Hiring employees in Singapore. What to know before you go:

Bret Silverberg
by Bret Silverberg

Singapore is one of the most open economies in the world and routinely receives accolades for one of the easiest places to do business. Situated at the tip of the Malayan peninsula, Singapore takes full advantage of being in the most strategic physical location in Asia.

With its pro-business government agencies, first class telecommunications and transportation links and highly developed financial system, Singapore is the perfect Asian expansion partner. The legal system is tough on corruption and offers strong protection for innovation and intellectual property rights.

Though doing business in Singapore is relatively straightforward, especially compared to other Asian countries, there are still a few set up and hiring obstacles that must be overcome.

Basic facts about Hiring in Singapore:

The biggest obstacle to hiring in Singapore is entity set up, although you will not need to set up a company at the outset if you use Globalization Partners’ Global Employer of Record solution in Singapore.

In order to set up an entity in Singapore, which any organization not using Globalization Partners’ services would need to do if they wanted to make a direct hire of a local candidate, a company representative authorized to legally obligate the organization usually needs to go to Singapore in person. For most companies, this means sending a member of the senior leadership team halfway around the world for what might be only one employee. For organizations testing the market or only thinking about putting one company representative on the ground, this requirement can be a show stopper; hence our suggestion to use our Employer of Record platform in Singapore.

Singapore is an incredibly diverse country and many companies hire non-Singaporean employees to head their Asian operations from a Singapore home location. Should you find yourself in the position of hiring an expatriate in Singapore, Globalization Partners can sponsor a work permit in Singapore for the candidate of your choice.

A 13th month or annual bonus is not required but is market norm in Singapore. A commission plan may be seen as replacing this for a sales employee. An annual bonus may be equal to 2-3 month’s salary when the economy is strong

Probation period of 3-6 months may generally be agreed to in the employment contract, during which there is a shorter notice period. This is not a statutory requirement.

Workplace Culture in Singapore:

Business is normally conducted in English in Singapore. Like many Asian countries, Singapore has a formal business culture though the social morays and etiquette vary depending on the background of the employee – Malay, Chinese or Indian. More than 70 percent of the work force is Chinese.

Networking, building rapport and fostering relationships are the pillars for doing business here. It’s important to talk about any success as a team effort. Contradicting management or doing anything publicly that would appear to cause a loss of “face” is frowned upon and avoided in Singapore. Punctuality is very important in Singapore and if you aren’t sure what to do in a particular business situation, it is always a good idea to follow the lead of the senior person on the team.

Collaboration and the group interest are put ahead of individual opinions and desires. There are strict rules governing just about every aspect of the Singaporean workplace. Being too bold, “coloring outside the lines” and not being cautious are not looked on favorably. Even in the more modern workplace, traditional values while not always demonstrated, are still deeply held.

The bottom line to smoothly navigating the workplace culture in Singapore is to be pleasant and agreeable, collaborative and respectful. If you have an issue, keep it discreet and discuss it behind closed doors.

Paid Time Off:

Singapore mandates the following paid holidays:

  • Chinese New Year (two days)
  • Christmas Day
  • Deepavali
  • Good Friday
  • Hari Raya Aidil Adha
  • Hari Raya Aidil Fitri
  • Hari Raya Haji
  • Hari Raya Puasa
  • Labor Day
  • National Day
  • New Year’s Day
  • Vesak Day (one day)

Annual leave: The market norm is 14 days. Although senior executives may ask for 3-4 weeks. Statutory minimum is 7 days plus 1 day for each additional year worked until the 8th year of service. From the 8th year of service onward, the legal minimum is 14 days.

Benefits:

Pension and Medical:

The CPF or Central Provident Fund is a statutory savings plan designed to provide retirement and medical benefits to all Singapore citizens. All employees who are Singapore citizens are required to contribute at varying rates up to 20%.

Basic insurance is provided through the national system. Supplementary health insurance may be provided to the employee as an additional benefit. Most executives request supplementary health and life insurance. Smaller companies typically provide an allowance in lieu of arranging insurance.

Best Practices:

Budget 20% in addition to the gross salary to cover benefits and the employer’s cost contribution to the CPF. Allow another .25% for the first $4,500 dollars of gross pay for the Skills Development Levy fund or SDF.

Put a strong employment contract in place that spells out the terms of the employee’s compensation, benefits, and termination requirements. The employment contract should show salary and other compensation in Singapore dollars rather than a foreign currency.

Termination:

One month’s termination notice on behalf of the employer or employee is the generally agreed term, but this is not fixed. If the notice period is not specified in the employment contract, the following applies:

  • Less than 26 weeks – 1 day
  • 26 weeks to less than 2 years – 1 week
  • 2 years to less than 5 years – 2 weeks
  • 5 years or longer – 4 weeks

Can a Global Professional Employer Organization (Global PEO) or Employer or Record help me hire in Singapore? Entity set up and the long flight it requires, negotiating Collective Bargaining Agreements, collecting tax and making payments can be overwhelming and potentially delay expansion. Using Globalization Partners’ unique blend of global PEO services and Global Employer of Record Platform allows you to hire the perfect candidate quickly without putting a member of your senior management team on a very long flight.

 

Bret Silverberg

Bret Silverberg

Director, Content Strategy, Globalization Partners

Bret Silverberg joined Globalization Partners in April 2017. He has 10 years experience working in content marketing and publishing.