5 Ways Businesses Need To Think About Hiring In 2022 (After Budget 2022 Statement)

Businesses Hiring in 2022

The past two Singapore Budget statements, in 2020 and 2021, included many support measures for businesses. Naturally, this was because of the immense pressure that COVID-19 forced on businesses.

Instead of having to fixate on immediate support measures because of COVID-19, Finance Minister Lawrence Wong focused on the post-COVID-19 world in Budget 2022. This included a significant portion on hiring and wages.

Here are 5 ways businesses need to think about hiring in 2022.

#1 Jobs Growth Incentive (JGI) Extended Till September 2022

The Jobs Growth Incentive (JGI) was first announced in September 2020 to encourage businesses to bring forward their hiring plans, and to keep existing employees.

The scheme provides salary support for new employees. The actual salary support has tapered off since the start of the scheme. For February and March 2022, the JGI continues to give 15% salary support for new local hires for 6 months, and 50% salary support for mature local hires above the age of 40 for 12 months.

This was set to end in March 2022, but, as we have seen, was extended in Budget 2022. From April 2022 to September 2022, the JGI will be extended for mature local hires above 40, and also cover those who are facing difficulties finding jobs (i.e. mature workers who have not been employed for a period of 6 months). This means that the scheme will end for the hiring of younger employees, under 40. Persons with disabilities or those who are ex-offenders will continue to be supported under the scheme.

Read Also: Guide To Understanding The Jobs Growth Incentive (JGI) For Companies Hiring Local Workers

#2 SkillsFuture Career Transition Programme (SCTP) Will Be Introduced From 1 April 2022

The SkillsFuture Career Transition Programme will a Train-and-Place scheme, replacing the existing SGUnited Skills (SGUS) and SGUnited Mid-Career Pathways – Company Training (SGUP-CT) programmes. These programmes end on 31 March 2022, and the SCTP will replace them from April 2022.

The SkillsFuture Career Transition Programme will include relevant industry courses, including actual work attachments and industry projects, for between 3 and 12 months. These courses will be delivered by Continuing Education and Training (CET) Centres and programme partners.

Read Also: SGUnited Traineeships & Mid-Career Pathways Programmes: How Employers Can Better Retain Their Trainees

#3 More Employers Can Tap SkillsFuture Enterprise Credit (SFEC) To Train Employees

To foster lifelong learning, $10,000 worth of SkillsFuture Enterprise Credits (SFEC) are given to employers to invest in transformation of their enterprise and their workforce.

Today, only employers with at least 3 local employees and contributed at least $750 of Skills Development Levy (SDL) over a qualifying period, are eligible to tap on SkillsFuture Enterprise Credits. These limitations will be waived from 1 January 2021 to 31 December 2021 – which will double the number of eligible employers from 40,000 to 80,000.

Read Also: SkillsFuture Enterprise Credit (SFEC): A One-Off $10,000 Grant For Companies To Transform Their Business And Upskill Employees

#4 More Costly And Greater Limitations On Hiring Foreign Workers

From September 2022, it will be more costly for businesses to hire Employment Pass (EP) and S Pass holders. 

The minimum qualifying salary for EPs will be raised from $4,500 to $5,000. EP holders in the financial services sector will see their minimum qualifying salary raised from $5,000 to $5,500. The qualifying salaries for older EP applicants will similarly increase progressive with age.

The minimum qualifying salary for S Pass holders will be raised from $2,500 to $3,000. Those working in the financial services sector will also see their minimum qualifying salary go up to $3,500. Older S Pass holders will also have their qualifying salaries raised with age. This minimum qualifying salary for S Pass holders will be further raised in September 2023 and again in September 2025.

To regulate the flow of S Pass holders, the sub-Dependency Ratio Ceilings will be adjusted. Tier 1 levies will also be progressive raised from $330 to $650 by 2025.

The Dependency ratio Ceiling or DRC for work permit holders will be reduced from 1:7 to 1:5. The current Man-Year Entitlement (MYE) will also be replaced with a new levy framework to encourage firms to support more offsite work and employ higher skillsed work permit holders.

Read Also: Guide To Work Passes In Singapore: Work Permits, S Pass and Employment Pass (EP)

#5 Higher Salaries For Lower-Wage Workers

In order to uplift wages for those who most require it, the Progressive Wage Model (PWM) will be extended to more sectors and occupations. Over the next 2 years, the PWM will cover the retail, food services, and waste management sectors, as well as occupations such as cleaners, security officers, landscape workers, admin workers and driver across all sectors.

Companies who want to hire foreign workers must also pay all their local employees the Local Qualifying Salary (LQS). This is currently $1,400, and is meant to uplift wages for locals rather than impose restrictions employing foreigners.

The government will also launch the Progressive Wage Mark or PW Mark for firms that pay Progressive Wages and the Local Qualifying Salary. To ensure firms are in compliance, the government will require all suppliers to be accredited with the PW Mark when they contract with them from March 2023.

To help businesses, a transitional Progressive Wage Credit Scheme (PWCS) will co-fund wage increases for lower-wage workers between 2022 and 2026.

For workers earning up to $2,500, the PWCS co-funding rate will be 50% in 2022 and 2023, and 30% in 2024 and 2025, before tapering off to 15% in 2026. A lower co-funding rate will also be given for workers earning above $2,500 and up to $3,000. 

Read Also: 5 Ways The Tripartite Workgroup For Lower Wage Workers Intends To Raise Salaries

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