Hong Kong may benefit from stricter Singapore policy on hiring of foreigners

Lion City seeks to favour locals in hirings under its 'Fair Consideration Framework'; foreign professionals may now opt for Hong Kong

PUBLISHED : Monday, 10 February, 2014, 4:38am
UPDATED : Monday, 10 February, 2014, 4:27pm

Hong Kong and Shanghai may have lost out to Singapore in the hunt for foreign talent over the years, but manpower experts believe a reversal is looming as the Lion City tightens the rules on the hiring of staff from overseas.

Singapore's Ministry of Manpower announced last September that under its new "Fair Consideration Framework", companies would need to consider locals before hiring from abroad.

"These changes are part of a broader effort to ensure that good jobs continue to be created for Singaporeans," said Tan Chuan-jin, acting minister for manpower at the time.

Starting from the first quarter of this year, companies with a disproportionately low concentration of Singaporeans at professional, managerial and executive level compared with other companies may be chosen for additional scrutiny.

Nick Marsh, managing director of recruitment firm Harvey Nash Asia Pacific, said over the years international companies and talented professionals had left Hong Kong and Shanghai for Singapore, mainly because of air pollution, limited school places and high rents.

"Lots of foreigners cannot get places in schools in Hong Kong. And they can get that in Singapore," Marsh said. "The regular conversations you have with foreigners in Hong Kong is, 'I have just had my rent hiked … 50 per cent'. It's either they cannot afford to live here or this is so stressful. 'I can go to Singapore and get an apartment for half the price'."

Marsh said another factor was that the Singaporean government gives several years of tax breaks for companies setting up offices in the country.

Five years ago, firms in Hong Kong were offering full expat pay packages, but now at least half of foreigners are offered a "local plus" package, Marsh said.

Full expat packages include full housing and schooling allowances, together with flights back home twice a year. "Local plus" packages mean half the housing allowance and often only one flight home.

Full expat packages in Hong Kong are still slightly more attractive than in Singapore. But many people prefer Singapore because of Hong Kong's air pollution, high rents and the difficulty in getting children into schools.

To give an example, a chief financial officer in Hong Kong earns a basic salary of about HK$2 million plus a HK$90,000-a-month housing allowance. In Singapore, the basic salary is HK$1.5 million plus a HK$60,000 housing allowance.

Marsh believes that Singapore's curb on foreign talent could mean that international firms and expats will opt for Hong Kong and Shanghai.

Pauline Chung Hei-ching, president of the Hong Kong People Management Association, said companies may move away from Singapore if the policies made it difficult to hire the international talent they need.


Locals First

Key points of Fair Consideration Framework

  • From January, qualifying salary for a work pass for a foreign professional up from S$3,000 (HK$18,350) a month to S$3,300
  • Firms will be subject to additional government scrutiny if they have disproportionately low concentration of Singaporeans at senior levels, and receive repeated complaints of nationality-based or other discriminatory HR practices
  • From August, companies with more than 25 employees must advertise vacancies on a new jobs bank to be run by the government. Ads must be open to Singaporeans and run for at least 14 calendar days.