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Human Resource Management in Singapore

Klaus J. Templer, David T. W. Wan and Naresh Khatri

Introduction

Singapore is an island- and city-state at the southern tip of the Malay Peninsula with a total population of 5.18 million as at the end of June 2011. Singapore is truly cosmopolitan: 3.26 million are Singapore citizens (with an ethnic composition of 74.1 percent Chinese, 13.4 percent Malay, 9.2 percent Indian, and 3.3 percent others), 0.53 million are foreigners with permanent resident status and 1.39 million are non-resident foreigners (Singapore Department of Statistics, 2011). The common language of business and daily parlance is English.

Since its independence in 1965, Singapore has achieved tremendous economic advancement. From earning a gross domestic product (GDP) of S$2.2 billion or US$0.7 billion in 1960 to a GDP of S$326.8 billion or US$259.8 billion in 2011 (Singapore Department of Statistics, 2012), Singapore is today one of the world’s leading financial centers and a key trading center with one of the world’s largest ports. Singapore has “a highly-developed and successful free-market economy. It enjoys a remarkably open and corruption-free environment, stable prices, and a per capita GDP higher than that of most developed countries” (Central Intelligence Agency, 2012). Singapore has a skilled workforce and an advanced and efficient infrastructure. For example, 23 percent of the Singaporean citizens who were employed in 2010 were university graduates, up from 14 percent in 2001 (Manpower Research and Statistics Department, and Singapore Department of Statistics, 2011). Over the same period, the percentage of those who were in professional, managerial, executive and technical jobs rose from 42 percent to 49 percent. In other words, one in two Singaporeans in the workforce is a professional. More than 7,000 multinational corporations from the United States, Europe and Japan, 1,500 from China and 1,500 from India are represented in Singapore. As of 2010, the stock of investment by US companies alone was more about US$106 billion (total assets) (US Department of State – Bureau of East Asian and Pacific Affairs, 2011).

The GLOBE study on 62 societies showed for Singapore high cultural practice scores on the dimensions future orientation, performance orientation, uncertainty avoidance, institutional collectivism and in-group collectivism (House et al., 2004). Singapore has also been described as a tight society (Gelfand, Nishii and Raver, 2006; Triandis and Suh, 2002) with strong, clear and pervasive social norms. Whereas loose societies, such as the United States, tolerate deviations from social norms and have also fewer norms and rules for social situations, tight societies, such as Singapore, have many rules and strong social norms about behavior and a high degree of sanctioning (Gelfand, Nishii and Raver, 2006; Triandis and Suh, 2002).

The total labor force in Singapore in June 2011 stood at 3,158,900 with a breakdown for manufacturing, construction and services of 538,900 (17 percent), 400,700 (13 percent) and 2,199,500 (70 percent) respectively. The weekly total and overtime paid hours were 46.2 and 3.7. The average resignation rate was 2.1 percent with the highest turnover rate being in restaurants (4.7 percent) and the retail trade (4.3 percent). Whereas there were 55,900 job vacancies (74 percent of these from the services sector), the seasonally adjusted unemployment rate for residents was 3 percent (Manpower Research and Statistics Department Singapore, 2011a).

Historical Development and Key Factors Influencing HRM Practices in Singapore

Singapore obtained full independence in August 1965. In this relatively short period of time of national development, it has emerged as one of the world’s most competitive economies. In just one generation, Singapore has progressed from Third World to First. One of the many reasons why the country could achieve its current economic status is the effective utilization of its human assets.

Singapore’s economic strategy. There would be few, if any, countries today in which the government is not involved in one way or another in influencing and directing the country’s economic development. Singapore’s proactive government has been credited with its ability to quickly adapt policies (even “unpopular” ones) to meet new challenges, achieve public consensus and support for its economic/social policies (Wan and Hui, 2008).

