THE growth of mid-tier incomes, the strengthening of the Singapore dollar and the narrowing of salary differentials between Singapore and cities such as Tokyo, London and New York have enabled more employers here to offer their foreign hires localised deals instead of the expatriate packages of old.
Additionally, with lower taxes and a lower cost of living, many internationally mobile executives find that Singapore allows them to stretch their dollar further than in many of these other cities - even though the latter may offer higher gross salaries. These trends give employers here a competitive advantage in attracting talent from around the world.
Lee Quane, regional director of HR consulting firm ECA International, said the economics of hiring has become more complex. "Executives around the world now look beyond the gross salaries offered to them. Things like tax rates and even cost of living have to be taken into account as they would indicate how much more your dollar could work for you. So, for example, an executive in Shanghai may find that he is offered a lower gross salary than in New York, but due to the lower taxes and cost of living, his dollar in Shanghai could do more for him than in New York."
But not only lower tax rates and costs have made Singapore a more attractive option for executives looking to relocate. "You will notice that the salaries and incomes of Singaporeans in the middle-bracket have increased over the last few years and so, gross salaries now in Singapore are also higher than they were," explained Mr Quane.
"Moreover, with the Singapore dollar appreciating the way it has over this period, it has also meant that the value of the dollar earned here is worth much more now. What this has done is to reduce the salary differential between Singapore and these other cities like New York and Tokyo, where gross salaries were traditionally higher." This has helped companies, considering that there has also been a change in the composition of the foreign workforce here. "If you look at 10-15 years ago, the demographics of the expat pool here has changed, as now you have mid-level executives and those with specific skills compared to before when they were mainly senior or top management."
The demand for such jobs here has increased over time with businesses expanding in line with economic growth in Singapore. And since the supply of labour is finite, alternative sources of mid-level and specialised talent were needed, he said.
Hence, the growing appeal of Singapore to such executives in terms of relative incomes has helped employers here as they now not only have a competitive edge over employers in many other cities in attracting talent, but also in keeping their costs low.
"Although the senior and top-level management from overseas may still get their expatriate packages, employers now are able to offer localised packages to other executives as these are now competitive globally. So employers in Singapore benefit."
However, the relative attractiveness of Singapore can also create problems for some companies, Mr Quane explained. "While middle managers in Singapore now command significantly larger salaries than their contemporaries in many other Asian countries and enjoy considerably higher buying power, an assignment from Singapore to elsewhere in the region on a local salary is unlikely to be considered competitive unless additional benefits are provided on top."
So it seems that the tables have now turned for some Singapore companies: Those exporting local talent to their overseas offices find that they have to pay expatriate packages, even as they pay localised packages to foreign executives coming here.