SG Budget 2019 (I): HR Outlook


SG Budget 2019 (I): HR Outlook

by Yi Ting
February 19, 2019

Supporting your HR Function: Workforce Enhancement Programmes & Government Grants

The Singapore Budget 2019 Speech took place on 19th February, Monday. During the speech, Singapore’s Finance Minister Mr. Heng Swee Kiat highlighted some improved initiatives to better support local workers in skills training with efforts to cope with the upcoming reduction in the foreign worker’s quota.

Reduction in Foreign Workers Dependency Ration Ceiling in the Services Sector

Finance Minister, Mr. Heng Swee Kiat highlighted that the reliance on more foreign workers will not be a long-term solution to support the country’s services sector. With S Pass growth in this sector the highest in five years, foreign manpower growth could be on “an unsustainable path. He stressed the importance of having a sustainable inflow of foreign workers to complement Singapore’s workforce. Thus, Singapore must enhance the complementarities of local and foreign workers. In addition, the reduction in foreign workers quota will also ensure Singaporeans to have “good jobs and opportunities”.

As such, the Dependency Ratio Ceiling (DRC) will be reduced for the services sector in two steps:

From 40% to 38 & on Jan 1, 2020

From 38 % to 35 % on Jan 1, 2021

For S pass sub-DRC (Services), there will be a reduction:

From 15% to 13% on Jan 1, 2020

From 13% to 10% on Jan 1, 2021

How Does These Impact HR Practitioners in Services Sector?

1.Review Recruitment Plans:

Consider hiring older Singaporean workers above 50 years old earning > $4000 through Special Employment Credit. Your company will receive SEC of up to 8% of the employee’s monthly wages per month.

2.Invest in Technology/Innovation to automate services:

E.g. F&B vendors may utilize on ordering machines to reduce the shortage of manpower. Consider applying for EDG & PSG grants to also reduce operational costs.

Workforce Enhancement Programmes

To ensure that workers remain competitive and relevant, the following programmes have been implemented or enhanced.

1.New Professional Conversion Programme

-This programme aims to support mid-career professionals to enter new growth areas, e.g. blockchain, embedded software development, and prefabrication.

2.Career Support Programme

-There will be a 2-year extension (until 2021) to provide wage support for companies that hire Singaporeans who are mature, retrenched, or in long term unemployment.

How Does These Impact HR Practitioners?

HR will have a larger pool of talent to recruit from and enjoy grants to cover labor costs.

Government Grants

To help firms adjust to upcoming foreign workforce policy changes, the following government grants have also been enhanced or extended.

1.Enterprise Development Grants (EDG)

The EDG aims to help companies who wish to upgrade, innovate, venture overseas or are ready to embark on any combination of these strategies. Projects under core capabilities such as Human Capital Development can help to support your business’s HR capabilities.


There will be a 3 years extension(until 2023) of enhanced support level of up to 70%to strengthen business capabilities, improve operational efficiencies and internationalize.

Find out how to apply for EDG here

2.Productivity Solutions Grant (PSG)

The PSG aims to provide small and medium-sized enterprises funding to adopt pre-scoped IT solutions and equipment to enhance productivity. This includes HR solutions to help businesses automate core HR processes.


– There will be a 3 years extension (until 2023) of enhanced support level of up to 70%.

– Expanded scope (Details to be announced later) to also support-out-of-pocket cost for training, capped at $10,000.

Find out how to apply for PSG here

Stay updated with us for more Budget 2019 HR movement details over the next few weeks. For now, you may find out more about how your business can improve your HR productivity with JustLogin’s PSG Package.

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