The Singapore Law Gazette

The Point of COMPASS: Guiding in the Right Direction

On 4 March 2022, the Minister for Manpower announced the Complementarity Assessment Framework (COMPASS), a points-based system intended to lend greater transparency to the existing employment pass (EP) application framework. COMPASS facilitates the government’s ability to, in a principled manner, manage the quality of foreign manpower while encouraging employers to (i) maintain a healthy local-foreign hire ratio, and (ii) hire from a diverse mix of nationalities; a welcome introduction overall. Prior to COMPASS taking effect in September 2023, more precise information on how the Ministry of Manpower will assess each COMPASS criterion will be rolled out in phases.

Introduction

Complementarity has been widely accepted as the guiding philosophy of Singapore’s immigration policy. The proposition that foreign talents should be introduced to complement and not compete with the Singaporean workforce is fairly uncontroversial.¹Tang See Kit, “The Government will always be on the side of Singaporeans, says PM Lee amid job concerns”, CNA (2 September 2020) <https://www.channelnewsasia.com/singapore/government-always-on-side-singaporeans-jobs-lee-hsien-loong-586171> Faced with a limited domestic labour supply, Singapore must vie to attract a healthy quantity and quality of foreign talent to maintain its status as a global business hub. The rhetoric that foreign workers can contribute to the economy to the benefit of all Singaporeans is one that is familiar to us all. A rising tide resulting from such talent inflow should lift all boats.

The aforementioned interest, however, must be balanced with mounting and legitimate concerns within the local populace over perceived increase in competition for a limited supply of domestic jobs, such concerns having been exacerbated by COVID-19 induced economic uncertainty. At the heart of such fear is the suspicion that some employers may be more inclined to hire foreign workers since they are relatively “cheaper” to employ (as they are not eligible for Singaporean-specific statutory entitlements such as Central Provident Fund contributions) or simply because some employers prefer to hire their own kind.²See the following remarks by MP Foo Mee Har: “Singaporeans believe that they are being passed over for jobs that they can do because foreigners come cheaper, without the employer having to pay for CPF contributions and deal with National Service obligations, or simply because employers prefer to bring their own friends and families from overseas to fill” (Singapore Parliamentary Debates, Official Report (31 August 2020) vol 95)

This article therefore examines how the Singapore government intricately balances the above competing interests by way of the Complementarity Assessment Framework (COMPASS) announced on 4 March 2022. Specifically, this article will first explore various immigration policies abroad that might have informed Singapore’s decision to move toward a points-based system. Second, it will discuss potential issues surrounding the uncertainty and under-inclusiveness of COMPASS. Third, it will comment on how COMPASS encourages employers to develop / maintain a healthy ratio of local-foreign workers and mix of nationalities within their workforce. Finally, it will reiterate the need to put in place sufficient measures to deter employers and Employment Pass (EP) applicants from submitting false / manipulated information for the purposes of scoring points.

An Overview of COMPASS

COMPASS is a points-based rubric that assesses both individual and employer-related attributes in scoring EP applications. Alongside extensive parliamentary debates on the need to strengthen the quality of foreign manpower, COMPASS was conceptualised following recommendations by the NTUC-SNEF PME Taskforce to introduce a points-based system which “factors in: i) sectoral input; ii) whether the employer has been hiring and developing local workers; and iii) the diversity of nationalities within the company“.³See full report at < https://www.ntuc.org.sg/wps/wcm/connect/5087e53c-6524-4ae7-94d5-128bb7eef13a/NTUC-SNEF+PME+Taskforce+Report.pdf?MOD=AJPERES&CACHEID=5087e53c-6524-4ae7-94d5-128bb7eef13a> The Minister for Manpower assures that COMPASS is a “fairly nuanced framework” that was a result of “many months of data analytics, in terms of the hiring patterns, based on diversity, based on qualifications, salaries and also the concentration of PMETs within the firm“.⁴Singapore Parliamentary Debates, Official Report (4 March 2022) vol 95 (Dr Tan See Leng, Minister for Manpower)

After COMPASS is in place, EP applicants must satisfy the following in order to qualify for an EP:

• meet the increased qualifying salary of SGD 5,000 per month (or SGD 5,500 per month for employers in the financial services sector – such qualifying salaries to increase with the applicant’s age);⁵This applies to new EP applications from 1 September 2022. and
• score a minimum of 40 points under COMPASS.⁶This applies to new EP applications from 1 September 2023 and renewals from 1 September 2024.

