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Beginner’s Guide on Starting an Employment Business in Singapore
Compared to the previous year, Singapore’s economy showed promising signs and grew by 1.3% during the first quarter of 2021. With the country steadily recovering from the pandemic, the economy is bound to improve. In that process, companies will be looking forward to starting their businesses and subsequently expanding it. Meaning, more jobs will be created – and this is fantastic news for job seekers everywhere!
Singapore’s competitive market and attractive tax rates have made the country a highly desirable place to conduct business. The Lion City has locals and foreigners from all around the world who want to work there. And they can definitely use the help of an employment business to get hired seamlessly!
Starting an employment business in Singapore is a lucrative idea, provided if you execute it well. This article will be walking you through what it takes to create an employment business, industry practices, and business procedures. We’ll also let you in on where you can find reliable and quality help to set up your company. Check out our guide to company registration in Singapore for more information!
Let’s get down to business.
What is an Employment Business in Singapore?
An employment business refers to agencies that help other companies with their staffing needs. Also known as staffing agencies, recruitment agencies and employment firms, these businesses are essentially a bridge, interlinking employees to employers. Employment businesses responsibilities include vetting and running thorough background checks on various candidates and their respective accreditations. Through this medium, companies will then source these approved candidates from employment businesses. Typically, an employment business is like the middle man between individuals wanting to be hired and companies looking to hire.
Employment agencies save a lot of time for everyone. Local and international companies can approach employment agencies and straightaway acquire the filtered candidates. With this, they save lots of time and energy that would otherwise have spent countless hours going through applications. Working with a staffing agency allows businesses to hire candidates quickly. Apart from that, sourcing employees through employment businesses will enable companies to have exclusive access to a high-quality talent pool.
Employment agencies come in handy for all business sizes, especially smaller and newer companies looking to grow their business but lack experience in hiring candidates and negotiating salaries. Staffing agencies allow flexibility for companies. Aside from permanent candidates, one can hire freelancers and ad-hoc employees as well. One of the biggest benefits of hiring applicants through employment business is the reduced legal challenges. On behalf of your company, the staffing agency will face bigger legal risks.
Importance of an Employment Business for Job Seekers
Applying through an employment business can be advantageous to applicants too. Traditionally, people looking for jobs would fill in their information or make accounts to apply on employment websites. However, applying through these websites one by one would take up much time. Also, sending in one’s resume application by a recruiter would enable them to have a bigger reach in a hassle freeway. Apart from that, some staffing agencies help recruits prepare for interviews and give constructive feedback for their betterment.
Undeniably, setting up a business be somewhat overwhelming – all the more if you are a one-person army. If you prefer a hand business setup, you can always reach out to company incorporation experts to help you delegate the work. Company incorporation services in Singapore can assist you in setting up your employment business swiftly.
How Does an Employment Agency Operate?
When a company needs more staff, they will approach an employment agency. These companies will then specify several vital details regarding the job description and what they are looking for in a candidate, such as:
- Duties and responsibilities
- Number of staff needed
- Required qualifications
- Personal characteristics
- Work time and salary range
- Compensation and benefit
The employment agency will then devise an advertisement for the said job description. Consequently, the agency will start recruiting suitable candidates and contact the potential applicants for the job. After this, is vetting process takes place. The agency will interview candidates and filter the best applicant for the company. Next, the employment agency will set up a meeting with the company and the candidate. From here onwards, the selection and approval will be made by the hiring manager. If everything goes well and the candidate successfully gets the job, the staffing agency will handle the arrangement and paperwork.
Staying on Top of the Business Registration Process
Starting an employment business in Singapore is the same as starting any other business here. First of all, you will need to formally register with the Accounting and Corporate Regulatory Authority (ACRA). Registering with ACRA has plenty of benefits for your company. It provides transparency to your business. In this way, your clients and audience will be able to look up information and verify details pertaining to your employment business. Thus, they will be more confident in business dealings and transactions with your company.
Prior to that, make sure you have figured out a business name (that is non-trademarked), business nature and its activities, key personnel, such as directors, shareholders, secretaries and other staff. One of the most crucial decisions you will make in business is selecting the right business structure. In Singapore, there are several structures to choose from, namely, Sole-Proprietorship, Partnership, Limited Partnership (LP), Limited Liability Partnership (LLP) and Company. Even in the same industry, one business differs from the other. Therefore, choose an entity that is suited for your vision and goals. Do keep in mind that there are plenty of factors to take into account before settling on a business entity, such as the number of owners, capital, legal status, tax obligations, exit strategy, etc.
The Permits You Need for Starting an Employment Business
The government of Singapore necessitates all employment firm Employment Agency (EA) License. Depending on the type of workers you wish to recruit, there are four types of EA licenses to choose from:
Comprehensive Licence (All)
This licence is for all types of workers.
Comprehensive Licence (Local)
This license is for local workers only.
Comprehensive Licence (non-FDW)
FDW refers to foreign domestic workers; this license is for local and foreign workers (FDW excluded).
Select Licence (SL)
This licence is reserved for workers with a monthly income of more than $4500.
Note that all prior to holding a Comprehensive Licence, one must first obtain a Certificate of Employment Intermediaries (CEI). Having a CEI ensures that all your crucial appointment holders, such as general managers, CEOs, CFOs, etc., and other relevant personnel, are well versed with the employment laws and regulations. The certificate set the standards of quality for employment agencies in Singapore.
Applying for the CEI requires you to attend a 40-hour course (for key appointment holders) or a 32-hour course (for employment agency personnel). Key appointment holders must be certified, regardless if they carry out employment agency duties or not. This is not the same case for other personnel; only if they have recruiting responsibilities do they need to obtain the CEI. For more details on CEI, click here.
Registration with the Ministry of Manpower
Furthermore, employment agency personnel are required to register with the Ministry of Manpower (MOM) officially. Upon registering with MOM, employment agency personnel will be issued a standardised registration card. An employee can only work for a single employment agency at any given time. Keep in mind that the registration is not transferable between companies. Hence, employees who choose to switch to another employment agency will have to deregister themselves first and reapply under the preferred company.
A fee of $160 is charged per registration. Finally, registration is not mandatory for key appointment holders and other agency personnel if they do not perform any recruiting duties. You will receive a notification to renew your license when you are two months away from your expiration date.
A corporate service provider plays a significant role in establishing a business. You can always navigate through the business registration process by yourself. However, if this is your first time setting up a business, there may be mistakes here and there. Incorrectly filling up an application or applying for unnecessary licenses is bound to take much of your time. Naturally, making mistakes in business is a part of the learning process, but what if you had an incorporation expert to handle the business registration matters on your behalf?
Here’s What We Can Do for You!
We understand that starting an employment business in Singapore can be a daunting task. Setting up a business here is a straightforward process, but there are still many bases that you will have to cover yourself. So, why not leave the technicalities to the experts while you focus on the core competencies of your business?
3E Accounting has more than a decade of experience and is internationally recognised for its comprehensive business solutions. Our dedicated team has assisted thousands of satisfied clients all over the globe, and you can be one of them too! With our excellent track record of success, you can rest easy while handling all the nitty-gritty aspects of developing your company. Our digitised incorporation packages utilise cutting edge technology so you can stay one step ahead of the rest. Contact 3E Accounting to get your business off the ground today!