Singapore has a unique wage system, which has evolved along with its economic strategy. In the period from 1965 to 1978, the economic strategy was to provide employment by attracting labor-intensive industries. To make Singapore more competitive than its neighbors, it put a restraint on wages. Singapore changed its economic strategy (1979 to 1984) from labor-intensive manufacturing to more skill- and capital-intensive manufacturing. This phase can be termed as wage correction. The government pushed for phasing out low-wage, labor-intensive industries and attracting high-wage capital-intensive and skill-based industries. The third phase of the economic strategy was to be more competitive in the face of increasing competition from the neighboring countries, especially Malaysia. This phase is called wage flexibility and it began in 1985. The flexible wage system has several components: (1) a basic fixed component reflecting the value of the job and to provide stability, (2) an annual wage supplement (AWS) of one month that can be adjusted under special circumstances, (3) a variable bonus based on a company’s profitability and improved productivity, and (4) a service increment each year for loyalty, experience and length of service.

It is worth noting that the variable bonus in Singaporean companies varies significantly. It ranges roughly between the equivalent of one month’s salary to six months’ salary. Nowadays for bonuses and increments, the value placed on individual performance is more direct. Singapore has achieved one of the highest saving rates through employing a wage system in which a significant component is contributed by both employees and employers to the Central Provident Fund (CPF) scheme. The Central Provident Fund contributions (both from employee and employer) have been as high as 40 percent of each monthly salary. Lately, the focus is on improving national productivity and the sharing of productivity gains. The emphasis on productivity gain-sharing is logical given that Singapore aims to boost its yearly productivity growth to 2 to 3 percent over the next 10 years (Straits Times, 14 October 2011).

Singapore’s administrative system. Singapore’s administrative system is also unique. It can be said that Singapore has put in place one of the most elaborate management control systems. A neutral observer will find the Singaporean administrative system to resemble a military system. In fact, a number of senior officers in the military take up positions as head of a government ministry, department or corporation after their retirement from the military. Although sometimes exaggerated a bit too much in the Western media, there is some truth in Singapore’s image of a controlled society. The positive side of it is that Singapore is one of the most disciplined societies in the world and it is one of the cleanest cities on earth.

The role of the Singapore government as a key player in the management of employment relations is clearly reflected in the administration of employment laws by the Ministry of Manpower; its assistance in the settlement of disputes; and participation in various tripartite organizations. In general, the government’s expectations of the Singapore labor movement are multi-fold: to protect the interests of the workers at the workplace; to earn the trust and respect of workers and managers; to support the nation’s development strategies; as well as to play an active role in shaping responsible work ethics. On the other hand, the employer organization is expected to support national goals and to be active in tripartite collaboration through various tripartite channels (Wan, 2010). Examples include: the Tripartite Committee on Union Representation of Executives (1999); the Tripartite Committee on Work–Life Strategy (2000); the Tripartite Committee on Portable Medical Benefits (2000); the Tripartite Committee on Employment of Older Workers (2005); the Tripartite Alliance for Fair Employment Practices (2006); the Tripartite Workgroup on Enhancing Employment Choices for Women (2007); the Tripartite Committee on Central Provident Fund and Work-Related Benefits for Low-Wage Workers (2007); and the National Tripartite Committee on Workplace Health (2008).

Multinational Corporations as Growth Drivers. Singapore has one of the most open, trade-oriented economies. It realized the importance of a pro-business environment in 1965, which its neighbors understood much later. Its government made a deliberate choice of attracting multinationals to be an engine of economic growth. Interestingly, Asian economies are pursuing three distinct economic strategies. While Japan and Korea have a few mega companies/conglomerates that control the bulk of their economic activity, Hong Kong and Taiwan have depended on small, entrepreneurial firms for their growth and development. Singapore and Malaysia chose still a distinct path. Both have relied heavily on multinational corporations for their economic growth.

Singapore’s small, open economy is vulnerable to external shocks because the value of its exports is much larger than its GDP. The country has a good mix of multinationals from Europe, Japan and North America. This mix of multinationals is also reflected in a mix of human resource management practices in Singapore companies.

