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Increase in Qualifying Salary for Employment Pass: Navigating the Impact on Hiring and Business

Significant changes to the Singapore foreign work pass system were announced in Mar 2024. Key to these is the increase in the Employment Pass (EP) qualifying monthly salary for new applications from Jan 1, 2025, and for renewals from the year after.

As a critical component of Singapore’s workforce framework, this adjustment is a clear signal that the Singapore government wants to focus on high-calibre individuals with demonstrated skills and competencies who can contribute purposefully to the Singapore workforce. 

At a time where talent is scarce worldwide, this is a strategic move that ensures Singapore remains a hub of top talents. However, this brings with it profound impact on businesses and professionals alike, with implications on hiring and talent acquisition strategies.

Impact on Hiring

The higher EP qualifying salary would without doubt impact on hiring, and businesses will need to relook their talent acquisition strategies. For a start, businesses would have to prioritise Singaporean citizens and permanent residents in their hiring, and look to foreign professionals who possess the specialised skills and experience that locals lack.

When recruiting foreign talents, employers will naturally give preference to individuals who can bring tangible contributions and add strategic value to their organizations, underscoring the importance of skills, expertise, and value proposition in hiring decisions. 

While this may pose challenges for some foreign professionals seeking employment in Singapore, it also signals opportunities for individuals with specialised skills and high-demand expertise. Foreign talent will need to demonstrate their unique value proposition to remain competitive in the evolving job market.

Impact on Businesses

The latest salary requirements would undoubtedly raise the heat on business costs in Singapore. For years, MNCs and SMEs alike have voiced concerns of the high cost of doing business here and many have felt the need to relocate overseas to stay profitable. The higher EP qualifying salary would certainly prompt businesses to consider their viability and long term sustainability. 

Small and medium enterprises (SMEs), in particular, may face challenges in meeting the elevated salary requirements: the higher cost could eat into their margins and could impact on their profitability especially if they are operating within tight budget constraints. 

In addition, local SMEs may feel pressured to compete with MNCs which tend to have the financial ability to offer higher EP salaries and attract better-quality talent. SMEs might in turn feel that they are out of the playing field, particularly those which require specialised skills that are typically sourced globally, such as in industries like financial services, information communication technology and technology-related services that need foreign expertise.

Navigating the Changes

Despite the challenges, the higher EP qualifying salary is a push for businesses to look more deeply into their operations and hiring strategies. For one, employers could designate positions that may be filled by contract talents and remote talents who do not need to relocate to Singapore.  

Secondly, companies could consider job redesign to restructure processes and responsibilities such that some tasks could be automated or filled with alternative staffing solutions. A third possibility is that businesses could look into building offshore teams in countries with lower labour costs to take care of back-end processes. 

At the same time, the change in qualifying salary presents opportunities for employers to engage in proactive talent planning to align their hiring needs. This would involve assessing current talent gaps, identifying critical skill sets, and developing targeted recruitment strategies.

Where skills are lacking, companies can explore innovative approaches such as upskilling existing employees or leveraging on SkillsFuture programmes to enhance the capabilities of their workforce and meet evolving talent demands. Employers can also consider hiring incentives to tap into the local talent pool.

Therefore as Singapore moves towards the higher Employment Pass Qualifying Salary in 2025, now is the time for companies to look into talent strategies that can drive organisational growth in the long term. By embracing proactive talent strategies and adapting to the evolving global labour pool, businesses can thrive and even be propelled higher in the value chain.




Drive Business Growth with Proactive Talent Strategies

ACHIEVE Group  can help businesses gain a competitive edge with proactive talent strategies. 

A talent acquisition consultancy in the Asia Pacific for over 30 years, ACHIEVE Group is a Human Capital Partner (HCP) and Singapore Prestige Brand Award (SPBA) winner, recognised for commitment to progressive employment practices and business transformation. 

For any queries on staffing arrangements or happenings in the job market, please reach out to us at or 63230050.