COVID-19 highlights drawbacks of being overly dependent on foreign labour

Cheryl Chiew14 Jun 2021

However, overhauling the construction industry in Singapore to be less reliant on foreign labour and to use more advanced construction technologies is still a huge task.

While the strategy of augmenting the workforce with low-cost foreign labour had served Singapore well, black swan events such as the pandemic had exposed the dangers of this strategy.

“Businesses in the construction sector came to a virtual halt for at least two months last year after COVID-19 swept through the worker dormitories and a circuit breaker had to be imposed,” said Kelvin Seah Kah Cheng, Senior Lecturer in the Department of Economics, National University of Singapore and a Research Affiliate at the Institute of Labour Economics (IZA).

“Businesses in other sectors like F&B, cleaning, and manufacturing which relied heavily on low-skilled workers from neighbouring countries also struggled to find solutions after many of their employees were unable to return to Singapore owing to border restrictions and personal choice.”

The Ministry of National Development had even revealed in April that a large portion of ongoing Build-To-Order (BTO) projects would be delayed due to manpower concerns.

In an article posted in Channel News Asia (CNA), Seah shared that about 300,000 foreign workers are currently employed in the construction sector.

“Ending our dependence on foreign labour entirely, with no changes made to current production methods, would mean that 300,000 locals have to be employed in construction,” he said.

These 300,000 locals may be employed in other sectors, where they are potentially making impactful contributions. 

“In other words, redeploying Singaporeans to the construction sector potentially involves high opportunity costs.”

“In fact, when one considers that in 2019, Singapore had some one million foreigners on work permit and another 200,000 foreigners on S-pass, it becomes clear that getting such a large number of locals to take on jobs currently performed by low and mid skilled foreigners is unrealistic,” said Seah.

To reduce reliance on foreign workers, companies would have to change their production methods and increase wages offered in sectors dominated by low-skilled foreign labour to attract locals.

Transforming the construction sector, for instance, by shifting “towards higher-tech ways of producing will not only allow us to reduce our reliance on foreign labour but will also lead to higher wages in the construction sector”, explained Seah.

But despite the presence of advanced construction technologies such as bricklaying robots, rebar tying, and self-operating autonomous machines, construction firms in Singapore have leaned on more labour-intensive modes for a long time.

They have been resisting automation and newer technologies for three reasons—overhauling the whole production process would be a mammoth task; these labour-saving technologies are expensive, and companies underestimate the benefits that could be reaped from such technologies.

Moreover, some companies may have been more comfortable with the status quo.

Nonetheless, Seah said companies in the construction sector “would have by now realised the drawbacks of being overly reliant on foreign labour”.

“Perhaps this is just the impetus needed for change,” he added.

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Cheryl Chiew, Digital Content Specialist at PropertyGuru, edited this story. To contact her about this story, email: 


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