A Guide to Recruitment in Singapore
Singapore is constantly ranked one of the best places to do business. US News placed it first in its 2021 rankings; Forbes, eighth.
This is thanks to a society that believes strongly in the free market.
In any case, this is why more and more people are setting up shop on the island. If you plan to join their ranks and need to start recruiting in Singapore, there are certain rules you need to follow.
Join us as we cover these regulations in our guide below.
Important Things to Note for Employers
Language
One of the first things to note is that Singaporeans use several different languages. English may be the standard working language, but most Singaporeans also know a second language.
Mandarin Chinese is perhaps most common, along with Malay and Tamil. This can be an advantage if your company aims to do business with people in locations that speak those languages.
Compensation and the Work Week
Most employers are astonished when they learn that there’s no mandated minimum wage. There are regulations for breaks, overtime pay and working hour limits, however.
As an example, if a job naturally requires an employee to put in 8 continuous hours of work, meal breaks of at least 45 minutes must be provided.
Meanwhile, overtime pay is pegged at 1.5x the worker’s normal pay. Workers are eligible for it if they are non-workmen with salaries of up to $2,600 or workmen with salaries of up to $4,500.
For more on these and limits on employees’ working hours or overtime hours, see what the Ministry of Manpower or MOM has to say here. MOM is actually going to be one of your main references for recruitment policies in Singapore.
Key Employment Terms
The Employment Act requires employers to provide the terms of employment to employees in Singapore. Basically, this is the employment contract.
These are some of the things covered by the terms of employment:
- Details of employment
- Working hours
- Breaks and rest days
- Salaries
- Leaves and medical benefits
- Place of work
- Probation periods
For more details, see MOM’s guide here.
Annual Leave
MOM also has requirements for the number of leave days to grant full-time workers. It’s affected by how long an employee has spent in your company, though.
In their first year, they get 7 days of paid leave per annum. The formula adds one more day of paid leave for each year the worker spends in your employ, with a cap of 14 total days of paid leave.
While this is the official formula, most companies simply grant all employees the 14 total days of paid leave from the first year of employment, however.
Withholding
Contributions to employees’ Central Provident Funds or CPFs are mandatory in Singapore.
The CPF is a state savings and pension plan for Singaporeans and Singapore Permanent Residents. As an employer, you’re charged with paying total CPF contributions for employees – that includes both the employee contribution and yours.
There are caveats here too. You’re only required to pay a CPF contribution if your employee makes more than $50 a month, for example.
Yet, if your employee makes less than $500 a month, the total CPF contribution will include only your contribution – your employee won’t be required to make a contribution from his paycheque.
Anyway, both employee and employer CPF contributions depend on employee age, more than other things. Consult the table on this page to see the requirements per age bracket.
Cost of Recruitment in Singapore
The cost of hiring people in Singapore isn’t as straightforward as some think. Usually, people only count the actual wages of the new employees when totting up projected expenses.
In reality, there are a number of other factors that may add to your costs. Here are some of the most important (and common):
Business Registration
This is a given. You need to register your company, which often involves fees. Some also hire others to take care of the entire business registration process for them, which involves further costs.
Job Advertisement
Most websites and publications will only allow you to advertise an opening for a fee. There are exceptions, but these are usually unregulated, which means you may find your ad next to less savoury ones.
Travel Costs
The most obvious reason for these expenses would be face-to-face interviews for applicants.
However, don’t forget that you also need to travel to Singapore to set up your business, as a lot of things will require your business to actually have a representative within the country.
Recruitment Agencies
These aren’t necessary, of course, but many people turn to recruitment agencies in Singapore when they really can’t find the talent they need.
Obviously, these agencies charge fees for placements, usually based on what the talent would earn in the first year of employment.
Background Checks
This is par for the course when you’re building a workforce. You’ll likely spend money getting professionals to verify applicants’ credentials and CVs, ensuring they have no bad marks in their employment records, etc.
Legal Services
You need a law firm to ensure that your company isn’t falling afoul of any regulations. You may have to pay them to draft or review your contracts, check your key employment terms, etc.
The Requirements for Hiring in Singapore
Before you actually start taking on employees, you should know that the Singaporean government requires a number of things from you. Here’s what you legally need to hire people in Singapore:
- Company registration - You can do this at ACRA. As long as you’re carrying out for-profit activities on an ongoing basis and are at least 18 years old, registration is necessary. However, you can find exceptions here.
- CPF registration - As noted earlier, this is required of most employers. You can do it here.
- Licences or permits (if required) - This is dependent on your business and if it’s in an industry that requires licences, e.g. liquor distribution.
How to Hire
Here’s a rundown of the basic steps to recruiting people in Singapore:
Publish job openings
You can post job openings in a number of places, from online job boards to traditional publications like newspapers and magazines. Nowadays, the former are more popular among companies.
Remember to be clear about what the job opening is for. Describe the responsibilities, benefits, role title, and so on.
Narrow down the candidate list
Formulate a preliminary screening process based on your needs. Do you need people with experience in a particular field? With a specific certification? A rare competency?
Note those things down and pass them on to your HR. They can help you sift through the first batch of candidates and winnow them down to a more manageable number of suitable applicants.
Interview candidates
At interviews, make sure you don’t focus on just testing the candidate. At this point, you should also be aware that the candidate is testing you.
Go into interviews with the mindset that you’re there to convince the applicant to take the role. This will help you land the applicant more easily if he does turn out to be what you want.
Remember too that you can go with both face-to-face and virtual interviews now.
Make a job offer
When offering a job, be sure to provide the key employment terms in the contract you provide a candidate. You can go back to our previous notes for more info.
Onboarding
Welcome your new employee by ensuring everything is set up, from his orientation and training programme to his CPF. Make a checklist of things to cover so you don’t end up missing anything.
See our other HR guides
That covers virtually everything you need to know about recruiting in Singapore. For more advice on how to handle HR in Singapore, explore our other guides.
You can also contact us to tell us about more HR processes that you would like details or help with.