The strategy of attracting multinationals led to rapid growth in Singapore, which was not possible otherwise. Multinationals bring capital, the latest technology and diverse management practices, three of the most critical factors for business success. On the negative side, multinationals do not show any loyalty. If business conditions are not favorable, they move to other locations.

Countries in the region, such as Malaysia and Thailand, and now China, have realized the importance of a pro-business environment and the role of multinationals to achieve rapid growth. The neighboring countries have greater natural resources and cheaper labor. For example, competition from Malaysia has intensified. Malaysia has expanded its seaport infrastructure in the State of Johor—the southern-most part of mainland Malaysia. With a larger human resource pool, lower wages and cheaper land, the Johor seaport is now a serious competitor. Consequently, Singapore has to further enhance its competitive advantage. It has created a new niche in high-technology, bio-medical sciences and high-value added services to isolate it from the threat of competition.

China’s emergence as an economic power provides both threats and opportunities. While China’s economic potential makes it the largest recipient of foreign direct investment (FDI) (hence less investment flow for Southeast Asia), its growing middle class also presents a huge source of demand for goods and services. Singapore, with ample knowledge and expertise in hotel management and tourism, logistics, infrastructure, transportation and port management, education, consulting as well as other niche services, has intensified its presence in the mainland. At the same time, more and more Chinese firms are making use of Singapore’s financial infrastructure and its close networks with the region to establish a foothold in Southeast Asia.

Role and Status of HRM in Singapore Companies

HRM functions and HRM practices in Singaporean companies are in transition. Many organizations have realized the importance of HRM, and salary surveys show that HR executives are among the best paid in Southeast Asia. HR that used to be part of the finance and accounts department in most organizations in the past is being configured as a standalone function. More HR managers are reporting directly to their CEOs, unlike in the past, when they used to report to the head of finance and accounts department. HR managers are also increasingly participating in strategic planning meetings, and the link between strategic planning and the human resource function has been getting stronger. The linkage of HR with strategic planning is thus growing.

Khatri and Budhwar (2002) interviewed 35 senior managers including CEOs of nine companies in Singapore and found that two factors, HR competencies and top management enlightenment, affect the status of HR function in an organization. HR managers felt that their competencies were important in gaining trust and strategic involvement in the organization. They also felt the need to convince the upper management that they were capable of managing the fundamental HR functions well before being invited to the strategic table. In addition, top management enlightenment (recognition by the top management that HR function can play a critical role in formulating and implementing organizational strategies) impacts on the role and status of the HR function in the organization.

As more and more companies realize the significance of the HR function, they are also placing more emphasis on the role of the human resource personnel in their firms. Practitioners in the Singapore HR profession from time to time see the need to uplift its image and reputation. Similar to what the accountants, engineers and other professions have done, the Singapore Human Resources Institute (SHRI) initiated an HR accreditation program in February 2006 to “enhance the standing of the HR profession and to provide a clear roadmap for HR competency and knowledge acquisition” (see the SHRI website). Three accreditation statuses are accorded: the Human Resource Associate (HRA), the Human Resource Professional (HRP) and the Senior Human Resource Professional (SHRP).

While the term Strategic HRM has been in use in Singapore for more than a decade, the (actual) strategic role of the HR personnel depends very much on their ability to anticipate new developments, embrace change and provide the needed leadership for organizational success. Questions that remain to be answered include: How do we define and measure HR performance? How can we make HR a strategic partner? How do HR professionals drive change and add value to organizational effectiveness? Basically, two sets of questions are being asked: what and how.

Key Challenges Facing HRM in Singapore

There are a number of HR challenges facing Singaporean companies. The chief among them include chronic employee turnover/job-hopping, a relatively low participation rate of females and older workers in the workforce, training and development, management of Singaporeans working abroad, and overhauling management systems and HR practices that can sustain a high-value added, knowledge-based service economy.

