As a former HR director, here are my observations which explain why wages for Singaporeans have seen limited growth since the introduction of foreign labour.
The above shows a typical distribution of labour profile and the typical increment/adjustment done every year.
Employees doing similar jobs are typically placed in the same pay scale. They are then sorted according to which quartile their current wages stand. An employee that falls in the first quartile is receiving lower wages and correspondingly given higher % increment/adjustment to catch up and balance the pay scale spread.
Employees at Q4 are at the top of the pay scale and are correspondingly given lower % pay increment/adjustment to prevent the spread from becoming wider.
Typically decision makers and managers already sit in Q4 and therefore will see little difference if the company hires excessive foreign labour.
So who are affected?
1. Junior Singaporean Degree Holders
These group are now in Q1 and will correspondingly receive lower increment/adjustment
2. Experienced Diploma Holder
3. Mid-level Diploma Holder
4. Junior Diploma Holder
Because of foreign workers who are willing to accept less pay, the above group are now in Q3 which means lower increment/adjustment.
Little difference?
It may seem like a difference of a few dollars, but remember that this is year-on-year percentage wage growth, so in the long term your projected earnings will be a lot less (in simpler terms – a 2% difference compounded over 20 years is 1.02^20 - 48.5%)
Typical performance matrix