For ease of discussion, the number of points that can be earned under COMPASS based on the “foundational” and “bonus” criteria prescribed by Ministry of Manpower (MOM) are set out below:

Foundational Criteria	Attributes	Points
C1: Salary (individual)	≥ 90th percentile relative to local Professionals, Managers, Executives and Technicians (PMETs7PMETs are proxied by employees earning at least $3,000 per month.) in their respective sectors by age	20
	65th to 90th percentile	10
	< 65th percentile	0
C2: Qualifications (individual)	Top 100 universities based on international rankings, Singapore’s autonomous universities and highly recognised vocational institutions	20
	Degree-equivalent qualification8This refers to (i) foreign qualifications that are assessed to be comparable to a bachelor’s degree in the UK system (MOM determines this with reference to international recognition bodies, e.g. the UK National Information Centre for recognition and evaluation of international qualifications and skills (UK ENIC)) and (ii) professional qualifications that are well-recognised by the industry and endorsed by a relevant sector agency.	10
	No degree-equivalent qualification	0
C3: National diversity (firm-related)	Share of applicant’s nationality among employer’s PMET < 5%	20
	5% to 25%	10
	≥ 25%	0
C4: Support for local employment compared to peers within same subsector (firm-related)	≥ 50th percentile	20
	20th to 50th percentile	10
	< 20th percentile	0

 

Bonus Criteria	Attributes	Points
C5: Shortage Occupation List – Singapore does not have sufficient local employees possessing the applicant’s skills (individual)	Job on the Shortage Occupation List	20
	Share of applicant’s nationality among the firm’s PMETs is one-third or higher	10
C6: Strategic Economic Priorities Bonus – employer meets specific strategic economic assessment criteria (firm-related)	Employer is undertaking ambitious innovation, hub or internationalization activities in partnership with government	10

An EP applicant is exempted from COMPASS if he/she satisfies certain requirements⁹Where the EP applicant (i) earns at least SGD 20,000 per month, (ii) is applying as an overseas intra-corporate transferee under the World Trade Organization’s General Agreement on Trade in Services or an applicable Free Trade Agreement or (iii) is filling a role for one month or less. similar to the Fair Consideration Framework (FCF) job advertising exemptions. To account for the drastic fluctuations in workforce ratios for smaller firms, firms with fewer than 25 PMETs score 10 points on criteria C3 and C4 by default. MOM has clarified that COMPASS is not designed to make it harder for businesses to obtain an EP. In fact, the majority of current EP holders will be able to pass COMPASS.¹⁰Singapore Parliamentary Debates, Official Report (4 March 2022) vol 95 (Dr Tan See Leng, Minister for Manpower).

Given that there is well over a year before its implementation in September 2023, further details on COMPASS will be announced in due course.¹¹See the following remarks by Minister for Manpower Dr Tan See Leng: “there is still time for us to see when it comes to the implementation, how we can actually get a set of nuanced data for everyone to be able to access and also to understand” (Singapore Parliamentary Debates, Official Report (4 March 2022) vol 95); See also <https://www.mom.gov.sg/faq/compass/can-i-find-out-more-information-on-how-my-ep-application-will-fare-on-compass>

A Global Look at How We Got Here

A points-based immigration system is not novel. Countries that have adopted a points-based system to control inflow of skilled talent include Canada, Australia and the United Kingdom. Under a points-based system, governments came up with a list of attributes that they deem desirable for prospective immigrants to possess and accordingly award points for each attribute. The precise list of attributes and weight assigned to each attribute are country-specific, depending on prevailing societal attitudes and strategic interests. Most common attributes across points-based systems are professional / educational qualifications, prior work experience, and language ability.¹²Native language skill is perhaps something that has less to do with an applicant’s merits and more of a social integration tool, as featured in the immigration policies of the United Kingdom and Canada. Points-based systems therefore control the labour market from the supply side; prospective immigrants are screened and allowed entry based on select criteria and possessing a job prior to arrival is not always a strict requirement.

