When expanding your business, you aim to hire the best talent for each new role in a manageable and sustainable way, considering your infrastructure, budget, and experience. With remote work now embraced globally for its numerous benefits and proven efficacy, extending business operations internationally is not only feasible but also an attractive option for many.
For businesses eyeing the Asia-Pacific market, Singapore emerges as a popular choice. Comparable in size and population to New York City, this island nation offers emerging companies a plethora of advantages, from relatively lower employer taxes to a growing, diverse, and highly skilled workforce.
However, recruiting in Singapore presents its challenges, especially if your organization lacks the capacity to navigate the myriad complexities of international hiring, including country-specific documentation, onboarding, compliance, payroll, and benefits. For many companies, partnering with a Singapore Employer of Record (EOR) becomes a natural choice, particularly if this marks your first foray into overseas hiring or you’re new to recruiting in Singapore. Let’s delve into what you need to know about using EOR services in Singapore.
What Is an Employer of Record?
In international hiring, remember that employment laws, worker rights, and compliance regulations can vary by country, region, and even municipality. These nuances often exceed the capabilities of most companies.
This is where the EOR comes in. An EOR is an entity within a country or region that can legally employ workers on behalf of another company. The latter can access a talent pool by paying the EOR to manage their employment.
Benefits of Using an Employer of Record
To hire international employees without an EOR or similar service, a business must first establish a legal entity in the target country/region, open a local bank account, set up local payroll and benefits, and establish a legal team—especially important and complex for ensuring compliance with all local employment laws, including those related to benefits, wages, taxes, and intellectual property. Starting from scratch, establishing a new entity could take months or even years and represents a significant financial investment.
Using an EOR means bypassing this complex process. The EOR acts as the legal employer and handles all the aforementioned details. This accelerates the hiring process, ensures compliance with local laws, and simplifies payroll and benefits administration.
Considerations for Hiring in Singapore
Before hiring remote talent from Singapore, it’s crucial to familiarize yourself with the employment landscape to know what to expect. This can make your positions attractive to top talent and ensure you find suitable candidates to join your team. Here are some things you need to know before starting recruitment in Singapore.
Demographics
Singapore is among the world’s most racially diverse countries, with a highly educated and technically proficient workforce. It recognizes four official national languages: Mandarin, English, Malay, and Tamil. This means that the majority of the population is multilingual, offering your company greater flexibility in how you conduct business and with whom you communicate during expansion. The island’s population is estimated at about 6.5 million.
Payment Requirements and Expectations
The national currency in Singapore is the Singapore Dollar, or SGD. Unlike some countries, Singapore does not have a statutory minimum wage. Instead, wages are typically determined through negotiations between employers and employees or specific industry agreements.
The standard workweek in Singapore is from Monday to Friday. Employees should not be obliged to work: (a) more than 6 consecutive hours without a break; (b) more than 8 hours a day, or more than 44 hours any week. Employers must pay wages monthly, and although not mandated by law, many employers provide a 13th and 14th-month payment. These are one-off payments representing a month’s wage, paid on top of the year’s salary, usually at the end of the year. Regular bonuses are not mandatory but are often expected in competitive job opportunities.
For an idea of the cost of employing someone there, check out our free Singapore Employment Cost Calculator for a detailed breakdown of employment costs.
Holidays
Employees in Singapore generally enjoy 11 national holidays per year, with many employers also offering additional company holidays or floating holidays.
Employees in Singapore are entitled to at least 7 days of leave after serving the employer for 12 months. This entitlement increases by one day for every additional year of continuous service, up to a maximum of 14 days after 8 years. Despite this legal requirement, many employers opt to provide up to 14 days of leave from the date of employment.
Regarding eligibility and accrued leave, employees start to be eligible for partial annual leave after 3 months of employment. Their leave is prorated until they reach the full entitlement upon completing 12 months of service.
As for sick leave, employees are entitled to paid sick leave only after three months of work. At that point, they are entitled to 5 days of outpatient care or 15 days of hospitalization. This number increases monthly until they have completed six months of service, at which time they are entitled to 14 days of outpatient care and 60 days of hospitalization.
Female employees who are mothers with Singaporean citizenship children can opt for 16 weeks of Government-Paid Maternity Leave (GPML). However, for foreign residents, the entitlement is 12 weeks of maternity leave.
