Efficiency In The Workplace: A Case Study

Firms are grouped into categories and are represented by tiers. The tiers here represent the firm’s dependency on foreign workers. For example, in Tier 1, foreign workers only account for 10% of the firms total workforce, and has low dependency. While in Tier 3, foreign workers account for 25-40% of the firms total workforce and has high dependency on foreign workers.

The levy placed on foreign workers increases as a company’s dependency of the foreign workers increases. The levies placed on unskilled workers are also significantly higher than that of skilled workers. However, this decreases as the tiers increases.

The levy placed on unskilled worker is dependent on the firm’s dependency on foreign workers. For firms in Tier 1,

Although the policy helped with domestic employment in the short run, with 60% of the companies interviewed deciding to close down outlets, cut down their workforce or relocate, this could lead to a decrease in supply of workers as there are less job openings for domestic workers and also a decrease in demand for domestic workers as firms are not hiring or relocating, leading to unemployment in the future.

The policy could have negative impacts on the firms that decide to stay in Singapore in the future. As firms in food and beverage operate in perfect competition, a type of market structure with many firms and sell homogenous goods, competition between firms is very strong, it is already very hard for firms to survive. The market is already very saturated and with the foreign worker policy, increasing cost of workers, decreasing supply of workers combined with other factors such as high rent, firms in food and beverage will find it harder to survive.

For firms to survive, they must be able to differentiate themselves from competitors and “plan around the policy and rethink hiring plans by focusing on local talents in order to survive and