Tuesday, September 18, 2012

Singapore - myth of 'cheap' foreign workforce

Ok.This is very sensitive topic and I do not want to give any wrong impression. This is my 2c based on my experiences and observations.

I always took the position that companies are hiring foreigners not because they are cheap but they are more flexible. In the end the flexibility doesn't have to result in lower cost. I just saw an article from Jobstreet which is kind of supporting my observations. Just to mention "66 per cent of locals considered the low cost of labour the reason for hiring non-Singaporeans, only 16 per cent of employers cited this as the reason."

The problem is not the 'cost' but it is about the quality and even at times exposure. I've worked with many people from almost all the different categories of folks (i.e. Singaporeans, Almost Singaporeans, new Singaporeans, PR, EP ..) and I can see why $$$ is not the issue. Majority of knowledge workers are certainly making higher than their local counterparts (ofcourse including CPF) but still companies are going for them. Why ?

May be I can try to share my views based on a specific industry. This case my fav Mobile Industry. Mobile industry spans across all kind of trades from Radio to Sales/Front Office. So will try to share my views in detail here.

Experience / Exposure:

Being a tiny country we do not have the opportunity to experience many 'new' stuff and 'legacy' stuff.  For example Microwave is a pretty common backhaul in Asia/rest of the world. But we do not have any idea and if we need to even test the microwave we need to get people from outside.
Another classic case was with prepaid explosion. Few years back no-body used to use Pre-paid. Suddenly due to the foreign worker growth there is a new market for pre-paid and our telco's has no idea how to handle. They needed expert knowledge from outside. So this is considered a legacy but still we haven't had the experience.

For the "new" stuff. Lets take an example of "Green telecom". If we're to try solar base station we do not have any experience. Again we've to look at Indonesia or India.

Regional / Out of Singapore roles:

When SingTel wants to hire a person who need to manage their regional assets (SingTel owns 100% Optus-Australia; strategic stakes in Bharti-India, Telkomsel-Indonesia; AIS-Thailand; Globe-Philippines & couple more in Pakistan, Bangladesh), who would SingTel hire? A person with 3G/LTE/IP knowledge in Singapore market or a person with 2G/3G/IP/TDM knowledge from overseas?

Be it the local regulatory stuff or technologies or for that matter the mechanism of day to day work. We do not really have the skill set. Similarly, if the job requires to spend significant time in western europe or USA (For international sales or consultancy), again no choice but to get a person with real experience from those countries.


This is another area we need to improve. Now the world is changing pretty fast and with automation the jobs are getting simplified (and eliminated at the same time too).However we are still focusing too much on 'specialization' and going to narrow. Imagine if the same job can be done (with google help) by an engineer from vietnam/myanmar why would the employer (profit oriented) would like to pay higher pay to a local engineer?
So we need to differentiate ourselves and this is not a bad thing in my opinion. Government can help with policy/regulatory stuff to have specific % of local people but end of the day 'free markets' are driven by profits.

In a nutshell, 

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