19 August 2015
New scheme to allow firms temporary adjustments to their foreign worker mix
SINGAPORE: The Manpower Ministry is piloting a new scheme, called the Lean Enterprise Development, that will allow companies pursuing business transformation to have temporary adjustments in their mix of foreign workers.
Currently, the Dependency Ratio ceilings spell out how many foreigners can be hired to ensure that companies do not rely too much on these workers to get the job done. Under the ceilings, firms can employ lower- and higher-skilled foreigners according to a certain ratio.
The Lean Enterprise Development scheme, however, aims to give small- and medium-sized enterprises (SMEs) some flexibility in deploying foreign manpower as businesses carry out plans to be more innovative and productive.
For example, if a company pursues a new method of production that cuts down the number of lower-skilled foreign workers employed, they can still retain the same number of higher-skilled foreigners who may be needed to manage production even though the ratio has changed.
This arrangement can be allowed as the company trains more Singaporeans to manage the new production process, with the view that they can eventually manage operations without as many foreign workers around.
Such arrangements will be allowed on a case-by-case basis, with the transitional period decided based on the situation. To qualify, businesses must submit proposals for improving productivity and innovation that will be assessed by a task force managing the new scheme.
"This is not a scheme about giving more foreign workers to companies or increasing the quotas for companies," said Manpower Minister Lim Swee Say. "This is helping companies become more manpower-lean, right, strengthen their Singaporean core."
The scheme will begin on Oct 1 and be piloted for two years, MOM said.
The Association of Small and Medium Enterprises (ASME) backed the scheme, saying it will help businesses add more value to their operations as they seek to improve processes.
ASME said this will encourage companies to innovate and raise productivity, with the room given to tap foreign manpower during the transitional period. Sectors like food and beverage, engineering and manufacturing stand to benefit from the initiative, the association said.
"It's a scheme that looks at capability needs, the transition period of time that you need to go through and during that period of time, whether you might need some flexibility between local or foreign manpower adjustments,” said Mr Kurt Wee, president of ASME.