COMPASS: moving the needle for Singapore’s foreign employment
The new EP application system will help companies hire better qualified foreign professionals to strengthen Singapore’s workforce.
Immigration compliance is one of the most challenging, yet understated consideration for businesses. Due to various socioeconomic factors, regulations are constantly evolving. While businesses strive to comply with the latest immigration regulations for their business needs, it can be hard to keep up-to-date on the latest developments.
The Singapore Ministry of Manpower (MOM) has made numerous changes to its work pass regulations over the years. The Fair Consideration Framework (FCF), the FCF Watchlist and adjustments to the eligibility criteria for work passes are some of these changes. Through these changes, MOM continues to ensure that companies invest in a strong Singapore workforce and grow with the Singapore economy.
In October 2021, the taskforce comprising the National Trades Union Congress and Singapore National Employers Federation put forward a recommendation paper to protect the interests of local professionals, managers, and executives (PMEs). Amongst the suggestions, the taskforce proposed enhancement to the Employment Pass (EP) applications review process by incorporating a points-based system that looks beyond an individual’s personal attributes. The MOM had reviewed the recommendations and subsequently accepted most of the recommendations.
Amidst growing calls for a more transparent work pass framework, the MOM introduced the new points-based Complementarity Assessment Framework (COMPASS) in Budget 2022, which aims to provide clarity in the assessment of work pass applications and attract foreign professionals, who will complement the local workforce. COMPASS is a major addition to the work pass regulations since the introduction of the FCF.
What is COMPASS?
Following the COVID-19 pandemic and heightened concerns on the employment support for the local workforce, COMPASS is part of the Government’s initiative to attract quality foreign professionals that better complement the existing needs of Singapore’s workforce. COMPASS evaluates an EP application based on a holistic set of individual and firm-related attributes. In addition to the prevailing EP criteria, the foreign candidate will also need to pass the COMPASS framework by scoring a minimum of 40 points to qualify for the EP. Points under COMPASS will be awarded based on four foundational attributes (salary, qualification, diversity and support for local employment) and two bonus criteria (skills and strategic economic priorities).
COMPASS will take effect from 1 September 2023 for new EP applications. It promises to be a transparent system that will help employers select high-quality foreign professionals and at the same time, build a diverse talent pool. For renewal of the existing EP applications, the COMPASS framework will apply to EP application renewals one year later, from 1 September 2024.
According to the MOM, the introduction of COMPASS demonstrates that Singapore remains open and welcoming of foreign professionals as they uplift the economy and strengthen the local workforce. The COMPASS framework seeks to ensure that incoming foreign candidates can meet specified standards by achieving the minimum passing score. Some of the adjustments include raising the minimum qualifying salaries to ensure that work pass holders are of the right quality.
How should businesses prepare for the change?
With COMPASS, businesses will have more clarity on the work pass assessment factors. The MOM highlights that a good majority of the EP applications today would not have issues meeting the COMPASS requirements. In any case, a lead time of more than one year is given and companies should use the opportunity to prepare for the change.
Through COMPASS, the MOM assesses the firm-related attributes by classifying companies into relevant sectors based on their principal business activity as declared to the Accounting and Corporate Regulatory Authority (ACRA). Sectors refer to the industry classification structure based on the Singapore Standard Industry Classification (SSIC), such as the manufacturing or financial services sector. Businesses should therefore review its primary business activity and update ACRA (if necessary) to ensure the declared business activity is current and accurate.
One of the main objectives of COMPASS is to ensure that companies maintain a diverse workforce and hire high quality foreign talent. The MOM will subsequently roll out a workforce profile tool to provide an overview of the company’s workforce profile and see how the company’s local professionals, managers, executives and technicians (PMETs) share compares to that of industry peers. Employers can utilise the information and analyse their internal workforce (e.g., employee diversity) and locals-to-foreigners ratio. Companies with many foreign employees of the same nationality may wish to relook their recruitment strategy and shift their focus to attracting more locals. A diverse workforce helps companies shift away from being overly reliant on a single nationality source, and brings about new perspectives and creativity. Diversity will ultimately contribute to a more inclusive and resilient workforce. With more data and information being released by the MOM, companies can also perform a check on the renewal eligibility of existing work pass holders and make plans accordingly.
