications, and professional services, while seasonal declines were observed in retail trade and administrative support services.

Unemployment and long-term unemployment rates remained low

The overall unemployment rate in June 2024 was lower compared to March 2024. However, the resident long-term unemployment rate remained steady at 0.8 per cent. Retrenchments were low in the second quarter but saw slight increases in the financial and insurance services and wholesale trade sectors. Most firms cited business reorganisation or restructuring as the primary reasons for retrenchment. Concerns about recession or sector downturns have lessened, with the ministry expecting a resilient external demand outlook for the rest of 2024.

Securing jobs post-retrenchment

More than half of all retrenched residents managed to secure jobs within six months. Despite this, the re-entry rate for residents dipped from 59.4 per cent in the first quarter to 55 per cent in the second quarter. The ministry noted that re-entry rates tend to improve significantly over time based on past retrenched cohorts. Job vacancies remained steady at around 81,200 in June 2024, with the ratio of job vacancies to unemployed persons increasing from 1.56 in March 2024 to 1.67 in June 2024.

The labour market

The labour market performed well in the first half of 2024, according to the ministry. Labour market momentum is expected to continue, with wages and employment growing in tandem with economic growth. However, in the longer term, resident employment growth is anticipated to moderate due to Singapore’s high labour force participation rate and slowing resident workforce growth. The ministry reiterated the need to remain open to global talent and attract foreign investments to support resident workforce growth.

The government has updated foreign workforce policies to ensure businesses hire high-quality foreign workers and attract global talent. This includes the Complementarity Assessment (COMPASS) framework, a transparent point-based system that took effect in September 2023 for new Employment Pass (EP) applications and will apply to EP renewals from September 2024. COMPASS aims to provide clarity to businesses seeking to hire skilled foreign professionals and awards more points to businesses with a strong local core, a diverse foreign workforce, or those contributing to Singapore's strategic economic priorities.