Turnover/Job-hopping. The labor shortage has been the main feature of the Singapore economy due to its small labor pool. A result is a chronic employee turnover problem. Khatri, Budhwar and Chong (2001) in their study of companies in three industries (retail, food and beverage, and marine and shipping industries) attempted to identify the root causes of turnover in Singapore. The authors found no evidence for the common myth that young and educated Singaporeans have developed a job-hopping attitude because of labor shortage and that they hop from one job to the other for a few extra dollars. Instead, turnover is caused by factors under the control of management. Especially, the authors found that companies were not doing enough to create a sense of belongingness and commitment in their employees and that their management practices were perceived lacking in fairness and transparency.

Achieving work–life integration is seen as one way to enhance morale and reduce employee turnover. Since the setting up of the tripartite committee on a work–life strategy, guidelines on Best Work–Life Practices and Family Friendly Workplace Practices have been issued and promoted. The idea is that employees must enjoy a fulfilling life by having a healthy lifestyle while working hard. The three are crucial to organizational survival because of increased business uncertainty, the need to improve productivity, reduction of human power costs and effective utilization of new technology. In practice, organizations do not restrict themselves to the use of one particular form of flexibility.

A possible response to the generally tight labor market is to develop more flexible work arrangements, such as flexi-hours, job sharing, part-time work and work from home. Part-time working in manufacturing and services is one of the many alternatives to relieve human power shortage in these sectors. While part-time work has become more common over the years, Singapore still lags behind other developed countries. Some employers in the manufacturing sector have reservations about employing part-time workers on the grounds that they need longer time to be trained. Employers also perceive that full-timers are more productive and more committed (Wan and Hui, 2008).

Participation of females in Workforce. The female participation in the Singapore labor force has risen over the years. The employment rate for women in the prime-working age bracket of 25 to 54 increased from 65.4 percent in 2001 to 75.7 percent in 2011 (Manpower Research and Statistics Department, 2011b). However, Singapore has a large pool of highly educated female workers aged 29 to 34 who take themselves out of the workforce temporarily to raise their children. These women have to struggle to find suitable jobs when they want to return to the workforce. HR managers need to tap the pool of highly educated, older women. Older women are likely to job-hop much less than other employees. Further, by understanding the needs of these employees and by providing them with job-sharing and flexible scheduling opportunities, it is possible to create a sense of commitment in them.

Participation of older employees in the workforce. Singapore’s workforce, following the trend of many other developed countries, is ageing fast. By the late 1980s Singapore already had a larger proportion of its population aged 65 and above compared to its neighboring countries. By the year 2030, the number of those aged 65 and above is expected to rise to 20 percent, the highest percentage of aged persons in any ASEAN country (Committee on Ageing Issues, 2006). Increased life expectancy (79 years for men and 84 years for women) combined with a declining fertility rate prompted the government to increase the minimum retirement age from 55 to 60 in 1993. It was raised to 62 in January 1999 and the long-term target is 67. Since older workers are more vulnerable to retrenchment, the government has substantially reduced the employers’ Central Provident Fund contribution for those aged 50 and above. Employer contribution rates are cut from age 50, and again at 55 and 60. Lately, the union movement called for a review of this decades’ old CPF policy. The rationale is to entice older workers to stay in the workforce. Moreover, as more companies have moved away from a seniority-based pay system towards performance-based pay, older workers are not necessarily more costly to hire or retain.

The employment rate of older workers, aged 55 to 64, in the labor force in Singapore is 61.2 percent, which still lags behind other developed countries like Japan or Great Britain with an employment rate for older workers of about 65 percent (Heng, 2012). The older workers in Singapore are generally less educated, compared with the younger cohorts, because many of them have missed out on the limited opportunities that were available when they were young. However, future cohorts of older workers will be increasingly better educated.

Although older workers have a lower turnover compared to their younger counterparts, they are more vulnerable to job loss and longer unemployment spells. This can be attributed to the incorrect perceptions among employers that they are less productive and less receptive to change. In reality, older workers can perform better in many jobs, especially those involving service and human contact such as retail, counseling, social services and consultancy. Also in jobs that require a substantial amount of training and experience such as professional and highly technical work, older workers can maintain high levels of performance well into their 50s and 60s. The growing importance of the services industry in fact augurs well for the employment of older workers as the nature of work will be less dependent on physical stamina and requiring softer skills such as communication and service delivery.

