The Future for Expats in Singapore
The sombre outlook for 2017 may signify changes for many employees who are unsure about their prospects in a declining Singapore economy. Uncertainty becomes even more apparent for those whose roots do not belong here – the expatriate community. There are rumours circulating the grapevine that there would be a major exodus of expatriates in Singapore given the slower economy and impending recession. In this article, I intend to dispel this myth that all expatriates are exiting the country. In my opinion, it is not true. It is simply an evolution of the type of expatriates who decide to stay or to leave the country.
Flashback ten to twenty years ago when expatriates arrive in Singapore with promises of hefty remuneration packages, relocation allowances and other perks and privileges. The 2008 global financial crisis saw the demise of expatriate packages after multinational companies began instituting cost controls to weather the crisis. Whilst some companies do offer a one-time relocation benefit to foreign employees, most companies in Singapore have now removed any expat benefit. Reasons for the removal of such benefits include the attractiveness of Singapore as a place to live and work in (with Singapore topping the table of the best expatriate destinations in 2016) as well as the lower tax rates compared to their home countries. It, therefore, appears that there is really no need to provide added perks or privileges to give expats a much-needed push to get them to work in Singapore. According to a survey by HSBC in 2016, more than 60% of expats said they were earning more in Singapore than they did in their home country and that they were also saving more.
Remuneration packages aside, there is also another factor which has caused an emergence of a new group of expats – the younger, technologically savvy crowd who have come to Singapore to seek further studies such as obtaining MBAs from prestigious institutions here and expats who have come to Singapore to set up their start-ups or pioneer tech revolutions such as Uber. The “expat-preneur”, a term coined by Dr Yvonne McNulty of SIM University, refers to an expatriate who chose his/her destination country to seize market opportunities based on both their lifestyle and business decisions. In an interview with the Wall Street Journal, Cameron Priest, co-founder of TradeGecko.com cited the strong infrastructure and support from the Singapore government as one of the key factors he chose Singapore. Expat-preneurs also find South East Asia an enticing location for start-ups as it provides accessible and affordable resources which allow start-ups to bootstrap their businesses more comfortably as compared to Western countries.
Besides start-ups, industries such as banking are witnessing a dip in the number of expatriates in Singapore as these industries are being replaced by industries such as financial technology, private equity and wealth management in family offices. The hiring shift towards change, digital and transformation has seen a decline in specialist expatriates and a move in favour of more generalist expatriates. In the banking industry, “career bankers”, the highly skilled and highly paid specialists who “know only what they see and see only what they know” have been increasingly replaced by professionals with transferable skills. The lack of public trust in financial institutions has shown that this shift is inevitable for banks and financial institutions to stay afloat.
It is, therefore, a myth to say that there is a major exodus of expatriates in Singapore. It is merely an evolution of the type of expatriates, a sign of a slowly evolving economy. For expatriates who are already in Asia, the focus of these expatriates would be to stay in the region rather than move excessively as we slowly ride out the recession.