March 13, 2025
SINGAPORE – higher-value jobs for locals while meeting the demand for rank-and-file workers, industry players told The Straits Times.
Companies in services and manufacturing also welcomed an expansion to a list of occupations for which they can hire work permit holders from more locations, with more job roles and more locations added to the list. The surprise addition of Bhutan as one of the new places where employees can be sourced will let firms access a whole new profile of workers, observers said.
Minister for Manpower Tan See Leng had announced on March 6 that from July 1, there will be no hard cap on the maximum duration that work permit holders can work here – a move that industry players said is one of the furthest-reaching labour policy changes in recent years.
Currently, these workers can work in Singapore for only between 14 and 26 years, depending on their skill level and country of origin.
With the change, work permit holders – aside from migrant domestic workers, who fall under a slightly different regime – will be able to work till the prevailing retirement age, which is now 63.
One worker who will benefit from the lifted cap is Mr Sethu Rajinikanth, a facility executive at Singapore shipbuilder Strategic Marine.
If this cap were not lifted, Mr Rajinikanth, who has worked for the company since he came to Singapore 17 years ago, would be able to work here for only another nine years due to the 26-year limit on his work permit.
Under the new rules, Mr Rajinikanth, who is 48, will be allowed to continue working here for about five years longer.
He said he feels greater job security with the pressure of the employment limit lifted, as he can continue building his career in Singapore and save up more for his future.
“Otherwise, I might have to go home or find work in another country,” he said, adding that he enjoys the variety of tasks he gets to do, which includes overseeing repairs and coordinating the work of contractors.
Mr Rajinikanth, who is an Indian national, also said he looks forward to mentoring younger workers at his workplace.
Mr Ivan Koh, Strategic Marine’s chief corporate finance officer, said these changes will help the firm maintain a higher level of experienced staff, making the company’s operations more stable and efficient.
That said, Mr Koh noted some potential challenges, such as managing higher healthcare costs and adapting work processes to these workers’ physical capabilities.
“Nonetheless, the benefits of preserving institutional knowledge and enhancing workforce continuity far outweigh these challenges,” he said.
By reducing the required frequency of recruiting and training new hires, the move will also let the firm better plan its workforce development and pipeline of skilled workers for the long term, he said.
Out of 238 work permit holders currently employed by Strategic Marine, 12 of them are aged 50 and above.
Many have a maximum tenure of 26 years, in view of their higher skill levels, with five workers having worked for Strategic Marine for more than 14 years already, Mr Koh said.
Meanwhile, the removal of employment duration limits for work permit holders will especially help employers in the process industry retain welders, equipment fitters and field supervisors.
The process industry includes manufacturers of petroleum, petrochemicals, speciality chemicals and pharmaceutical products, as well as firms that build and maintain the plants of these manufacturers.
“These jobs require deep technical expertise and years of hands-on experience, yet remain hard to fill with local workers due to their specialised nature,” said Mr Wayne Yap, executive director of the Association of Process Industry.
Despite the latest rule change, Mr Yap said manpower constraints remain a challenge. Foreign worker quota and levy requirements for the sector were recently tightened in 2024.
“This (new) policy provides much-needed flexibility, but companies must continue adapting to ensure sustainable workforce planning.”
The moves help address persistent manpower shortages that manufacturing firms face, while enabling continued investments in automation, advanced manufacturing technologies and innovation, said Mr Lennon Tan, president of the Singapore Manufacturing Federation (SMF).
Beyond the changes to maximum tenure and maximum age, the sector will also get to tap the Non-Traditional Sources Occupation List to a greater degree.
The list was introduced in September 2023 to let services and manufacturing employers hire manual labour on work permits from a wider range of locations, rather than employing them under an S Pass, to ensure a higher skills bar for the S Pass as originally intended.
However, employers must pay those hired on the list at least $2,000, and these workers must account for 8 per cent or less of the employer’s total headcount, excluding Employment Pass holders.
A range of manufacturing operator roles will be among those added to the list come Sept 1, though exactly which roles these are remains to be seen.
Mr Tan said: “We also appreciate the government’s balanced approach in complementing foreign manpower policies with ongoing efforts to develop local talent through initiatives like SkillsFuture.
“This ensures that Singaporeans continue to take on higher-value roles while foreign workers help sustain essential operations.”
He also said the inclusion of manufacturing operator roles on the list fulfils a “longstanding request from the industry”.
“Manufacturing segments such as precision engineering, electronics, aerospace and medical technology stand to benefit the most,” Mr Tan added, saying that these segments have faced manpower challenges that affect productivity and competitiveness.
Typically, employers in services and manufacturing can hire only work permit holders from China, Malaysia, Hong Kong, Macau, South Korea and Taiwan.
For roles on the occupation list, the net has widened to Bangladesh, India, Myanmar, the Philippines, Sri Lanka and Thailand, as well as Bhutan, Cambodia and Laos, with effect from June 1.
Bhutanese workers will likely appeal to employers who need work permit holders with higher English proficiency, such as front-line service roles, according to Mr Joni Herison.
He is director of Gems Partners Network, a recruitment agency specialising in linking employers to Bhutanese workers, who can already be hired on an S Pass or Employment Pass.
This is because, unlike in most of the other source locations, English has been the language of instruction in Bhutan’s schools since 1964, which he said ensures most young people from the landlocked Himalayan nation are fluent in the language.
He added that employers in aviation services and hospitality have already contacted his firm to express interest in hiring workers from Bhutan on work permits.
Hiring from traditional sources can be difficult because of limited availability or higher expenses, said Ms Cindy Lee, senior vice-president and Singapore country head at human resources services firm Adecco.
“While this move is welcome for offering a larger talent pool, industry leaders should be aware of the importance of a careful integration process, including support for adapting to local work conditions and cultural differences.
“Ensuring workers meet industry standards is crucial, particularly in sectors like semiconductor manufacturing.”
Another change Dr Tan announced was a longer support period for the Manpower for Strategic Economic Priorities (M-SEP) scheme of three years – from two years currently – and an expanded list of what counts towards eligibility for it, from May 1.
Launched in December 2022, the scheme lets firms deemed to advance Singapore’s key economic priorities temporarily hire slightly more foreign workers than prevailing S Pass and work permit quotas allow for their industry.
On this, Mr Tan of the SMF said the federation is aware of companies that have benefited from M-SEP, particularly those in high-tech manufacturing, automation and advanced production sectors.
This ensures critical projects can proceed without workforce constraints, which he said ultimately strengthens Singapore’s position as a global hub for advanced manufacturing.
Still, he added in reference to the entire basket of moves the sector could benefit from: “Manufacturers must also appreciate that while these measures provide temporary relief, long-term workforce resilience depends on continuous investments in skills development, upskilling local talent and creating higher-value job opportunities.”
The last of a three-step increase to the S Pass qualifying salary and levy will also kick in for new applications from Sept 1, 2025, and for renewals of passes expiring from a year later.
Though the final increases have been moderated in the light of businesses’ cost challenges, Ms Lee said employers will likely have the least room for manoeuvre to meet the increases in industries already facing tight margins or labour shortages, especially in services.
“Employers with limited room to meet the increase may adjust by re-evaluating their workforce composition, upskilling workers, improving productivity and relying more on local talent.”
Summing up the changes, she said: “The gradual increase in S Pass qualifying salaries, along with the moderation to ease cost concerns and the introduction of new non-traditional sources (for the) work permit reflect a flexible approach that supports businesses while encouraging upskilling and productivity improvements.”