Employer-led systems are often cited in contrast to points-based systems. Under an employer-led system, employers directly select immigrants based on the skills / qualifications needed for the job that cannot be filled by the domestic workforce. For this reason, the market can respond to labour shortages in real time and match labour demands directly with suitable foreign talent i.e., it is a demand-side policy. On top of securing a job prior to arrival, there may be additional requirements such as meeting a threshold level of education, salary etc. The employer-led system largely resembles the EP application process that Singapore presently has in place.

Each of the above models has its own inherent advantages and disadvantages.¹³For an overview of the two models, see Kerr, Sari Pekkala, William Kerr, Çağlar Özden, and Christopher Parsons. 2016. “Global Talent Flows.” Journal of Economic Perspectives, 30 (4): 83-106. Coming up with an immigration policy to adequately account for a multitude of competing interests is also a remarkably complex endeavour. As such, countries have increasingly adopted hybrid systems to tap onto each system’s advantages and manage the labour market in terms of both demand and supply. Singapore is no different by way of COMPASS. Being smaller in size, Singapore has the added benefit of being nimble enough to frequently calibrate COMPASS criteria in line with shifting public preferences and national interests.

Transparent, But How Certain?

Perhaps the most important advantage of COMPASS is that it brings much needed clarity to the existing EP application process, which to some employers’ and past EP applicants’ minds, has been lacking.¹⁴Justin Ong, “The Big Read: The COVID-19-induced foreigners’ exodus — will they return to Singapore and what if they don’t?”, CNA (31 January 2022) <https://www.channelnewsasia.com/singapore/covid-19-foreigners-exodus-what-will-happen-2468096> At present, EP applicants must meet the EP qualifying salary¹⁵As at the date of publishing this article, the qualifying salary for EP applicants is SGD 4,500 per month or SGD 5,000 per month for employers in the financial services sector. This will be increased from 1 September 2022 (see endnote 5 above). and additionally “have acceptable qualifications, usually a good university degree, professional qualifications or specialised skills“.¹⁶See <https://www.mom.gov.sg/passes-and-permits/employment-pass/eligibility> Currently, there is not a comprehensive list or formula of what constitutes as “acceptable qualification“, “a good university degree” or “specialised skills“. The unfortunate result is that EP applicants, who are not privy to MOM’s internal decision-making process, lack certainty vis-à-vis their EP application. This also leads to reduced predictability and certainty of manpower planning for employers. COMPASS addresses this head-on¹⁷See the following remarks by Minister for Manpower Dr Tan See Leng: “(COMPASS) is designed to be a transparent system, so that businesses have clarity and predictability for manpower planning” (Singapore Parliamentary Debates, Official Report (4 March 2022) vol 95) by spelling out in some level of detail the way in which points will be awarded based on prescribed degrees / qualifications and skills. When COMPASS is rolled out, MOM will also offer a Pre-Assessment Tool for employers to get an indicative COMPASS score for their prospective EP applicant before submitting an EP application.¹⁸See <https://www.mom.gov.sg/faq/compass/can-i-find-out-more-information-on-how-my-ep-application-will-fare-on-compass>

Such transparency also benefits the wider public. By publicising the list (and weight) of attributes that prospective foreign talents should possess, the public can be assured of a baseline quality of EP holders in terms of salary, qualifications and skills (vide C1, C2 and C5 respectively). The public can also better appreciate the measures in place to incentivise employers to hire and maintain a strong Singaporean core (vide C3) and to develop a diverse foreign workforce in terms of nationality (vide C4). These attributes / aspirations are uncontroversial and resonate with the theme of complementarity. With a clearer framework in place, the public will also be in a better position to provide specific input for the continued adjustment of COMPASS criteria.

