Singapore's Work Permit Changes Focus on Workforce Composition, Not Numbers Increase

Economists have explained that Singapore's recent move to abolish the limit on the duration of work permits and to raise the maximum age of workers does not imply an increase in the total number of foreign workers. Even with these adjustments starting from July, the actual quantity of foreign workers remains restricted by sector-specific quotas, known as dependency ratio ceilings, which dictate how many foreign employees a company can engage.

Under previous rules, work permit holders faced employment duration caps ranging from 14 to 26 years, varying with their skills, sector, and nationality. Some groups, such as those from Malaysia, Hong Kong, Macau, South Korea, and Taiwan, were already exempt from these duration caps. The changes taking effect this year will place all work permit holders under the same rules—where the only limitation is an increased maximum employment age, now set at 63 to match Singapore's local retirement age.

Experts noted that quotas significantly control the number of foreign workers, and those restrictions remain unchanged. For instance, the services sector quota stands at 35 percent, whereas for sectors such as construction and process industries, the quotas are higher, at approximately 83.3 percent. This adherence to existing quotas means modifications introduced will not produce an increase in absolute worker numbers, unless quotas themselves are revised or companies succeed in having more local candidates join their workforce.

According to official statistics, as of June 2024, Singapore employed about 843,400 work permit holders, exclusive of domestic employees. Analysts like Walter Theseira, Associate Professor at the Singapore University of Social Sciences (SUSS), highlighted that the primary aim of the policy adjustments is not quantity but quality—optimizing workforce composition and increasing retention of experienced workers.

Supporting this viewpoint, SUSS Associate Professor Terence Ho clarified that the government's intention lies in preserving expertise within industries and enhancing the skill level and productivity of the workforce. Additionally, experts have suggested further conversations may be needed regarding Singapore's social responsibilities towards long-standing migrant workers. Specifically, older migrant workers who have lived and worked in Singapore for extended periods may require greater attention to healthcare and possess deeper social connections, necessitating a review of the broader social compact with this important segment of the workforce.