Government to cut foreign workers in key sector

A major government agency plans to reduce the number of foreign workers in one Singapore sector by 20-30%

BY HRD 30 May 2017

Following a fall in private sector construction demand, the Building and Construction Authority (BCA) plans to reduce the number of foreign construction workers in Singapore to 20%-30% by 2020.

This is part of efforts to generate more productivity in the industry, the Straits Times reported. "Whoever is left... will be the higher-skilled workers," said BCA chief executive John Keung as quoted by the paper.

Productivity growth in the sector – as measured by value-added (VA) per actual hour worked – fell to -1.1% in 2016 compared to 4.4% the previous year, according to MOM figures.

At the start of this year, the government required firms to have at least 10% of their respective construction work permit holders fall under the “higher-skilled” category before hiring any new “basic-skilled” workers. Renewals were not affected.

Starting 1 January next year, firms that do not meet the 10% minimum will not be allowed to hire new basic-skilled workers or renew their current ones. From 2019, the government will revoke work permits of any excess basic-skilled employees for firms who do not meet the minimum number of high-skilled workers.

After reaching a four-year peak at the end 2015 (326,000), the number of construction work permits issued for foreign workers dropped to 315,500 during the same period last year, according to MOM figures. Construction work permits accounted for nearly a third (31.8%) of work permits issued last year.

Firms can only hire from construction workers from government-specified labour markets. Workers from Malaysia and “North Asian sources” (NAS) can be hired for an indefinite period. However, all firms must follow the construction sector quota of 7 work permit holders for every full-time local employee.

MOM expects construction output to moderate further this due to slowing construction demand since 2015. “The continued slowdown in the private sector construction segment is likely to weigh down on employment in the sector,” said the ministry in its latest Statement on Labour Market Developments.