The Singapore government is reviewing foreign manpower policies affecting hawkers and small food and beverage (F&B) operators, but cautioned that relaxing quotas too far could create unintended consequences.
Senior Minister of State for Manpower Koh Poh Koon made the remarks in Parliament on Monday (2 Mar), responding to a question from East Coast GRC Member of Parliament (MP) Jessica Tan on whether more graduated foreign manpower arrangements could help smaller operators cope with staffing shortages.
In his speech, Dr Koh acknowledged that small F&B operators — including hawkers — are facing mounting manpower pressures due to Singapore’s ageing population and evolving “local career aspirations”.
Source: MDDI Singapore on YouTube
Currently, only Singapore citizens and permanent residents are allowed to be stallholders at hawker centres under the Ministry of Sustainability and the Environment (MSE).
However, stallholders may hire eligible Long-Term Visit Pass or Long-Term Visit Pass Plus holders who are already residing in Singapore.
Micro-enterprises with just one local employee are also allowed to hire one Work Permit holder to help meet manpower needs.
While some have suggested loosening levies and quotas for smaller businesses, Dr Koh warned that doing so could create “perverse incentives”.
He explained that differentiating levies and quotas too heavily could encourage larger operators to split into smaller entities to qualify for more favourable rules.
“This could result in a large increase in the number of foreign workers, which would not be sustainable given our limited infrastructure and social carrying capacities,” he said.
He stressed that manpower policy must be considered within the broader context of Singapore’s demographic constraints and long-term sustainability.
Dr Koh also referenced an opinion piece in The Straits Times highlighting structural challenges in the F&B sector.
“One of the key things is that productivity gains have lagged behind activity growth,” he noted.
Rather than relying on higher headcounts, he suggested that business viability should be assessed through productivity improvements.
He added that Singaporeans have strong expectations regarding the authenticity of traditional dishes.
In some food courts, ethnic dishes are prepared by foreign workers rather than members of the originating community, raising questions about how to balance efficiency with authenticity.
“If it makes sense for us to give them more headcounts just to produce the food at a certain productivity and efficiency, that is something we are prepared to consider,” he stated, adding that such trade-offs should be discussed openly.
To help reduce reliance on manpower growth, the Government has rolled out several support initiatives.
These include the Food X programme, which enables outsourcing of labour-intensive preparation to central kitchens, and the F&B Optimisation Programme, which supports technology adoption and process redesign.
Dr Koh said smaller operators may need to rethink their business models and tap available schemes to remain viable.
“We will continue to review the foreign manpower policies for hawker and small F&B companies together with relevant agencies,” he added.
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Featured image adapted from MDDI Singapore on YouTube and MS News.