More companies exploring hires from non-traditional sources to ease manpower woes

Key Concepts

• Non-Traditional Source Countries: Myanmar, Sri Lanka, Bhutan, Cambodia, Laos – countries newly approved for foreign worker recruitment.
• Work Permit Holders: Foreign nationals authorized to work in Singapore. Currently, those from non-traditional sources represent a small percentage (less than 2%) of the total.
• SMEs (Small and Medium Enterprises): Businesses facing challenges with cost pressures and digital adoption.
• Productivity Gains: Improvements in efficiency and output, often through technology and AI.
• F&B (Food and Beverage) & Logistics: Industries benefiting from the expanded worker pool.

Expansion of Approved Foreign Worker Sources

The Singaporean Ministry of Manpower is broadening the range of countries from which companies can hire foreign workers. This expansion includes countries like Myanmar, Sri Lanka, Bhutan, Cambodia, and Laos. Specifically, in June, Bhutan, Cambodia, and Laos were added to the approved list, followed by roles such as heavy vehicle drivers and manufacturing operators in September. This initiative aims to alleviate hiring difficulties faced by businesses. There has been a measured increase in interest following these announcements, described as “cautious rather than a sudden surge,” with a 30% increase in inquiries this year compared to last.

Current Numbers & Industry Impact

As of June of this year, approximately 17,000 workers have been hired from these non-traditional sources, representing less than 2% of all work permit holders in Singapore. The scheme, first introduced in 2023, has seen some companies facing worker shortages, with one firm reporting gaps of up to 80 workers since the scheme’s inception. The Singapore Chamber of Commerce and Industry (SCCI) notes that the expanded list has been particularly helpful for SMEs in the Food & Beverage (F&B) and logistics sectors. Specific job roles benefiting include sheet metal workers in manufacturing and housekeeping staff in the service sector. The speaker highlights the difficulty in finding local workers for roles like truck drivers and shelf stackers, despite offering competitive wages.

SME Concerns: Beyond Foreign Worker Access

Despite the benefits of expanded foreign worker access, the SCCI emphasizes that SMEs have more pressing needs. They argue that cost relief and support for technology and Artificial Intelligence (AI) adoption are crucial for achieving meaningful productivity gains. SMEs are experiencing squeezed margins due to rising costs in areas like rentals, utilities, logistics, and overall operational expenses.

As stated, “Sme's feel that the margins have been squeezed with limited pricing power.”

The Need for Comprehensive Digital Support

While SMEs recognize the value of digital tools, they lack the capability to effectively leverage them for productivity improvements. The SCCI advocates for support that goes beyond basic digital assistance, focusing on integration and responsible AI deployments. This would enable SMEs to navigate an uncertain global economic environment. The speaker points out that simply having digital tools isn’t enough; the ability to derive productive gains from them is essential.

As noted, “It's a nice have got the digital tools that are necessary. But Sandi a key public. The there's a lack of capability to get productive gains from the digital tools itself.”

Budget Wishlist & Future Outlook

Looking ahead to the upcoming budget, the SCCI’s wishlist centers on measures that address these more fundamental challenges faced by SMEs. The focus is on providing support that will enable SMEs to thrive in a competitive landscape, rather than solely relying on foreign worker recruitment.