However, assuming that an EP applicant meets the qualifying salary and attains the requisite 40 points under COMPASS, he/she might not be guaranteed an EP.¹⁹MOM expressly states that the Self-Assessment Tool currently available on its website does not guarantee the outcome of the EP application; see <https://www.mom.gov.sg/eservices/services/employment-s-pass-self-assessment-tool> Whether a qualifying EP applicant will eventually be granted an EP is presumably subject to MOM’s overarching discretion.²⁰Section 7(2)(a)(ii) of the Employment of Foreign Manpower Act 1990 provides the Controller with the power to issue a work pass if, amongst other things, the Controller is satisfied that the foreign employee is not a “prohibited immigrant” under Section 8 of the Immigration Act 1959. In particular, the Minister for Manpower clarified that COMPASS is “an additional stage in the entire EP application process and will in no way loosen our current EP framework“.²¹Singapore Parliamentary Debates, Official Report (7 March 2022) vol 95 (Dr Tan See Leng, Minister for Manpower) Accordingly, EP applicants who fare well under COMPASS but are nevertheless denied EPs will then have to decipher what extra-COMPASS metrics are used in determining EP applications.

Holistic?

Under COMPASS, each criterion is tradeable and none is a veto factor; what a candidate lacks in one criterion can be compensated through others. Like any other points-based immigration system, COMPASS can only assess quantifiable / prescribed qualifications and skills. Under C2, only formal qualifications awarded by accredited institutions / universities are recognised. At first glance, such criterion is rational and aligns with the aim of awarding EPs to foreign talents with an acceptable level of formal education / qualification.

However, other non-quantifiable traits (e.g., soft skills, interpersonal skills, specific talents) are not considered at all. These are traits that can be highly regarded by employers and specifically sieved out during their own screening process. For example, a high-performing salesperson endowed with outstanding communication skills is potentially disadvantaged merely because of his/her lack of formal qualification.

On a related note, C2 does not formally recognise prior work experience or talents in a specific field.²²For example, under the Skilled Independent visa in Australia, applicants can score points for prior skilled employment. This is amidst a gradual shift in employer focus away from formal qualifications / degrees and toward practical work experience, especially for highly specialised roles that do not necessitate formal training. Consider the hordes of talented sportspersons, chefs, artists etc. in occupations where formal qualifications are not necessarily needed, who are consequently at risk of being overlooked. It is for such reasons that points-based systems are often criticised to be under-inclusive. That said, such concerns might be premature at this stage given that formal accreditations are still entrenched in the hiring ethos of many employers.

Finding the Right Ratio

MOM has long maintained that EP holders are not subject to a quota, both within the company²³See following remarks by then Minister for Manpower, Josephine Teo: “While we do not subject firms to quotas on the number of EPs they may hire, we require them to consider all applicants fairly. Under the Fair Consideration Framework (FCF), we scrutinise the EP applications of firms suspected to have discriminatory hiring practices, including firms with very high single-nationality concentrations. Those found to have such practices will have their work pass privileges curtailed. Like S Pass holders, EP holders are subject to minimum qualifying salaries, which were updated in 2017.” (Singapore Parliamentary Debates, Official Report (5 August 2019) vol 94) and the general workforce.²⁴See the following remarks by Minister for Manpower Dr Tan See Leng: “(w)e have not, in our considerations, decided on setting a quota or number for the EP framework because EP holders are meant to be the top-tier in terms of all our work pass holders… The long answer to his question is that we do not have an aspirational target in terms of a fixed number of EP holders” (Singapore Parliamentary Debates, Official Report (7 March 2022) vol 95). Inevitably however, conversations regarding foreign manpower are often fixated on ratios, more specifically, on achieving a “healthy” local-foreign hire ratio that would avert any suspicion that the employer is engaging in unfair employment practices. On this note, C3 and C4 work hand in hand to incentivise employers to develop and maintain a “strong Singaporean core” while hiring people from a diverse mix of nationalities.

