THE Government's move to further tighten Employment Pass (EP) criteria has raised concerns that Singapore might lose some of its shine as a regional business hub.

However, human resource consultants say many firms here already prioritise local candidates for vacant positions.

They also note that Deputy Prime Minister Tharman Shanmugaratnam said in his Budget speech on Monday that the tightening of eligibility requirements for the EP workforce will apply especially to Q1 pass holders.

Q1 pass holders can include fresh graduates drawing about $3,000 monthly.

More senior EP applicants are covered by the P1 pass, which is typically held by professionals earning between $4,500 and $8,000, and the P2 pass, for professionals earning more than $8,000.

"Our clients are saying there's no need to go abroad to fill those (Q1) roles anyway, as there are enough graduates here," said Hudson Singapore's executive general manager Andrew Tomich.

Regardless of the role, 60 per cent of clients ask for local candidates whenever they have a job to fill, he added.

Mr George McFerran, the Asia-Pacific managing director of eFinancialCareers, agreed, saying that companies are now less keen to fork out the expenses required to hire expatriates.

Still, the tightening of EP requirements will have an impact on some firms' ability to expand, said ECA International regional director Lee Quane.

EP holders tend to be workers in middle management or senior roles - roles which the Government foresees more Singaporeans will be qualified to fill in the years to come, he noted.

"But we don't have enough Singaporeans yet. Singapore has pretty much a full employment rate, so if companies want to expand further, they can't rely on the local workforce."

Within financial services, the move to tighten EP eligibility criteria, especially for Q1 passes, may accelerate the shift of certain functions overseas, said Mr McFerran.

"Since the tightening of foreign labour began in 2010, we have witnessed an increasing number of banks in Singapore offshoring back-office operations elsewhere in the region and this is likely to continue."

There are also concerns about Mr Tharman's announcement that the Ministry of Manpower (MOM) will put in place a framework to ensure that firms give fair consideration to Singaporeans in their hiring practices.

He had noted, for example, that some countries require companies to advertise job vacancies to locals before they can apply for a foreign work pass.

But he added that MOM would not rush to adopt any such measures, and would consult stakeholders to develop a workable framework for Singapore. More details are expected during the Committee of Supply debates.

The Government should ensure that any framework it implements would not crimp Singapore's status as a regional business hub, said Mr McFerran. "MNCs (multinational corporations) like to place their management people around the world - for example, they might do two years in Paris and then two years in Dubai and then two years in Singapore, before moving back to the head office or taking on another role.

"So if the requirements are too tight, that might be problematic and hinder Singapore's efforts to be a global centre."

Others were less worried.

ECA's Mr Quane noted that Hong Kong has had such a framework in place for about a decade, and it has not lost its status as a financial powerhouse.

In Hong Kong, he said, employers have to prove that they have advertised a job vacancy in the media and interviewed local candidates for the position - but found none of them to be suitable - before they can get an approval to hire a foreigner.

This can be done by showing the authorities the resumes of the candidates.

Robert Half Singapore director Stella Tang was also unperturbed.

"From our experience, the search usually starts with local candidates even without a framework being in place," she said.

"Singapore employers already employ Singaporeans first as it just makes more economic sense from a business perspective.

"So, implementing such a framework will not really have a significant impact on Singapore's reputation as a financial hub."

Employers who spoke to The Straits Times affirmed her view.

"We need a very high level of trust with our employees so our policy is only to hire locals or permanent residents at this stage," said Mr Gilles Robert, the country manager of Metalor Technologies Singapore, a gold refiner.

"A foreign workforce is considered only for a few highly skilled engineers and managers to run the plant, so we are not worried by the tightening."

OCBC Bank's human resource planning head Jacinta Low said the lender always tries to fill vacant positions internally first before recruiting from external sources.

"This is in line with our belief in developing our people to support future growth. As of December last year, more than 25 per cent of our vacancies have been filled internally."

DBS Bank, meanwhile, said the changes would have minimal impact as the majority of its staff are Singaporeans and permanent residents.