A guide to Singapore's Fair Consideration Framework
Yet this has led to growing discontent among citizens in the country, who are facing tough competition for jobs with foreign workers. This in turn has prompted the government to introduce new policies aimed at promoting fairer employment practices and giving locals an equal opportunity when it comes to finding work.
But will these policies have the desired effect or will they prove largely ineffective? Will they put businesses in Singapore at a disadvantage at a time when they are already scrambling for talent? And crucially, will they actually address the underlying problem.
The FCF and the National Jobs Bank
The Fair Consideration Framework (FCF) was implemented in Singapore by the Ministry of Manpower this summer, and it requires businesses to consider Singaporeans fairly for vacancies based on merit. The same applies to opportunities for promotion.
Under the legislation, businesses operating in Singapore must advertise their vacancies on the National Jobs Bank at least 14 days before they apply for an Employment Pass (EP) to take on foreign workers. They must also comply with the Tripartite Guidelines on Fair Employment Practices, which dictate what can and cannot be mentioned in job postings.
The National Jobs Bank is a public platform that is designed to facilitate job matching between employers and local job seekers, and its official launch on August 1st marked the final stage of the FCF roll-out. It is managed by the Singapore Workforce Development Agency.
There are some exemptions to the FCF rules. For example, jobs in companies with fewer than 25 employees do not have to be advertised on the National Jobs Bank prior to EP application, nor to jobs paying a fixed monthly salary of S$12,000 or more. Jobs filled by intra-corporate transferees and short term jobs of no more than a month in duration are also exempt.
Additional scrutiny of hiring practices
In implementing the FCF, the Ministry of Manpower also wants to scrutinise the recruitment and career development practices of companies operating in Singapore more closely in order to identify those with a disproportionately low concentration of local people at management level.
It will look to engage with these firms and will be requesting information regarding hiring, staff grievance handling and staff progression frameworks. It will also want to know what these firms are doing to reduce their reliance on foreign workers and help and train and encourage local internal staff to move to higher positions.
In cases where there are serious shortcomings in company HR practices, and where there is little progress even after an action plan is agreed, employers may have to wait longer before they can submit EP applications, or they could even face restrictions on foreign worker recruitment.
How is the FCF going to affect businesses in Singapore?
There are mixed views with regards to the impact of the FCF on the jobs market in Singapore. Some believe it is a positive move that will help to create a more balanced workforce, while others think it will make little difference in reality. There are also some who fear it will exacerbate skills shortages.
Many companies operating in Singapore rely heavily on foreign workers with very specific skills, and it is unlikely that they will find the people they need within the local labour force, otherwise it could be argued they would have done so already.
Where certain skills are known to be lacking in the Singaporean talent pool, the new rules will only serve to lengthen the time is takes to get someone in to do the job. This could be problematic for companies that need highly-skilled people for short-term contracts to work on very specific projects where time is of the essence.
What the FCF may do, however, is encourage companies whose first port of call is usually abroad to take a closer look at what Singaporeans have to offer, and it could be successful in this aim. While some companies are in no doubt that they need to hire foreign workers, there may be some who could find the skilled workers they need locally if they only tried.
"The framework is not about 'Hire Singaporeans First, or Hire Singaporeans Only'," stressed Tan Chuan-Jin, the country's minister for manpower. "What the government is doing is to help them get a fair opportunity. Singaporeans must still prove themselves able and competitive to take on the higher jobs that they aspire to."
It has also been suggested that the FCF could lead to an increase in wages for foreign workers in Singapore, since jobs paying S$12,000 or more will be exempt from the rules.
But, fundamentally, what the FCF does not do is address the underlying problem. If the Singaporean government wants businesses in the country to hire more locals, then efforts must be made to ensure that the next generation of Singaporean graduates is equipped with the skills that are most in demand.