The Singapore Tripartism Forum (2012) actively encourages the re-employment of older workers. On its website www.re-employment.sg it provides advice for employers and employees, and it showcases companies that have implemented age-friendly HR policies or practices.

Training and development (T&D). In general, training focuses on improving skills in the current job while development aims to improve the employee’s skills and abilities on future jobs. The purposes of T&D are not restricted to removing performance deficiencies or increasing productivity. This HR function also acts as an important tool to attract good recruits and retain staff. For expanding enterprises, investment in human capital, in addition to recruitment, becomes crucial for the company’s success.

In the last two decades, training consultants in Singapore have mushroomed. The emphasis on training is so much that some bigger companies have even created a standalone department on training along with the human resource management department. One wonders, however, if the current training programs with an emphasis on improving operational efficiencies are appropriate in the new economy that is increasingly knowledge-based. Most of the training programs at present are designed to support cost-reduction or quality-enhancement strategies. They do not necessarily support innovation strategy. As Singaporean companies attempt to move from a cost-quality combination to a quality-innovation combination, the nature of training programs has to change significantly.

Singapore’s success can also be partly attributed to its well-established education system. Singaporeans enjoy a wide range of education opportunities. At the tertiary level, there are five universities: National University of Singapore; Nanyang Technological University; Singapore Management University; Singapore University of Technology and Design; and SIM University, which caters to the upgrading needs of working professionals. In addition, there is the Singapore Institute of Technology that caters for polytechnic graduates. The Ministry of Education has formed a Committee on University Education Pathways Beyond 2015 to examine how the university sector can better provide opportunities for Singaporeans to upgrade. The key considerations are economic relevance, quality education and cost effectiveness.

At the continuous education and training scene, the Workforce Development Agency (WDA) is at the forefront to promote adult learning. Its vision “Learning for Life, Advancing with Skills” highlights its mission to build capabilities and ensure the competitiveness and employability of the country’s workforce.

Management of Singaporeans working abroad. An important HR issue in Singapore is the effective management of its employees sent as expatriates out of Singapore. Realizing that it has limited market and natural resources, Singapore has pursued a two-pronged economic strategy: (1) to go high-tech and (2) to regionalize. To actualize the second prong of its strategy, Singapore has been encouraging its companies to invest in regional countries. The fast-growing countries in Asia-Pacific provide ample opportunities to grow and expand. To manage the overseas operations of Singaporean companies requires capable and willing Singaporeans. Currently, there are many Singaporeans working in various countries.

There are a number of major issues involved in the management of Singaporean expatriates, such as training and appropriate compensation. In fact, repatriation has been the major concern of Singaporean expatriates, for example the re-integration of their children into the Singaporean school system. Other concerns are the living standards in third-world countries and whether to make the family join for a foreign assignment. Khatri (2000a), in a study of determinants of Singaporean expatriates in China, identified several key factors contributing to their greater performance/success. While many studies of American and European expatriates have found cultural competency as more important than technical competency, this study found that technical competency plays a more important role in the success of Singaporean expatriates in China. The second factor affecting the success of Singaporean expatriates was the nature of the assignment, which includes briefing the expatriates about their overseas assignment, explaining clearly to them their role in overseas operations, and giving them greater autonomy. Another factor affecting the success of Singaporean expatriates was related to the value of the assignment. Successful expatriates perceive that their overseas assignments open new career opportunities for them. They also value greatly the development of their skills during foreign assignments.