C3 awards points that are inversely proportionate to the share of the EP applicant’s nationality, as a means of risk diversification. Learning from the COVID-19 related impediments on global talent flow,²⁵See the following remarks by Minister for Manpower Dr Tan See Leng: “The nationality diversity consideration was also the result of making sure that we diversify our risk in terms of our dependency on the source of talent itself. To a certain extent, it is also guided by the current pandemic that is still ongoing. When certain restrictions came about, we were not able to let this group of EP holders travel freely back to their home countries to visit their relatives and come back.” (Singapore Parliamentary Debates, Official Report (7 March 2022) vol 95) Singapore has a legitimate strategic interest in ensuring that it does not depend too heavily on any one country as a source for manpower. Beyond this, much can also be said about attracting a diverse talent pool from across the globe to contribute to Singapore’s vibrancy and “global city” hub status.²⁶See the MOM website, which states that a “diverse mix of nationalities enriches firms with new ideas and networks, and contributes to a more inclusive and resilient workforce” <https://www.mom.gov.sg/passes-and-permits/employment-pass/upcoming-changes-to-employment-pass-eligibility/complementarity-assessment-framework-compass> It is also easy to see how the forming of enclaves of a specific nationality within some firms could stir unease.

However, the reality is that some countries produce a disproportionate amount of experts in some fields and EP applicants from such countries might be artificially disadvantaged as such. Persons originating from the same nation are not necessarily similar or less diverse, while persons originating from different nations can be remarkably like-minded (for example, if they come from the same educational background).

C4 essentially enshrines the FCF into COMPASS and applies these FCF considerations upstream at the point of EP application. While calls on employers to maintain “a strong Singaporean core” pervade current employment-related advisories and guidelines,²⁷For example, see the Tripartite Guidelines on Fair Employment Practices <https://www.tal.sg/tafep/-/media/tal/tafep/getting-started/files/tripartite-guidelines.ashx> C4 is perhaps its clearest manifestation. Notably, once COMPASS is fully rolled out, the FCF Watchlist (which consist of employers who do not abide by the FCF) will be “re-purposed” to focus on engaging businesses that score poorly on the firm-related attributes.²⁸Singapore Parliamentary Debates, Official Report (4 March 2022) vol 95 (Dr Tan See Leng, Minister for Manpower) What is ostensible here is the pivot from sticks (i.e., the FCF Watchlist) to carrots (i.e., award of points) for achieving a healthy local-foreign hire ratio. That said, MOM has clarified that the FCF job advertising requirement will continue to apply when COMPASS is rolled out and employers must practise fair consideration in their selection of candidates.²⁹Ibid.

Preventing Abuse

As a final remark, it goes without saying that MOM must be vigilant against dishonest employers / EP applicants who try to score underserved points within COMPASS. Such a need is in fact well understood by MOM.³⁰See the following remarks by Minister for Manpower Dr Tan See Leng: “(a)s far as the gaming itself is concerned, we will strengthen our enforcement process. We will have in place strong governance measures to guard against any dishonest attempts to game COMPASS.” (Singapore Parliamentary Debates, Official Report (7 March 2022) vol 95)

Now that the criteria used to assess EP applicants have become public knowledge, there is some concern that employers and/or EP applicants might “game” the system through creatively parking themselves in sectors / subsectors that would benefit them or exaggerating the EP applicant’s job role:

