Do expats actually earn more than locals in Singapore?

The inflated pay-checks once reserved for expats in Singapore are fast becoming a thing of the past, MD of Hays Asia Christine Wright says.

“In our experience, few expats in Singapore today are on the inflated packages of the past.

“In fact, most employers have localised salaries for expatriates. So while most companies still hire expatriates, they are considered equally with local candidates and are offered a local package.”

And it would seem the figures back up her observation.

Last month, the island nation ranked 13th globally for expat pay package levels – slipping behind Japan, China and Hong Kong.


 
According to the latest ECA Expatriate Market Pay Survey, the average expatriate middle manager in Singapore earns an average of US$259,000.

In contrast, expatriate managers in Japan get an average package worth US $375,000, placing the country in the lead for expatriate remuneration levels for the Asia Pacific region.

Elements of an expatriate package include the cash salary, benefits – such as accommodation and cars, and tax.

According to the report, the most common approach in Singapore in determining a package was to use the employee’s salary in their home country as the starting point.

“The rising cost of an expatriate package in Singapore will make some companies think twice about where they set up in the region,” ECA International Asia regional director Lee Quane said.

“However, the country’s reputation for providing an excellent quality of life is a big plus in terms of motivating employees to accept an assignment there.”

Singapore’s reputation is actually one of the driving forces behind lower expat packages, Wright said.

“Many years ago expat packages were used to attract foreign workers with specific skills, but as Singapore now has an international reputation as a great place to live and work, employers no longer need to entice expats with generous packages.”

In fact, Wright noted that many multinational corporations now categorically state that expatriates are paid the same as local workers.

“Today, it is the skills and experience of candidates that decides their level of compensation.”

Wright said the Fair Consideration Framework – which included guidelines promoting the hiring of Singaporeans – had little effect on expat pay at present, because it specifically applies to positions that pay less than S$144,000 per year.

Introduced in August last year, the guidelines require employers to first advertise job vacancies on the national Job Bank for at least two weeks before submitting Employment Pass applications.

In order for Singapore to retain a global position it may be that it needs to look overseas if local candidates don’t meet requirements of roles, Wright said.

“Many companies are willing to pay a premium for these highly-skilled staff who are in short supply – but not to the extent they once did.”