Unfortunately, at present there is still a dearth of qualified and professional HR managers in the region. In many organizations, the HR function is still not getting the attention from top management that it deserves. The ad hoc nature of HRM policies and practices in many companies in Singapore contributes significantly to the job-hopping phenomenon. As such, when HR managers lack the necessary skills to manage the HR function competently, line managers and executives take over some of the functions of HR managers. Khatri (2000b) noted that companies in Singapore do a poor job especially in the recruitment and selection of employees. Companies rarely use valid recruitment and selection strategies. The most common approach to selection was unstructured interviews, which are known to have low-predictive validity for performance. Performance management is also not a particularly well-managed function. Although there is great emphasis on training and development activities, they are often not aligned with organizational strategy and culture. Consequently, it is not clear how much value training and development programs are adding to organizational performance.

Companies in Singapore can be grouped into two broad categories in their management practices: (1) multinational corporations and their Singaporean subsidiaries headed mostly by senior managers from home country nationals or expatriates from other countries and (2) local Singaporean companies, government departments and government corporations headed by local Singaporean managers.

Practices and Challenges in Multinational Corporations and Their Singaporean Subsidiaries

As noted above, Singapore has a mix of multinational companies. These multinationals reflect the management philosophy and culture of their home countries. For example, Japanese multinationals emphasize “life-long” employment and use decision-making and compensation systems similar to Japanese organizations. Singaporean subsidiaries of American corporations tend to show greater goal-orientation and outcome-based management practices consistent with management practices observed in the United States (Khatri, 2000b).

Typically, middle and top managers of the Singaporean subsidiaries are non-Singaporeans, and junior managers and non-managers are Singaporeans, Malaysians and other foreign workers from the region. Multinationals have exploited this synergy between managerial abilities from home country nationals and disciplined and hard-working Singaporean workers to achieve a high level of performance and productivity.

As the Singapore economy continues to develop and open up, HR managers will have to recruit more and manage their global talents. Often, top managers, many middle managers and technicians who are specialists in their fields are foreign talent. Talent management and the effective management of diversity are crucial in the HR professional’s agenda. As noted by Landau and Chung (2001: 210):

Templer (2010) found that relational leadership skills, cultural openness and adaptability, and job knowledge were related to expatriate success criteria, such as an expatriate manager’s work adjustment, subordinate commitment, subordinate job satisfaction and unit performance. Most important was the personal attribute relational leadership skills, and it was the crucial success factor for expatriate managers’ unit performance. On the other hand, if a subordinate of an expatriate manager held ethnocentric attitudes against foreign talent then the expatriate manager showed lower work adjustment.

Practices in Local Companies/Government Departments and Corporations

Practices in local companies and government departments and corporations are an amalgamation of administrative systems inherited from the British and Confucian work ethics, strong authority and power distance orientation of the Chinese/Asian culture. The result is a highly structured, authoritative management philosophy.

One salient feature of the Singaporean management style is an emphasis on micromanagement. In local companies and government departments, there is a strong tendency in managers to micromanage organizational activities. Even relatively minor routine decisions are taken to the enterprise’s top for resolution.

Furthermore, voluntary feedback from the bottom is minimal. Subordinates are unwilling to openly express their opinions and disagreements due to fear of losing face or making someone else lose face. There exists a big chasm in communication between superiors and their subordinates because it is hard for subordinates to air their views to their senior managers. However, the education level of Singaporeans has increased steadily and they are also coming in contact with the outside world. Although they are used to taking orders and instructions from above, there is a growing sentiment/resentment against the authoritative management approach (Templer, 2003). It is not clear how the tussle between demand for more instruction from the top by Singaporeans and their need for greater say in decision making is going to be resolved.

HR in the next Five Years in Singapore

The economic development of Singapore has long been and still is heavily shaped by the role of the government. It is indeed an indispensable driving force in the strategic utilization of human resources in the country, accomplished through a well-established tripartite framework of government, employers and unions. The annual inflation rate in 2012 in Singapore was 4.6 percent (Singapore Department of Statistics, 2013). This figure may not sound much in comparison to many other countries; however, the impact on low-wage workers is of utmost concern to the tripartite bodies. While the long-term possibility of low-wage workers stuck at the bottom of the income hierarchy is real, this does not mean that the wages of low-wage workers should be substantially increased overnight. Any growth in wages must be backed by productivity gains.

