The foreign candidates that banks will struggle to hire as Singapore tightens work visa rules
Increasing the minimum salary level for Employment Passes (EPs) in the Singapore finance sector will make it more difficult for banks to hire foreign candidates for junior back-end technology jobs, say recruiters. But the overall impact on the job market will be muted.
From December 1, the Ministry of Manpower (MOM) will raise its qualifying monthly salary by S$500 to S$5k for financial services candidates, and by S$600 to S$4.5k for foreigners in other industries. This is the first time it has set a higher threshold for a specific sector. Finance pay is “consistently higher than in other sectors” and financial services attracts “strong interest from local jobseekers with good qualifications,” MOM said in a statement.
“Overall, this change shouldn’t make much of a difference as financial services firms have already been focusing on local talent over the last 18 months at salaries between S$5k and S$10k,” says Richard Aldridge, a director at recruiters Black Swan Group.
Employment pass holders are generally senior and have niche skills, says Natasha Madhavan, team lead for governance and technology at Selby Jennings. “And we’ve already seen over the last three months that banks have made a significant effort to look at Singaporeans and permanent residents [PRs] for roles with under five years’ experience,” she adds. The new $5k threshold is just one of a series of recent government measures designed to prioritise locals for jobs. Last month MOM placed 30 financial services and professional services employers on a watch list for potentially discriminatory hiring practices after finding they had a large concentration of foreign staff from single nationalities.
Technologists account for a high proportion of overseas employees in banking, and Madhavan says some graduate back-end tech jobs – including developers and IT support – pay monthly salaries of less than S$5k, meaning banks can no longer apply for EPs from December 1. “Banks would instead look to hire Singaporeans and PRs who might not traditionally have hit the mark on job requirements,” says Madhavan.
Another option for banks hiring for sub-S$5k jobs is to take on foreigners on S Passes (SPs) – a less-skilled work visa that is subject to an annual quota but has a minimum salary of only S$2.5k – rather than EPs. “In this current environment, I expect EPs to be no easier to come by than quota-restricted SPs, so employers that can’t procure EPs for their non-Singaporean hires, will apply for SPs instead,” says Pan Zaixian, founder of headhunters Pan & Co.
For tech jobs with monthly salaries currently in the late S$4,000s, however, banks may simply boost pay by a few hundred dollars a month to meet the S$5k EP criteria. “Banks will likely exercise some flexibility on salary bands to minimise employees in the S Pass category,” says Angela Kuek, director of search firm Meyer Consulting Group in Singapore.
By contrast, junior candidates who have a Master’s or PhD, or who work in more sought-after tech jobs like data science, cloud engineering or cyber security, can commend salaries above S$5k. Cloud developers at analyst level earn about S$6.25k a month, according to data we averaged out from several recruitment agencies. “A lot of the hiring in technology tends to be at a higher salary due to high demand and relatively low supply of qualified professionals, especially in niche areas, so the new EP threshold will not have a major impact for banks,” says Christina Ng, managing director of LMA Recruitment.
The hiring of foreigners has become a contentious issue during and after Singapore’s July General Election. Recent social media posts have – often inaccurately – criticised the number of Indian nationals employed by firms like DBS and Temasek, prompting the companies to defend their staff from abuse and highlight the large proportion of Singaporeans in their ranks. Prime Minister Lee Hsien Loong said on Wednesday that even as Singapore adjusts its policies on work passes, it must be careful not to send the wrong signal that it is no longer welcoming overseas applicants.