SMEs renew call for fewer restrictions on foreign labour

SINGAPORE — As the cost of operations continue to climb amid the economic downturn, business leaders under the aegis of the Singapore Business Federation (SBF) have urged the Government to take a fresh look at the Republic’s stringent policies on hiring foreign labour, particularly after the ruling party’s return to power last month with a much stronger mandate.

In a dialogue session yesterday with Minister of State for Manpower Teo Ser Luck, the business leaders called for a recalibration of policies over foreign labour quotas, hefty levies and minimum wage requirements on work pass renewals.

They said that small and medium enterprises (SMEs) are further squeezed by high rentals and falling labour productivity.

“With the headwinds we are facing, maybe the Government can consider reducing the levy or using the levy to help businesses grow. We hope the tripartite relationship between unions, Government and the employers is reinforced and the workers realise the need to take an active part in the productivity enhancement drive,” SBF chairman Teo Siong Seng said.

Weak exports and the fear of the economic downturn getting more severe have led SMEs to turn to the Government for relief. SMEs are seeking subsidies and policy changes that could possibly bolster dwindling margins and suppress rising labour costs.

Minister of State Teo said the Government will address labour-related issues after gathering industry feedback from various chambers and trade associations.

“Manpower policies cannot be successful unless businesses are satisfied. We can’t have businesses getting weak; we will then lose more jobs than we create,” he said.

“Businesses are really facing some issues on the ground and their issues related to costs are real. I take away a lot of important points from this dialogue session ... The labour cost component has to be looked into. We are looking at the overall policy and whether certain policy changes are necessary or not. We are also in the process of implementing a transition process of getting lean and being more productive. We need to ensure it is implemented successfully,” he added.

Some SBF members also said the work pass application process should be made more transparent, while others noted that incentives and benefits to citizen workers should be attached to the number of years of work in view of declining productivity and issues around staff retention.

Ms Helen Khoo, executive director of Wing Tai Retail, said: “Several SME retailers have gone under. Our rental and labour costs are over 20 per cent higher compared with other countries like Hong Kong. Retail jobs are not easy for older people and alternative strategies like hiring part-timers to counter the labour squeeze are not effective as such employees (are lacking) in terms of their commitment to jobs.”

The labour cost for hoteliers in Singapore is about 25 to 30 per cent of total costs, compared with around 15 per cent in Thailand, the Philippines and Indonesia, said Ms Kay Kuok, a board member of the Singapore Hotels Association. “It is only increasing at a time when room rates are coming down. Hospitality is one industry where Singaporeans see no career growth opportunity,” she added.