Can’t Hire A Foreigner? Then Outsource It with 3E Accounting
Should you hire a foreigner or outsource your company needs? That is the dilemma many investors in Singapore struggle with.
Industries That Struggle With Finding Local Talent
Construction is one of the biggest industries in Singapore that struggle to find local talent. It is true that some Singaporeans may consider working in the construction industry due to higher pay and career advancement. But most locals still regard construction-related work as menial, if not dangerous.
The interest among Singaporeans in taking up jobs for technicians and technologists is also low due to perceptions of these jobs being reserved for foreign workers. The lack of interest also stems from the lack of recognition and career progression.
Hiring A Foreigner Versus Outsourcing
Hiring a foreigner to fill certain roles within your company that the locals might not be so interested in seems like the most obvious solution. Not only that, is hiring foreign workers the cheaper option? Not necessarily.
Bringing in foreign workers is not as inexpensive as you believe. A construction worker typically earns around S$800 per month in basic pay, However, each worker costs at least twice as much when you factor in the levy, accommodation and food costs, and overtime pay. Ah, that is something many investors often forget about or overlook.
Hiring a skilled foreign worker is comparable to hiring a local tradesman, including the levy as well as accommodation, laundry, and insurance. This means that for some employers, the issue may not be a lack of local applicants, but rather a lack of budget.
Another thing to consider is that employers who hire foreign workers on the Employment Pass and S Pass must pay higher minimum wages beginning in September. Employers looking to hire foreign workers will have to contend with paying them higher minimum wages for the third time in less than three years.
This is because Singapore raises salary thresholds for new Employment Pass (EP) and S Pass applicants. This definitely makes outsourcing certain functions to specialists like 3E Accounting a more attractive and viable option.
The Benefits of Outsourcing
When you choose to outsource rather than hire a foreigner, there are certain benefits that come with it, especially if you’re a new business owner. The number one factor is the costs involved. Companies choose to outsource for a variety of reasons, including lower operational and labour costs. When done correctly, it can have a significant impact on a company’s revenue recognition and deliver significant savings.
One of the primary benefits, when companies outsource or offshore, is the freeing up of internal resources. You could put the money to better use elsewhere. In addition, companies can offload functions that are difficult to manage and control while still reaping the benefits by delegating responsibilities to external agencies.
While Singapore should rely less on foreign workers by automating processes, the country still needs some foreign workers. Singapore requires a certain proportion of foreign workers and striking the right balance is critical.
Need Some Help?
If you need some help outsourcing certain business functions, 3E Accounting offers the solution to your every problem. We can help you with your entire range of business needs, from accounting, tax secretarial payroll, digital marketing and more.
Not only does outsourcing save you valuable time searching for the right employee, but it also costs your business less. For more information about 3E Accounting’s full range of services, get in touch with our friendly team members today.