• Under C1, an EP applicant’s salary will be benchmarked against other PMETs in the same sector, which according to MOM, refers to broad industry groupings based on the Singapore Standard Industry Classification e.g., financial services sector. Employer sector will be determined based on their principal business activity as declared to the Accounting and Corporate Regulatory Authority (ACRA).³¹See <https://www.mom.gov.sg/faq/compass/what-is-my-firm-sector-and-subsector-under-compass>
• Under C4, employers will be assessed based on their respective share of local PMETs measured against peers in the same subsector. According to MOM, sectors that are more varied are split into more granular subsectors for the purpose of benchmarking of local PMET share.³²Ibid.
• Under C5, bonus points can be earned if the EP applicant is being hired for a role found on the Shortage Occupation List. This is squarely consistent with the notion of complementarity³³MOM clarified that such occupations will be decided based on (i) their relevance to Singapore’s economic priorities, (ii) the degree and nature of labour shortage and (iii) the sector’s progress in developing the local pipeline in the medium term to address these shortages. See < https://www.mom.gov.sg/faq/compass/how-will-the-shortage-occupation-list-for-ep-applications-on-compass-be-identified> – that foreign talents are brought in where there is demand for specific expertise that the domestic labour supply cannot fill.³⁴Some other points-based systems (e.g., Australia and the United Kingdom) already have a similar Shortage Occupation List in place. 

Sufficient verification processes must therefore be in place to ensure that information provided by employers to the relevant governmental agencies are accurate / truthful and employers cannot creatively park themselves in sectors with relatively lower earning PMETs (such information can be accessed online³⁵MOM regularly publishes labour market statistics, including resident income statistics, which provide an overview of income trends (see <https://stats.mom.gov.sg/Pages/homepage.aspx>)) or in subsectors that have a uniquely lower share of local PMETs. That said, MOM has clarified that more information on each firm’s sector and subsector classification will be available before September 2023 when COMPASS takes effect.³⁶See <https://www.mom.gov.sg/faq/compass/what-is-my-firm-sector-and-subsector-under-compass>

In assessing C5, MOM will definitely be wary of any attempt to inflate the EP applicant’s job title. For instance, MOM has clarified that they will conduct additional verification checks that EP applicants under the Shortage Occupation List track have the specialised skills required to perform the shortage occupation – for example, by requesting for relevant qualifications, certificates and accreditations.³⁷See <https://www.mom.gov.sg/faq/compass/what-other-conditions-must-my-candidate-meet-to-earn-sol-bonus-points-on-compass-for-ep-applications> For applicants who would not have passed COMPASS if not for scoring points under C4, they will be issued an occupation-restricted EP and must notify MOM if they are redeployed to a different role (to have their EP application re-assessed).

Conclusion

In order for COMPASS to be effective, large scale and persistent data collection must be carried out to continually and minutely adjust the relevant COMPASS criteria in line with shifting societal attitudes and labour market conditions. As previously explained, every country devises its own set of attributes that it values in prospective immigrants, with varying weights assigned to each attribute. This exercise cannot be reduced to a precise science, and frequent consultation with relevant stakeholders and the general public should be carried out to ensure the continued relevance of COMPASS. It is therefore heartening to hear that MOM is committed to consistently seek input from the ground to refine its policies.³⁸See the following remarks by the Minister for Manpower Dr Tan See Leng: “we think deeply and consult widely, because we know that whatever we implement will have a significant impact on businesses, on locals, on Singapore” (Singapore Parliamentary Debates, Official Report (4 March 2022) vol 95).

It is trite that Singapore’s economic success has historically been predicated on its openness toward foreign businesses and talents. Singapore must remain committed to retain its attractiveness as a hub for foreign talent,³⁹See the following remarks by the Minister for Manpower Dr Tan See Leng: “Singapore is an immigrant nation and openness is one of our society’s core strengths that has defined who we are… Singapore is and Singapore will always be committed to remaining open to foreigners who complement our local workforce, and who are able to add vibrancy to Singapore’s economy” (Singapore Parliamentary Debates, Official Report (4 March 2022) vol 95) while ensuring that concerns within the local populace are addressed in a principled and transparent manner. COMPASS is therefore a welcome tool in achieving such balance.