How to hire employees in Singapore
Once you have decided to include hiring in Singapore into your international expansion strategy, how should you go about hiring staff? As an international business hub, Singapore is a cultural melting pot and this does introduce some unique features to the hiring environment in the city-state. Here we set out the key things you should consider when hiring in Singapore:
Guide for hiring in Singapore
Multinational corporations from Europe or North America often bring their own ‘western-style’ work culture. However, local Singaporeans, with a blend of Chinese, Malay and Indian influences often apply a more traditionally ‘Asian’ work culture. Key elements of this work culture include:
- Established hierarchies. With a strong Chinese and Confucian cultural influence, it is common for workplaces in Singapore to operate hierarchically. This means it is less likely for employees to question their superiors – especially in public;
- Co-operation. While traditional ‘western’ culture tends to emphasize individual success and personal achievement, in Singapore it is more common to prioritize the achievements of the group – people working together. One implication of this is that it may be frowned upon for individual workers in Singapore to be outwardly critical of the group;
- ‘Saving face’. As in China, it is important to employees and employers in Singapore not to ‘lose face’ in the workplace. This means that disagreements between the two should not be aired in public;
- Working hours. Normal working hours in Singapore are 40-45 hours a week. There is a half-an-hour to one-hour lunch break. The Employment Act restricts employees from working more than 12 hours a day;
- Multiple cultures. Multi-culturalism in Singapore means paying attention to cultural differences within the society. For example, the majority of Malay employees are Muslim, and may require special accommodations for prayers and food.
Recruiting in Singapore
Once you have decided to recruit staff for your business in Singapore, you will need to work out which exact roles will be required. In making this decision, it is worth considering the following matters:
- Domestic versus international employees (‘expats’). As Singapore is an international commerce hub, you might want to consider whether it is worth hiring any international, as opposed to solely local employees. Then, depending on your needs at the time, you need to consider whether your business should set up a separate legal entity;
- Local entity versus global PEO. Depending on the significance, size and permanence of your Singapore operations, you will need to consider the merits of setting up your own local legal entity (such as a subsidiary company) versus engaging the services of a global Professional Employer Organization (global PEO) to employ a workforce for you on your behalf;
- Compensation and Benefits. Consider both fair market pay for the positions that you are hiring for, as well as any pay restrictions for international workers;
- Engage a talent acquisition partner. Using a recruitment partner with extensive local networks can be an important mechanism for getting the best staff for your international business in Singapore.
Compliant hiring in Singapore
In order to hire in full compliance with Singapore law, the following matters must be taken into account:
- Minimum requirements in the Employment Act. This law sets out key requirements for employing workers and hiring in Singapore including maximum hours of work, overtime and compulsory contributions to the Central Provident Fund (‘CPF’)for Singapore citizens and permanent residents. Note, that this Act does not apply to managerial positions or equivalent professional positions (such as physician s or lawyers);
- Requirements for international workers (‘expats’). If you wish to include workers from outside the country when hiring in Singapore, you must ensure they have the appropriate work permits. The most popular work permit is the Employment Pass. This is available for suitably qualified foreign workers on a salary of SGD $3,300 or more per month. Applications for employment passes are usually processed within two months.
- Tax liability. Employee income taxes are withheld by the employer and paid annually;
Termination of contracts. Most employment and hiring in Singapore begins on a probationary basis (3-6 months). All going well, the employee is then appointed to a permanent position. It is common for employment contracts to make provision for severance pay in Singapore.