Impact of Foreign Professionals on our Economy and Society

Foreign professionals help Singapore compete on the global stage

Maintaining Singapore’s global competitiveness is essential to grow the economic pie and create good jobs to improve the standards of living for Singaporeans. To thrive in today’s economy, businesses need diverse talent. Even larger economies like the United States and the United Kingdom need foreign talent for their expertise and networks. For Singapore to stay globally competitive, with a smaller workforce, it is crucial to tap on foreign talent to complement our local workforce.

Here are some facts on foreign professionals in Singapore and their impact on our economy and society:

Fact 1: Global talent helps to anchor foreign-owned firms which in turn create employment opportunities and high-paying jobs for Singaporeans

• Access to global talent attracts foreign investments and multinational corporations (MNCs) that create a large number of good jobs for Singaporeans.

• While foreign-owned firms make up around 20% of firms, they employ one-third of the resident workforce. About 60% of residents earning more than $13,000 monthly, or the top 10% of residents’ income, are employed in foreign-owned firms.

• Foreign firms also create business for local firms, who in turn create jobs for Singaporeans.

Fact 2: Singaporeans have benefited from an expanding labour market

• Singaporeans in higher-skilled Professional, Managerial, Executive and Technician (PMET) jobs have grown in tandem with an increase in the number of foreign PMETs

  • In the last 10 years, the number of residents holding PMET jobs increased by 382,000, while the number of Employment Pass (EP) and S Pass holders increased by 38,000.

  • In growth sectors such as Financial & Insurance Services, Professional Services, and Information, Communications and Technology, EP and S Pass holders increased by 17,000, while resident PMET employment increased by 172,000.

  • Singapore citizens made up 86% of the growth in resident PMET jobs (or 328,000) over the same period, in line with their share in our resident labour force.

• In addition, Singaporeans have one of the lowest unemployment rates and highest labour force participation rates compared to other developed countries. The income growth of Singaporeans is also higher than that of developed countries, many of which saw their income stagnate or decline.

Fact 3: Foreigners contribute to raising Singaporeans' living standards while reducing our tax burden

• Global companies and foreigners pay corporate and personal income taxes which provide a source of revenue to support our social needs, which is increasingly important as the resident population ages.

  • For example, in 2014, there were 6 resident adults aged 20 to 64 supporting one elderly resident aged 65 and over. This is our “old-age support ratio”.

  • Without foreign workers, this ratio would have halved to 3.5 in 2024. This would have meant higher taxes or lower support for our seniors.

  • By including foreign workers, we have maintained this ratio at 5.2 in 2024. This helps to ease some of the fiscal pressures of our ageing population.

Real Challenges, Real Solutions

An open and competitive economy has delivered positive social and economic benefits to Singapore, but is not without its challenges. The Government proactively addresses them through its policies.

Upholding quality of Employment Pass (EP) holders

• We maintain a high quality bar for foreign professionals to ensure that they complement our workforce.

• EP qualifying salaries are benchmarked to the top one-third of local PMET salaries. This ensures quality and that foreigners are not hired simply because they are willing to accept lower wages.

• EP applications are also assessed through MOM’s Complementarity Assessment (COMPASS), which helps to ensure that EP applicants are well-qualified and possess verified credentials from accredited institutions.

Ensuring that employers diversify their labour sources and support local employment

• Under COMPASS, employers are assessed on the nationality diversity of their workforce and their support for local employment.

• Firms that do not hire locals or have an over-reliance on foreigners from a single nationality will find it more difficult to pass COMPASS.

• COMPASS has been effective. Since its introduction in 2023, the share of firms with higher dependence on foreigners of a single nationality has decreased by 7%, while the share of firms with higher dependence on foreigners generally has decreased by 15%. These firms also created 4,000 more PMET jobs for locals.

Taking action against employers that discriminate against Singaporeans

• MOM does not tolerate unfair employment practices, such as nationality-based discrimination.

• The Workplace Fairness Legislation better protects Singaporeans against workplace discrimination.

• MOM has implemented checks to ensure that employers adopt fair and merit-based employment practices.

  • Over the last 5 years, over 600 Employment Pass applications were withdrawn or rejected following investigations.

• Individuals who believe that they have been unfairly treated can seek redress by contacting the Tripartite Alliance for Fair and Progressive Employment Practices (TAFEP) at https://www.tal.sg/tafep/contact-us.

Empowering Singaporeans to stay competitive

• The Government has invested significantly in Singaporeans to stay competitive and secure good jobs, spending over $10 billion over the last five years on local workforce initiatives, which include:

  • WSG’s Career Conversion Programmes provide salary support of up to 90% for workers to move into new job roles or sectors that have good prospects and opportunities for progression.

  • SSG’s SkillsFuture Level-up Programme supports mid-career Singaporeans aged 40 years and above to pursue a substantive skills reboot. It includes a SkillsFuture Mid-Career Training Allowance of up to $3,000 per month to support long-form training.

  • SkillsFuture Credits further offset out-of-pocket course fees for SkillsFuture-approved courses. Those aged 40 years and above will receive a top-up of $4,000 to further support their upskilling needs.

  • Career Health SG. The Government empowers Singaporeans to take charge of their careers and navigate changes in the industry and economy, by supporting career guidance and tools to help workers optimise their careers, like the CareersFinder feature on WSG’s MyCareersFuture job portal.

  • Local leadership programmes. To groom local leaders, the Government has a suite of leadership development programmes, including overseas immersion and leadership milestone programmes.

Integrating foreigners with Singaporeans

• Foreign professionals live and work among us, and we must foster an environment where our foreign and local workforce mutually understand and appreciate each other’s social and cultural norms. By enabling meaningful interactions and friendships between locals and foreigners both at the workplace and in the community, we can strengthen mutual respect and build a more cohesive society.

• The Ministry of Culture, Community & Youth (MCCY), Singapore National Employers Federation (SNEF) and Singapore Business Federation (SBF) have convened an Alliance for Action (AfA) on the Integration of Foreign Professionals to explore ways to better integrate foreign professionals into the workplace and community.

The Government is open and transparent about labour market statistics

• MOM publishes a Labour Market Report as well as a Labour Market Advance Release every quarter, and releases numerous datasets on job vacancies, unemployment and income. The data can be found at http://stats.mom.gov.sg.

• Labour force statistics are based on the resident population. This is aligned with international practice. In addition, resident data typically mirrors citizen data, and having citizen data provides little additional information. For more details, please see https://www.factually.gov.sg/corrections-and-clarifications/why-are-labour-market-statistics-based-on-residents-and-not-singapore-citizens

• Citizen data is regularly released for key statistics on unemployment and gross monthly income from employment. The data is available at http://stats.mom.gov.sg