COMPASS seeks to nurture companies that can contribute to Singapore’s innovation-driven economy and reinforce her economic position to create better opportunities for Singaporeans. Scalable businesses with the ability to create quality job opportunities for locals may consider partnering with the Singapore government in select programmes to demonstrate commitment.
How does Singapore’s COMPASS compare to other countries and how may it evolve?
A points-based system is not new as other countries such as Canada, Japan and the UK have a similar system. Common features of the points-based systems include tradeable attributes and bonus points. Both of such features are available in COMPASS. In comparison, the points-based systems in the other locations generally consist of only, or more, personal attributes such as salary, skills, qualification, experience, and language ability.
For example, in the UK, points are allocated to individual characteristics with some being mandatory and others being tradeable. Under the company-sponsored work pass approach that we have in Singapore, COMPASS has been set up to maintain a well-balanced mix of individual and firm-related attributes. This is consistent with the government’s objective of encouraging companies to have a diverse workforce, with the foreign and local workforce complementing each other.
COMPASS is seen as a part of the MOM’s FCF Watchlist. Once COMPASS is fully rolled out, the FCF Watchlist will be repurposed to focus on engaging businesses that score poorly on firm-related attributes. The MOM currently places companies with poor human resource (HR) practices on the FCF Watchlist. Companies on the watchlist face delay in their work pass applications and must work with the authorities to improve their company’s employment practices before they can exit the watchlist. Compared to the FCF Watchlist, COMPASS is a self-regulating assessment system on its own. For example, companies who score badly on the firm-related attributes would likely have trouble applying for work passes and will continue to face issues until they make acceptable improvements.
As observed with previous regulation changes, it is also almost certain that COMPASS will be refined over time. For now, there are only four foundational criteria, of which none is mandatory. A company will be able to bring in a strong candidate even if it performs poorly from the corporate’s front. It is also possible for a well-performing company to bring in an average or below-average candidate. To meet the MOM’s objectives in ensuring that employers bring in high-quality individuals and improve diversity and local employment, there is a possibility that further down the road, individual and firm-related attributes may be assessed separately where passing points on both sides must be met.
Companies who are unable to pass COMPASS may turn to the S Pass instead. As the Government aims to ensure S Pass holders are comparable in quality to the top one-third of the local associate, professionals and technicians, it will come as no surprise that COMPASS will eventually be implemented for S Pass, where requirements on individual-related attributes are more tailored to mid-skilled workers.
Countries are seeking to attract highly skilled talents into their economies. In Japan, the points-based system differentiates the highly skilled professionals from the standard work visa holders. We anticipate that differentiated work pass processing privileges may apply to some applicants in the years to come. This will be similar to the existing Human Capital Partnership programme, which companies or members that are identified as exemplary employers get to enjoy.
COMPASS is driven by data and allocates points accordingly without the need for companies to furnish additional documents for manual processing. By laying down the assessment factors in COMPASS, the MOM appears to be streamlining its process. With that, it is unlikely for MOM to introduce other elements that may hinder their assessment process. If they do, the additional points should be easily quantifiable.
Conclusion
Singapore’s manpower stance remains unchanged as we continue to focus on attracting foreign investments and welcome foreign talent. COMPASS will help guide companies to bring in higher calibre, better qualified foreign professionals to boost local employment while positioning Singapore as a global hub. The upcoming points system will in no way compromise efficiency as many companies are expected to pass the COMPASS framework. For the struggling minority, they will need to relook their business model and recruitment strategy to move forward. Over time, MOM can be expected to utilise this new tool to refine the criteria and lead companies to achieving the desired workforce outcomes.
The co-authors of this article are Panneer Selvam, EY Asean People Advisory Services — Integrated Mobile Talent Leader and Lily Cheang, Associate Partner and Singapore Global Immigration Leader, People Advisory Services — Mobility from EY Corporate Advisors Pte. Ltd.
