Hire in Singapore

Challenges of Hiring in Singapore

Here are the three most important hiring challenges that companies usually face: 

Lack of qualified employees

Hiring in Singapore is also challenging because most workers are not interested in switching jobs. Therefore, you must often raise salaries and offer competitive benefits to attract and retain talent. 

Meanwhile, there is a lack of qualified Singaporean talent, especially in tech, with high talent competition. 

Moreover, small businesses struggle to compete with larger companies for talent, as it takes 41 days to complete the hiring process in Singapore, and 19% of new hires leave within six months. 

You must invest in effective global hiring strategies to minimize employee attrition rates and control the rising hiring costs. 

Facing complexities with Singaporean labor law

Singapore's employment laws, while protecting workers, create complex hurdles to hire employees in Singapore:

• Complying with extensive regulations can be challenging for in-house HR teams, especially in smaller companies. You must manage minimum wage, working hours, employment contracts, contract of service, notice periods, rest days, type of work, overtime pay, and termination procedures.
• Understanding that employees are entitled to various leaves and public holidays.

• Meeting Employment Pass (EP) system quotas and proving a local talent search adds time before hiring foreign workers in Singapore. 
• New work models, such as remote work and subsequently hiring contractors in Singapore, require clear legal interpretations within the existing framework. 

Thankfully, you can outsource HR operations in Singapore and remain compliant.  

Taxes and contributions

Singaporean hiring managers are grappling with rising hiring costs and talent retention difficulties amid statutory payroll compliance: 

• Employers are required to withhold income tax, additional contributions plans, and other deductions based on specific regulations.
• The mandatory contribution rates of the Central Provident Fund (CPF) can vary based on employee age and salary. 

• Maintaining accurate employee data is essential for payroll processing. Errors can lead to delays and complications.

• Hiring remote workers in Singapore might need to manage payroll in different currencies and time zones, adding complexity.

Inaccurate or delayed payroll can frustrate employees and damage your reputation as an employer. Outsourcing payroll services can help manage these challenges and streamline the hiring process.

How to Hire in Singapore

The right answer for how to hire employees in Singapore depends on whether you plan to hire in Singapore for a long time, short-term projects, or project-based work and your dependence on foreign talent.

Best ways to hire

Here are some of the best ways you can follow to hire in the country: 

Setting up a local entity

Establishing your subsidiary is one of the ways to hire in Singapore:

Pros:

• Most control over the hiring process and company culture.
• It is easier to build a strong employer brand and attract top talent.
• More flexibility in offering employee benefits and compensation packages.

Cons:

• Requires registration, compliance with local regulations, and establishing a physical presence.
• Higher initial set-up costs compared to other options.
• More administrative burden for payroll, taxes, and employee benefits.

Best for:

• Companies with a long-term commitment to the Singapore market.
• Companies require high control over the hiring process and company culture.
• Larger companies with significant hiring needs.

Hiring employees via EOR

Pros:

• Faster and easier than setting up your entity.
• The EOR solutions like Skuad handles payroll, taxes, and compliance, reducing administrative burdens for you.
• Provides a good option for geographically dispersed teams.

Best for:

• Companies looking to hire quickly and avoid the complexities of setting up a local entity.
• Companies with short-term projects or geographically dispersed teams.
• Smaller companies looking for full time employees with limited resources.

Hiring contractors through AOR

Pros:

• AOR solutions like Skuad provide flexibility and avoid employee benefits obligations while you hire international contractors.
• A good option for acquiring specific skills for short-term projects.

Best for:

• Hiring for specific projects or short-term needs.
• Supplementing your existing team with specialized skills.

Cost of Hiring in Singapore

Hiring in Singapore involves various costs, and your desired hiring method significantly impacts the overall expense. Here's a breakdown of the costs involved: 

• Recruitment: Job board postings, recruitment agency fees, interview travel and accommodation
• Employer CPF contributions: 17% of the employee's salary (mandatory contribution to Singapore's pension scheme)
• Compliance costs: Legal and accounting fees for ensuring adherence to labor laws (variable), payroll and employee benefits administration
• Hiring foreign workers: Factor in Employment Pass (EP) application expenses (depending on type and complexity)
• Office set-up costs: Rent, furniture, equipment (if setting up a local entity)

The table compares the cost of setting up a local entity vs. EOR/AOR. Furthermore, you can use our hiring cost calculator to get an even better picture. 

A Brief About Employment Laws in Singapore

Here's a comprehensive list of employment laws that will help you hire in Singapore:

• Employment act: You can take reference for finalizing working conditions and benefits like working hours, overtime pay, leave entitlements, termination procedures, etc. 
• Central Provident Fund (CPF) Act: Requires mandatory contributions from employers and employees towards a pension scheme (CPF).
• Workplace Safety and Health Act: You must enact workplace laws to ensure workplace safety and health standards.
• Retirement Age Act: You cannot force retirement on employees under 63 years.
• Women's Charter: Protects women's rights in the workplace, including maternity leave and anti-discrimination provisions.
• Discrimination laws: You must enact hiring policies and workplace laws prohibiting discrimination based on race, religion, gender, age, disability, marital status, and pregnancy.

Employment of foreign manpower act: Regulates the employment of foreign workers in Singapore through the Employment Pass system.

Hire in Singapore with Skuad

Skuad's powerful Employer of Record/Agent of Record platform empowers organizations to build globally distributed teams without establishing a local entity. 

We handle onboarding, payroll, taxes, and compliance, allowing you to focus on what matters most—hiring in Singapore and working toward business growth.

Don't let employment regulations hinder your expansion plans. Sign up for a free demo today and unlock the full potential of a global workforce!

FAQs

Q1. How much does it cost to hire an employee in Singapore?

A1. The cost varies depending on how you hire employees in Singapore. Setting up a local entity involves registration fees and ongoing compliance costs while outsourcing to an Employer of Record (EOR) or Agent of Record (AOR) only includes service fees. You may expect additional costs for recruitment and work permits for foreign workers. 

Q2. How to hire an employee in Singapore?

A2. You can hire in Singapore after establishing a subsidiary and assuming full control of employees’ payroll and benefits administration. Alternatively, you can use an Employer of Record (EOR)/Agent of Record (AOR) for faster hiring and reduced administrative burden. 

Q3. What is the average time to hire in Singapore?

A3. The hiring process in Singapore takes an average of 41 days. Factors like the chosen hiring method, role complexity, and talent pool availability can all influence the actual hiring timeframe.

Q4. Can a foreign company hire employees in Singapore?

A4. Yes, a foreign company can hire in Singapore; however, there might be quotas for the number of foreign workers a company can hire over locals.