Businesses in the business hub of Asia are suffering because of inability to secure the desired talent for employment. This is the current scenario prevailing in Singapore which is the result of S-pass and employment pass restrictions for foreign employees working in Singapore. The local government after the COVID-19 established this as a resolution to lay restrictions for employers to hire the local talent preferably and then there is negligible ratio left for foreign employees which again is restricted.
It’s an undeniable fact that to secure skilled workforce like BFSI, IT or marketing specialists in Singapore is a wonder if it happens in reality. To address all this, employers have been hiring employees from foreign by sponsoring visas to support the flow. But COVID reshaped the whole globe and now hiring foreign workers in Singapore is a huge challenge.
EOR services which existed for long, but were always underestimated of their potential and benefits they could offer, but now they are in huge demand. When you are in Singapore supposed to run an organisation you need people who understand your goal and align accordingly, but where would you get such souls from, EOR is the answer. I have designed this guide to help you understand how you could effectively hire by using EOR services and grow your business as desired.
What Is EOR Hiring?
An EOR opiates as a legal employer for a company to talent hunt, recruit, onboard and manage the workforce while providing complete access to the company of total control of its operations and how they utilize their team. The main idea is to eradicate the complexities of HR services like payroll, taxes and other labour laws pertaining to the particular nation, their visas, work permits, local benefit administration, onboarding and termination, and employment contracts.
Also Read: The Future of Global EOR Services in Business Expansion
The EOR will be there as a local entity handling all the legalities and hiring proceedings while the company simply pays to the EOR service provider and uses the team as per their needs focusing on its operations. This becomes even more helpful when a company needs to hire in other countries as the EOR being a local entity will make it easier to expand without any complications of labour laws, establishing its own entity and being compliant with other statutory norms and regulations.
Benefits Of Using EOR
EOR is the future of how employers have been hiring, how is this addressing challenges which earlier seemed like that they cannot be bypassed is discussed below;
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Reduced Risk
- EORs ensure all complete compliance to local labour rules reducing the chances of getting into legal complexities.
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Speed and Flexibility
- Speed and flexibility comes with EOR, as companies will be focusing more on their operations and could rapidly hire employees overseas and scale up or down their reach as required.
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Cost-Effectiveness
- EORs handle everything ranging from onboarding to payroll, benefits, and compliance, minimizing the need for spending resources on HR management and accounts internally.
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More Focus on Core Business
- Administrative tasks will be managed by the EOR, the company can emphasize on their core strategies and operations enabling them to achieve desired revenue and enhance quality of their services or products within the industry.
Labor Laws Compliance In Singapore
Singapore, to better address the employment acts, has established various labor standards in place which aim to prevent abuses and create working conditions for Singapore’s workforce, transparent and equal. I have mentioned below some of the crucial ones;
- – To protect employees from any form of discrimination because of any race, religion, nationality, ideology, political affiliation, sex, financial, social, or physical condition
- – To ensure working hours shall never exceed nine hours daily or 44 hours per week.
- – To pay the employees a minimum adjustable and vital wages on time for their respective job roles.
- – To ensure employees and contractors are being compensated as required for any benefits due for the level of service they render to an organisation.
- – To maintain a safe and dignified working environment.
Payroll And Taxes In Singapore
Employee income and payroll taxes are currently capped at 22% and 20% respectively, although employees are responsible to file the same on their behalf and as per the current laws, there’s no tax withholding required. Employer payroll taxes range in between 7.5% – 20% and are managed under the Singapore’s Central Provident Fund.
How To Use EOR For Hiring In Singapore?
The process is simple, it’s just your research which would guide which option is better for you to go ahead, understand below the crucial factors I have mentioned;
Key points to remember when using an EOR in Singapore:
- Compliance
The foremost reason why you would use an EOR is that they manage all legal compliance and aspects of employment which include work permits, employment contracts, payroll taxes, and benefits. This all ensures you always adhere to Singapore’s labor laws. - No need for a local entity
Yes, the second most reason supporting the cause is that it doesn’t matter if you don’t have a legal entity in Singapore, an EOR would enable you to hire employees anywhere over the globe. - Work permits & Visas
EORs as mostly within expanding services scope are highly efficient to assist with work permit applications & Visas (if required) for foreign employees. -
Hiring Process:
- Understand needs: Identify and understand the hiring requirements to the EOR. Work on things like job descriptions, desired skills, and salary slabs.
- Contract Terms: The EOR service provider, as per the requirement of skills and the amount of workforce, will draft compliant employment abiding by the Singaporean law.
- Onboarding: The EOR will itself source talent and handle the onboarding process and everything ranging from paperwork, benefits enrollment, and orientation.
- Payroll and benefits: The EOR handles the attendance monitoring, setting leave entitlement as suggested by you and will disburse the salaries accordingly. EOR takes care of deducting necessary taxes, and manages employee benefits pertinent to the Singapore labor laws.
Important considerations when using an EOR:
- Cost:
EORs in Singapore usually charge a fee per employee, which mostly varies and depends on the services asked and the degree of professionals you need. - Communication:
From the very beginning, establish a clear communication with the EOR, it would help ensure smooth employee management and complete compliance. - Due diligence:
Start with hardcore research and go for a trustworthy EOR service provider possessing expertise in staying compliant to the Singapore employment law.
Recruitment Central As Your EOR Partner
Some of the recent developments in the labours laws by MoM has introduced regulations which clearly that EORs cannot directly apply for any work passes for the foreign workers on behalf of overseas companies, which implies;
Key points about the Singapore EOR ban
- – No visa sponsorship:
EORs would only be able to hire local employees and cannot sponsor work passes for foreign workers employed under the overseas companies. - – Local presence required:
Foreign companies who need to hire foreign talent in Singapore must establish a registered local entity to request for sponsoring work passes. - – Compliance with MOM regulations:
Any attempt out of the conditions mentioned above by an EOR for getting visas for foreign employees working for non-Singaporean companies, would clearly be considered a violation under law.
It’s important to understand your options while you select EOR services in Singapore, know their history, their registered entities in Singapore, a one single loose step can put your whole sum of hardwork building your organisation in danger.
Also Read: Global Employer of Record: Key Trends and Developments
Recruitment Central overcomes all this and has legal owned entities established in Singapore for two long decades. Recruitment central excels in all three essential pillars of successful EOR services which have earned them prestigious awards in all three categories i,e, Best EOR Firm, Best Recruitment Firm, Best Workforce Management Platform. The Hassle-free onboarding and compliance management and streamlined hiring to find the right talent along with the end-to-end payroll and workforce solutions has helped thousands of businesses in Singapore to bypass staffing challenges and expand their teams globally.
Conclusion
Research and talk to your subordinates or people within the same industry who are using EOR services in Singapore. For you to ensure that your hired EOR service provider is abiding by the law, you must know the local labour laws first. Hire a trustworthy EOR service provider and start growing your organisation with maximum reach over the globe.
