Career

Is the Fair Consideration Framework Actually Fair?

Ryan Ong 0 Comments

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The Fair Consideration Framework (FCF) was created after the National Conversation. It turns out Singaporeans are disgruntled about losing jobs to foreigners. I don’t know what’s scarier: the threat of growing xenophobia, or the fact that the people in charge had to organise a national level event to figure this out. Either way, here are some things they should have included:

 

What is the Fair Consideration Framework

The Fair Consideration Framework (FCF) is meant to prevent discriminatory hiring practices. It’s main targets are employers who, for whatever reason, avoid hiring Singapore citizens.

The FCF has three main effects:

  • A National Jobs Bank to Ensure Singaporeans Get a Fair Shot
  • Raise Scrutiny Against Discriminatory Employers
  • Make it Harder to Qualify for Certain Employment Passes (EPs)

 

A National Jobs Bank to Ensure Singaporeans Get a Fair Shot

Employers are required to advertise jobs for 14 days, in a National Jobs Bank run by the Workforce Development Authority (WDA). This ensures that employers can’t “stealth hire” by avoiding Singaporean applicants, and going straight for the ones they want.

Companies with less than 25 employees are exempt, as are job postings with a salary of $12,000 or more per month.

Raise Scrutiny Against Discriminatory Employers

Companies with unusually few Singaporeans at the Professionals, Management, and Executive (PME) levels will come under the spotlight. This is to “improve their hiring and career development practices”, in pretty much the same way police interrogations “improve your memory”.

They’ll start checking and double-checking suspect companies, is what I’m saying.

Make it Harder to Qualify for Employment Passes (EPs)

From January 2014, the qualifying income for EPs will be raised from $3,000 to $3,300.

Now all that can be compared to 500 investments bankers chained to the bottom of a lake (i.e. a good start). But upon closer scrutiny, there are some key issues that the FCF seems to ignore. These are:

  • No Protection for Lower-Income Singaporeans
  • It’s Still Easy to Hack the System
  • No Incentive for Skills Handovers

 

1. No Protection for Lower-Income Singaporeans

To be an EP holder in Singapore, you need to earn at least $3,300 a month. The salary of the average Singaporean degree holder is about $3,500 a month. Let me translate that for you:

The FCF is shielding degree holders (mostly the middle to upper-middle classes) from foreign competition. If you only earn as much as the typical diploma holder (around $2,500 a month), or you’re a blue collar worker, you’re still competing with a huge pool of foreigners.

The Ministry of Manpower’s (MOM) reasoning is that:

We have not made this compulsory for firms submitting applications for S passes or Work Permits, because there are other tools, such as levies and dependency ratio ceilings that spur firms to search for suitable Singaporeans before applying for an S pass or Work Permit.

It’s a bit of a stretch to claim that foreign worker levies (and related rules) level the playing field for lower income Singaporeans. The fact is, a lot of foreigners can price-war working class Singaporeans to death. With our cost of living, we simply can’t afford to charge as little for our labour.

In the interest of true fairness, the FCF should be expanded to cover Singaporeans at all income levels.

 

2. It’s Still Easy to Hack the System

It’s not too hard to weasel out of the FCF’s restrictions. If an employer goes through the motions, putting up the ad for 14 days and interviewing a bunch of people, what’s to stop them from concluding with:

Uh, yeah, we looked real hard. No Singaporean in existence can manage this department / code this software / stack this shelf with hair products.”

Other tricks can include interview shenanigans, like having the hirer meet Singaporean applicants in the darkest, filthiest room to convince them they don’t want to work there. I could give you a whole list, but the point is, anyone determined to break the system can probably do so.

Let’s see if MOM will shed greater clarity on enforcement methods. Follow us on Facebook, and we’ll keep you updated.

 

3. No Incentives for Skills Handover

Fair enough, Singapore may be lacking in certain skills, which we need to import. But what then?

The standard answer is to keep importing foreigners to fill positions we can’t. That sort of defeats the purpose. The goal is to import foreign talent, and then learn from them. But there’s little incentive to do that; it’s easier for companies to keep rotating foreign employees, who come prepackaged with training, than to trust a Singaporean to be mentored by them.

A better way to reduce our dependence on foreign labour is to incentivize skills handovers. We need to take note of companies who gradually transfer key positions from foreigners to locals, and reward them.

 

Have you encountered practices in your workplace that need addressing? Share them with us here.

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Ryan Ong

I was a freelance writer for over a decade, and covered topics from music to super-contagious foot diseases. I took this job because I believe financial news should be accessible and fun to read. Also, because the assignments don't involve shouting teenagers and debilitating plagues.

  • Raymond Ng

    To Mitigate the Loopholes of the “Weak” FCF, it is prudent for responsible government to Publish ” Skills Career Priority List / The Number of Openings / Market Pay Scale and Etc.at least 3 months Before the next Calendar Year.
    WDA could even interview Singaporeans on the before of those 25 or More Persons SMEs and Mandate Registration with WDA under our Employment Acts and related Rules, Standing Order and Regulations. Just for information, more than 95% of the total establishments in Singapore – employed less than 25 employees. Hence, the ground for not adhering to such FCF Practices are Huge!
    Furthermore, such “loopholes” does not prevent any MNC or GLC from creating tons of Micro enterprise and SMEs – should they so wishes. It is just a Good Gesture but an Expensive Mechanism from the Perspective of Taxpayers to Police and Enforce.
    These days, there are another TWO Creatures floating in our Ecosystem and seldom Detected. And that include : Foreign Intra-Company Transfer and Foreign Business Landscape. Hope this helps!

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