A new working visa regime that was introduced in Singapore on 1 August 2014 will make it harder for companies to employ foreigners, but recruiters are divided on the long-term effect of the new legislation, reports afr.com.

Called the Fair Consideration Framework (FCF), the new legislation requires any company employing more than 25 people and filling a role that pays a base salary of below SGD 12,000 per month (USD 9,514) with a foreigner to prove that it gave qualified Singaporeans a chance to apply.

If a foreigner is hired, the company must produce proof that the job was advertised on the new government jobs board for at least 14 days. The rules do not apply to intra-company transfers.

Chris Mead, Regional Director for Hays Singapore, warned: “We have yet to see any impact, but it is likely to exacerbate existing skills shortages. Employers continue to struggle to attract the highly skilled and experienced professionals they need, especially in technical areas like IT, banking, construction and engineering. However, it’s now more difficult for foreign candidates to gain work in Singapore, particularly when they are looking to move to the region and are not based here.”

Toby Fowlston, managing Director for Robert Walters Singapore explained that the legislation hastens a move towards local hiring that has been underway for some time: “There’s no question that all of our clients are committed to hiring Singaporeans.”

Singapore has a population of 5.4 million, about 29% of whom are foreigners. That figure does not include those holding permanent resident visas. As the proportion of foreigners has increased over the years, the government has been under pressure to slow a trend that makes some in this city state feel uneasy.

According to both the Hays and Robert Walters 2014 salary guides, SGD 144,000 (USD 114,166) per annum is a typical mid-level managerial salary in accounting, IT, and banking. It’s the amount expected by a shared services finance manager, an internal audit manager, and a tax manager. It’s what a project manager in engineering would receive, and in financial services it’s at the lower end of what a portfolio manager would receive.

Therefore, the number of roles paying slightly less than that and affected by the change, is considerable.

Despite Singapore’s steady rise as a banking and IT centre, because it has long been both accessible to foreign workers and an appealing place to live and build a career, its businesses have been able to draw freely on a global workforce. Ready access to human capital kept a lid on salaries and slowly reduced the differential between multinational and local company compensation packages.

Only salaries in legal and compliance roles, where demand for talent is highest in Singapore, tend to be clearly above the FCF’s cut off point, according to the Robert Walters salary guide.

Whether the rules will increase salaries in high demand areas and have a negative impact on the vibrancy of Singapore’s business culture in the long run or not, they will certainly impose an additional administrative and reporting burden on companies.

Mr Mead stated: “Expatriates are still in demand in certain industries. Banking is one example where foreign owned banks operating in Singapore need to hire for their parent company regulatory reporting team. For example, British banks in Singapore still need to report back to the Bank of England and other relevant authorities. These regulations differ to local regulations, and employers usually require candidates who have specific regulatory reporting experience.”

Mr Fowlston added that the steady stream of applications he receives from non-Singaporeans hasn’t slowed, but as employers start to show a marked preference for cultural fit it’s getting harder for those without either singular skills or experience in southeast Asia. The FCF raises the bar further.