Will Singapore jobs be displaced because of Offshore hiring?
And the Solution to Retain Them
In the past few years, certain jobs in Singapore which were readily performed here are now being outsourced to other countries. India is the leading destination for offshore jobs. This has caused a lot of concern as to whether Singapore jobs will be displaced because of Offshore hiring.
There is no denying that the Offshore outsourcing has resulted in the layoff of a large number of Singapore jobs. The main reason for this is due to the fact that a lot of these jobs are being taken away to other countries. These people who are losing their jobs in Singapore cannot be absorbed into the rest of the economy.
Unfortunately, from a macroeconomic viewpoint, this is not good news for Singapore jobs because it means that there will be fewer job opportunities for locals and permanent residents here in Singapore. This is especially true if we take into account those people who have been retrenched and are unemployed now because their previous employer had decided to offshore their work overseas.
The argument then is whether the jobs which have been taken away to other countries can be replaced here in Singapore.
This is a valid question and the answer to this question depends on one very important factor — cost.
In a free market economy, if the cost of doing business in a certain country is lower than in another, then it follows that companies will choose to base their operations there.
As a result of this, the jobs for Singaporeans will be taken away to that country. This is what happened in India.
It has been reported that salaries for Indian IT workers are 30% cheaper than those in Singapore. As a result of this very low cost of labor and other factors such as education, Singapore jobs have been moving out of the country over the past 10 years.
However, it is not true to say that all jobs can be outsourced to other countries because if this were the case then why would any company ever set up a base here in Singapore?
The answer is simple — It’s because it gives them an edge over their competitors.
You may have heard of companies like Google and Facebook who have set up bases here in Singapore so as to take advantage of our excellent infrastructure and support from the government in terms of tax breaks and relaxation on immigration rules for foreign talent who want to work here. It also helps that we are located strategically near the rest of Asia and has good transportation links with Malaysia and Indonesia.
What is a viable solution to the problem?
In my opinion, there is no credible solution to the problem of offshore hiring. The best we can do now is to look at how we can position ourselves for the future so as to take advantage of this economic trend.
Singapore jobs will be displaced because of Offshore hiring and this will be one of the biggest challenges that our country will face in the next few years as it has been for the past 10 years.
However, it is not something that we cannot overcome if we are proactive about it. We need to work together as a people and government so as to formulate policies which allow us to take advantage of the Offshore economy.
In other words, it’s a case of “when” not “if” when it comes to offshore jobs in Singapore and other countries facing similar problems. If we are proactive about it then we can be one of the leaders in this economic trend.
It is a matter of strategy and planning and our focus should be on how we can capitalize on this trend instead of worrying about how it will affect Singapore jobs.
About the Author
I am the Founder of Cudy Technologies (www.cudy.co), a full-stack EdTech startup helping teachers and students teach and learn better. I am also a mentor and angel investor in other Startups of my other interests (Proptech, Fintech, HRtech, Ride-hailing, C2C marketplaces and SaaS). You can also find me on Cudy for early-stage Startup Founder mentorship and advice.
You can connect with me on Linkedin (https://www.linkedin.com/in/alexanderlhk) and let me know that you are a reader of my Medium posts in your invitation message.
