SINGAPORE – The Lion City is gearing up for a major overhaul of its Employment Pass (EP) framework, with sweeping changes set to take effect on 1 January 2025. The qualifying salary for new EP applications will jump to S$5,600 for general sectors and S$6,200 for financial services, setting a new bar for talent.

In addition, the COMPASS framework will require employers to score a minimum of 40 points for successful applications. This move is designed to give a leg up to workforce diversity, ensuring a more balanced mix of local and foreign professionals.

Starting 1 January 2026, these salary benchmarks will also apply to EP renewals. The updates aim to entice top-tier talent to Singapore, while ensuring fair play with local professionals by levelling the playing field.

Growing competition in Singapore's talent market

The upcoming salary thresholds are bound to send ripples through the foreign professional community currently working in Singapore. To stay in the game, workers will need to meet these higher salary demands, putting additional pressure on employers to adjust their compensation packages accordingly.

The shift is expected to ramp up competition in the job market. With salaries rising, employers will be forced to cast a wider net for candidates with specialised skills that are in short supply locally. The demand for highly skilled professionals will reach a fever pitch, and only the best will rise to the top.

For foreign professionals with fewer qualifications or less specialised experience, the new requirements could feel like a steep hill to climb. However, this presents an opening for those who can show they’re worth their weight in gold. Businesses will need to rethink their hiring strategies, prioritising the cream of the crop to ensure they stay ahead of the competition in an increasingly crowded marketplace.

Attracting high-quality global talent to Singapore

One of the most significant advantages of the new framework is its potential to attract high-quality talent to Singapore. With the rising salary benchmarks, the country is likely to become more appealing to skilled professionals, particularly in sectors such as finance, technology, and engineering. By offering competitive salaries, Singapore positions itself as a global hub for innovation and expertise, reinforcing its reputation as a prime destination for top-tier professionals from around the world.

In addition, the changes are expected to foster workforce diversity. The COMPASS framework, which requires employers to score points based on their ability to hire a balanced mix of local and foreign talent, will ensure that companies embrace inclusivity. This move not only broadens the talent pool but also encourages businesses to adopt more forward-thinking hiring practices, ultimately creating a more dynamic and robust workforce.

Maintaining a healthy equilibrium

Another key benefit of the new salary benchmarks is that they help level the playing field between foreign professionals and local workers. By increasing the qualifying salary, the framework ensures that foreign professionals are not undercutting local salaries, thus fostering fair competition in the job market. This will help maintain a healthy equilibrium, where both foreign and local professionals are rewarded equitably for their contributions.

Furthermore, the focus on specialised skills could lead to increased investment in upskilling and training programmes by employers. To meet the new requirements, businesses may choose to invest in developing the expertise of their current workforce, benefiting the long-term growth of Singapore’s economy and ensuring that companies remain competitive in an increasingly globalised market.

Increasing pressure on expats

However, the new framework is not without its drawbacks. One of the main concerns is the increased pressure it places on foreign professionals currently employed in Singapore. As the qualifying salary thresholds rise, many foreign workers may struggle to meet the new requirements for EP renewals. This could lead to job insecurity for those who are unable to secure the higher pay packages necessary to remain employed in the country.

For employers, the new salary benchmarks could result in higher operational costs. To comply with the updated framework, companies will be forced to adjust salaries, particularly for employees who were previously earning below the new threshold. This financial strain may be particularly difficult for small and medium-sized enterprises (SMEs), which may struggle to absorb the added expenses.

Moreover, the focus on specialised skills could disadvantage less-qualified foreign professionals. Those without the required expertise may find it increasingly difficult to secure or maintain employment in Singapore, especially as competition in the job market intensifies. This shift towards highly skilled talent may leave many foreign workers, particularly those in entry-level or general positions, struggling to keep up.

Lastly, businesses will need to reassess their hiring strategies, focusing on attracting the best candidates with specialised experience. This could result in longer recruitment cycles and increased competition among employers, potentially raising the costs of hiring. Companies that fail to adapt to these changes may risk losing out on top-tier talent to more agile competitors.

Balancing talent demands

While the new salary benchmarks and focus on specialised skills promise to elevate the quality of the workforce and enhance Singapore’s global appeal, they also introduce greater competition and financial pressure for foreign professionals and employers. The success of these reforms will ultimately depend on how effectively businesses and workers adapt to the new landscape, balancing the demand for high-quality talent with the need for inclusive and sustainable growth in the labour market.