Foreign labour tightening has affected businesses of some small and medium companies

SINGAPORE: The gradual tightening of foreign labour regulations has affected businesses of some small and medium companies. That is according to a recent survey conducted by the Association of Small and Medium Enterprises (ASME). The survey also showed that some companies are looking to relocate or have already relocated overseas due to difficulty hiring in Singapore. It was conducted last month based on the ASME's 6,000 strong members. In the survey, two in five SMEs said that the recent manpower policies have negatively affected their business. About three in 10 SMEs indicated they have moved or are thinking of moving their operations elsewhere. The rest who are not looking to relocate said they are still cautiously monitoring the current business environment and labour shortage in Singapore. ASME's president Mr Chan Chong Beng said: "We have also heard people not expanding at the moment because they are waiting for a clearer picture to come and any additional expansion could be a burden to them. Mr Chan added: "The next alternative is to relocate to a cheaper country and we have seen companies who have relocated to Malaysia and the trend will continue because you want to survive." Acting Manpower Minister Tan Chuan-Jin recently cautioned that the pace of cutting foreign labour dependency must be managed to avoid prompting firms to relocate. This may cause retrenchment and higher unemployment among Singaporeans. The current labour crunch faced by companies includes skilled workers. But recent figures revealed the number of skilled foreign workers in the S Pass category, rose by some 12 per cent. As of June this year, there were 128,000 S Pass holders, as compared to 113,900 last year. These are for workers earning at least S$2,000 a month. The number of employment pass holders dropped by 0.4 per cent for the first half of this year. The contraction could be due to tighter requirements such as higher minimum salary, which was introduced in January. It is possible that companies are using S Passes to bring in more junior level PMEs. President of the Singapore Chinese Chamber of Commerce and Industry, Teo Siong Seng said the sentiments on the ground may be different. Mr Teo said: "The real feeling on the ground, especially among my 40,000 members is that in fact they are facing a very severe manpower crunch, especially the SMEs. "I think the government may need to release more figures as to exactly different sectors of the business industries, what are the net increase or decrease, in the work permit, in the S-Pass and also in the Employment Pass." The Manpower Ministry said it will be taking a closer look at S Pass holders. Chairman of Government Parliamentary Committee for Manpower Zainudin Nordin believes there is a possibility of further tightening for this group of foreign workers. Mr Zainudin said: "If there is no progress in building productivity or building the Singapore core, then something has to be done because as long as there is still the option of and the availability of cheap labour source, people will also make that option. "I would expect the government to tighten measures to ensure that we go towards less dependency of foreign labour because in my view, it's just not sustainable." The government had indicated that it is on the right track in reducing dependency on foreign labour but this will take time. Channel News Asia Reports