Foreign Labour Construction

While the approach of supplementing the workforce with low-cost immigrant labor had worked well for Singapore, black swan occurrences like the pandemic had revealed the system’s flaws.

“After COVID-19 swept through the worker dormitories last year, businesses in the construction industry came to a complete stop for at least two months, amidst the implementation of circuit breaker,” said Kelvin Seah Kah Cheng, of National University of Singapore.

“Other industries that rely largely on low-skilled workers from neighboring countries, such as food and beverage, cleaning, and manufacturing, struggled to find solutions when many of their employees were unable to return to Singapore due to border restrictions and personal choice.”

In April, the Ministry of National Development said that a significant number of current Build-To-Order (BTO) projects will be postponed owing to labor shortages.

Seah said in an article published by Channel News Asia (CNA) that the construction industry employs about 300,000 foreign employees.

“With no modifications to existing manufacturing techniques, ending our reliance on foreign labor completely would need the employment of 300,000 locals in construction,” he added.

These 300,000 locals might be engaged in other fields, where they might make a significant contribution.

“In other words, assigning local Singaporeans to the construction industry may come at a significant cost of opportunity.”

“In reality, when one considers that Singapore had one million foreigners on work permits in 2019 and another 200,000 on S-pass, it becomes apparent that getting such a huge number of locals to take on occupations presently done by low and mid level foreigners is unrealistic,” Seah added.

Companies would have to alter their production techniques and raise salaries in areas dominated by low-skilled foreign labor to attract locals, in order to decrease dependence on foreign employees.

For example, transforming the building industry by moving “towards higher-tech methods of manufacturing would not only enable us to decrease our dependence on foreign labor, but will also result in better pay in the building sector,” according to Seah.

Despite the availability of sophisticated construction technology such as rebar tying, bricklaying robots, and self-operating autonomous equipment, Singaporean construction companies have traditionally relied on more labor-intensive methods.

They have been opposing automation and newer technology for three reasons: redesigning the whole manufacturing process would be a massive undertaking; these labor-saving technologies are costly; and businesses misunderstand the advantages that such technology may provide.

Furthermore, some businesses may have been content with the status quo.

Companies in the construction industry, however, “would have by now realized the disadvantages of being excessively dependent on foreign labor,” according to Seah.

He said, “Perhaps this is exactly the push needed for reform.”