For the immediate and medium term, the HR scene in Singapore will be dominated by three forces: first, the need to expand a capable and innovative work-force; second, the need to achieve continued productivity growth; and third, the need to ensure that the country’s elder workforce gain meaningful employment.

One way to build up a capable workforce is through continued education, training and development. This will increase the country’s pool of professionals and skilled workers and will nurture a life-long learning spirit among Singaporeans. This task has become more urgent because of Singapore’s own economic restructuring, the increasing shortening of product lifecycles, rapid technological breakthroughs and keener competition from both developing and developed countries.

Raising the productivity effort is crucial because this will help counter rising business costs and human power shortage. It also enhances the chance of upgrading low-wage jobs. Attaining the long-term target of 2 to 3 percent growth a year will not be easy. It requires perseverance and sustained efforts on the part of the workers, the employers and the government. Employers need to show workers that productivity growth does not mean more work with the same pay.

The Retirement and Re-Employment Act has been in force since January 2012. The adjustment process and coping strategies of older workers who are re-employed after they turn 62, or not offered re-employment, will be closely monitored by the government, the employers and the unions alike. Although older workers have lower turnover compared to their younger counterparts, they are more vulnerable to job loss and longer unemployment spells. This can be attributed to the preconceived notion among employers that they are less productive and less receptive to change.

Maintaining a good employer–employee relationship in a period of economic uncertainty and constant organizational restructuring is a critical HR function, irrespective of whether a firm is unionized or not. With a well-tested tripartite framework and various institutional structures and procedures in place, for example, the National Wages Council, the Ministry of Manpower and the Industrial Arbitration Court, it is up to the employers and their employees to decide how they should work together. For example, in a rare show of disagreement, the National Trades Union Congress (NTUC) and the Singapore National Employers Federation (SNEF) made public their different views on the foreign workers issue. The labor movement’s argument is that cheap foreign workers suppress the wages of locals, which discourages employers to recruit and grow locals (Toh, 2011). On the other hand, employers believe that sufficient measures and mechanisms are already in place to tackle this problem. Indeed, this is a highly sensitive issue in many other countries and, if not handled well, conflicts and industrial actions will result. In the Singapore context, policies/actions based on reasonable and pragmatic ideas will finally prevail.

There are changes taking place in the economy in the region. The twin cities of Hong Kong and Singapore prospered using pro-business economic strategies at a time when other countries and governments in the region relied upon socialist economic philosophies. However, other countries like Indonesia, Vietnam and Myanmar are following in their footsteps and opening their economies to foreign direct investment. The foreign direct investment that used to flow naturally to the two cities is not flowing at the same rate as before. Other countries are becoming more attractive because of size, natural resources and cheap labor. The Singapore government and policy makers do realize this challenge and are trying to create a niche (the Singapore brand) and looking for ways on how to have as big a slice as possible of the ever-bigger-growing economic pie in the Asia-Pacific.

Many of the guiding fundamentals adopted by the government since independence are still relevant to the present-day context – good government, an efficient infrastructure, a strong emphasis on education, open competition, pragmatism, high savings rate, fiscal prudence, a conducive business climate and international orientation. Not only do these contributing factors help explain the fast recovery from previous recessions, they continue to play a crucial role in shaping the country’s future.

Useful Websites

Department of Statistics, Singapore: www.singstat.gov.sg

Ministry of Education (MOE), Singapore: www.moe.gov.sg

Ministry of Manpower (MOM), Singapore: www.mom.gov.sg

National Trade Union Congress (NTUC): www.ntuc.org.sg

Singapore Human Resource Institute (SHRI): www.shri.org.sg

Singapore National Employers Federation (SNEF): www.sgemployers.com

Singapore Tripartism Forum: www.tripartism.sg

Singapore Workforce Development Agency (WDA): www.wda.gov.sg

Tripartite Alliance for Fair Employment Practices: www.fairemployment.sg

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