From today, large and medium-sized companies looking to hire workers with a monthly salary below SGD 12,000 (USD 9,625) must advertise vacancies on a government-run job board that is only available to Singapore citizens and permanent residents, reports thestar.com.my.

The job must stay open to locals for two weeks before the company is allowed to seek foreign candidates.

According to analysts, Singapore risks tarnishing its business-friendly reputation by implementing new labour laws that require companies to prioritise hiring locals over foreigners for middle income jobs.

Many multinational corporations, from Google and Microsoft to Procter & Gamble and BP, use Singapore as their regional headquarters, attracted by the city-state’s political and economic stability, low taxes, and ability to attract talent from across Asia and the world.

Foreigners make up around 38% of Singapore’s 3.4 million strong workforce and the new rules are the latest in a series of government measures aimed at easing concerns about the growing presence of foreigners on the tiny island.

Concerns about jobs were one of the most prominent issues raised by voters at the 2011 general election, which was the most contested since Singapore’s independence in 1965. The ruling People’s Action Party share of the vote also slipped to around 60% from 67% in the previous election.

Economists said the foreign labour restrictions could tarnish the city-state’s reputation as an open and free economy.

“There is a risk that Singapore might slide down the scale in terms of how open it is,” said Chua Hak Bin, head of emerging Asia economics at Bank of America Merrill Lynch in Singapore.

Ten of 12 recruitment agencies polled by Reuters said that filling vacancies had become tougher in the past year, a trend set to continue.

“Singapore’s very strict policy when it comes to hiring foreigners will further exacerbate the skills shortage in Singapore,” said Chris Mead, regional director at recruitment agency Hays.

Several recruiters said that they expected a rise in companies moving certain departments offshore, with IT and manufacturing the most likely sectors to be affected.