Businesses worldwide, particularly those from the Western hemisphere, consider Singapore a launching pad for the Asian markets. Consequently, increasing holding corporations and subsidiaries are established within the city-state. According to the World Bank’s Easiest of Doing Business rankings, Singapore is the world’s finest place to do business. Over the past three years, Singapore’s average firm incorporation growth rate has reached 8%.
On September 1, 2023, Singapore launched the Complementarity Assessment Framework (COMPASS), a new point-based system for Employment Pass (EP) applicants. The new method, which will also apply to EP renewals starting September 1, 2024, was intended to draw more highly qualified foreign nationals to Singapore for employment and residence. COMPASS framework Singapore grades applications according to pay, qualifications, diversity, and skills gaps. This entails a move away from conventional work pass approvals and towards a structured, point-based system for HR professionals and global mobility managers. The goal is to maintain a balanced workforce while allowing companies to attract top talent worldwide.
Key Changes for Employers Due to the COMPASS Framework
With the implementation of the COMPASS framework, Employment Pass applications will now be evaluated transparently and using data rather than relying on discretionary approvals. Employers now need to be aware of the following significant developments and adjust their employment practices accordingly:
Points-Based Evaluation
EP applications are now evaluated using a scoring system; candidates must receive at least 40 points to be eligible instead of a binary approval or rejection.
Emphasis on Workforce Diversity
The importance of workforce diversity can result in higher results for businesses with a highly localized workforce and lower scores for those that rely too heavily on imported talent from a single nationality.
Sectoral Talent Needs Prioritzation
Prioritizing sectoral talent needs ensures that Singapore addresses important skills gaps by awarding extra points to applicants for positions in high-demand industries, particularly those on the Shortage Occupation List (SOL).
Salary Competitiveness is the Most Important
To make sure that international hires do not drive down local salaries, employers must compare pay to market rates.
Due to these modifications, HR professionals must modify their hiring practices and guarantee adherence in order to obtain work permits through the COMPASS system.
How COMPASS Impacts Hiring Foreign Employees in Singapore?
The COMPASS Framework impacts hiring foreign employees Singapore in various ways. The most common are discussed below:
Salary Benchmarking
Eligibility is based on a minimum qualifying monthly salary compared to the earnings of the top one-third of the local PMET (Professionals, Managers, Executives, and Technicians) workforce to guarantee the calibre of EP holders.
Except for financial services, all sectors’ minimum qualifying monthly salary rises gradually from SGD5,000 at age 23 to SGD10,500 at age 45 and beyond. The minimum qualifying monthly salary for financial services increases from SGD5,500 at age 23 to SGD11,500 at age 45 and beyond. These wage thresholds were applied to EP applications starting September 1, 2022, and to EP renewals starting September 1, 2023.
Scoring-Based Work Pass Approval
The COMPASS software will use a collection of personal and business-related characteristics to assess a candidate’s potential contribution to the local economy. Suppose candidates or the hiring company are judged to meet or surpass expectations. In that case, they receive points: 20 points for “exceeding expectations,” 10 points for “meeting expectations,” and 0 points for “failing to meet expectations.”
Each applicant is evaluated based on four fundamental criteria:
Salary
All candidates must fulfil the above-mentioned EP qualifying salary criterion. COMPASS also considers industry variations in pay standards. Points are awarded when an application satisfies the age-adjusted, sector-specific PMET salary standards by percentile.
Qualifications
10 points for a degree-equivalent qualification and 20 points for a degree from a prestigious university. Employers are responsible for verifying that a candidate’s credentials are authentic and come from recognised universities. Candidates can still receive enough points under other criteria even if they lack degree-equivalent credentials, as qualifications are not prerequisites.
Diversity
Applications in which a candidate’s Country accounts for a small percentage of the hiring company’s PMET employees (20 points if less than 5%, 10 points if between 5 and 25%) (all employees earning at least SGD3,000 per month) receive extra points from COMPASS. No points are awarded if a candidate’s nationality accounts for more than or equal to 25% of the hiring company’s PMET employees.
Support for Local Employment
Suppose the hiring form shows a comparatively high proportion of Singaporean nationals among its PMET employees compared to its peers in the same subsector. In that case, the application receives more points (20 points within the 50th percentile, 10 points between the 50th and 20th percentile, and 0 points below the 20th percentile).
Candidates must receive at least 40 points overall to qualify for an EP. But applicants can additionally receive extra points for meeting two “bonus” requirements:
Skill Shortage
Singapore’s Ministry of Manpower has developed a Shortage Occupation List (SOL) to address skills shortages in six industries. EP applicants can earn up to 20 COMPASS extra points when they fill out an occupation on SOL. If a candidate’s nationality accounts for one-third or more of the PMET employees on a hiring form, this is lowered to 10 points. The SOL is evaluated yearly.
Strategic Economic Priorities
The SEP incentive is available to companies engaging in aggressive labour reform, innovation, internationalism, or investment initiatives. For each submitted EP application, firms that receive the SEP bonus will receive 10 bonus points on COMPASS. Businesses must engage in qualified initiatives, show a dedication to local workforce development, and receive assistance from sector agencies or the National Trades Union Congress. Forward-thinking businesses are also eligible through the Company Training Committees of NTUC.
Strategies for HR Managers to Navigate COMPASS
In order to attract and retain top foreign talent in Singapore, HR managers must use strategic initiatives that assure COMPASS compliance. Here are some essential tactics for successfully navigating the framework:
Optimise Workforce Diversity
HR managers should strive for a well-balanced nationality mix in their personnel to optimise COMPASS scores. While companies with a large percentage of employees from a single nation may be penalised, those with a very diverse staff gain extra points. Businesses can accomplish this by expanding their recruitment efforts internationally and implementing diversity-focused hiring practices. Prioritising sectors like technology, finance, and healthcare where foreign experience is crucial can also guarantee adherence to Singapore’s labour laws while preserving operational effectiveness.
Ensure Competitive Compensation Packages
Gaining approval under COMPASS requires offering competitive compensation. To meet or surpass expectations, employers must compare compensation to market rates. Businesses may draw in and keep top-tier foreign talent by ensuring their pay plans meet Singapore’s industry norms. Salary modifications should also consider industry-specific workforce shortages, allowing companies to make alluring offers that satisfy COMPASS requirements and guarantee business continuity.
Leverage Bonus Points for Skills Shortages
Additional points under COMPASS are available to organisations who hire for jobs on the Shortage Occupation List (SOL). To increase the likelihood of approval for work passes, HR managers should concentrate on hiring foreign workers with experience in these in-demand industries. Candidates’ eligibility might be further increased by encouraging them to seek advanced degrees from internationally renowned universities. To satisfy industry demands and improve their applications, employers might also upskill current staff members.
Plan for Future Work Pass Renewals
Long-term workforce planning is crucial since COMPASS will be applied to both new EP applications and renewals that started in September 2024. Companies can take proactive measures to assure compliance by evaluating how changes in hiring practices affect their foreign talent strategy. Organisations can reduce the risks associated with work permit renewals and avoid talent shortages by creating hiring roadmaps that align with changing policies.
Engage Professional Visa and HR Advisory Services
Successful COMPASS navigation necessitates professional assistance. HR managers can collaborate with expert visa and HR consultancy services to expedite HR employment pass Singapore approvals. These experts offer customised visa plans, risk evaluations for compliance, and practical application assistance. Hiring experts helps organisations stay current on policy changes and regulatory requirements while ensuring that work passes are processed smoothly.
To learn more about how to navigating the COMPASS Framework, check out our article on 8 expert tips to navigate COMPASS.
Conclusion: Is It Still Possible to Relocate Foreign Emplyees to SIingapore Under COMPASS?
Yes, but it calls for flexibility and meticulous preparation. With a stronger focus on industry-specific labour shortages, salary benchmarks, and workforce diversity, the COMPASS framework signals a substantial change in Singapore’s work permit clearance procedure. Businesses that depend on foreign talent may face difficulties with the new system, but those that adopt a calculated approach can successfully hire and relocate foreign workers.
Being knowledgeable and flexible is essential in a hiring climate that is becoming more and more controlled. Businesses will be in a better position to draw and keep top foreign talent in Singapore if they accept these changes and incorporate them into their personnel strategy. Securing Employment Pass approvals and Singapore work pass updates are the areas of expertise for our HR and visa advising team. For professional assistance with COMPASS and guaranteeing a smooth relocation of a foreign employee, get in touch with us.
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