In a significant overhaul of its labour policies, Singapore will remove the hard cap on the maximum duration that work permit holders can work in the city-state from 1 July 2025. This change, announced by Minister for Manpower Tan See Leng on 6 March, marks one of the most far-reaching reforms to foreign worker regulations in recent years. Industry leaders have hailed the move as a solution to persistent manpower shortages, particularly in manufacturing and services, while raising questions about long-term workforce planning and integration challenges.

Under the current system, work permit holders—excluding migrant domestic workers, who operate under a separate framework—can work in Singapore for a maximum of 14 to 26 years, depending on their skill level and country of origin. The new policy will allow these workers to remain employed until the prevailing retirement age of 63, offering greater job security and the potential for extended careers in the city-state.

A Lifeline for Workers and Employers

For individuals like Mr Sethu Rajinikanth, a 48-year-old facility executive at Singapore shipbuilder Strategic Marine, the policy change is a game-changer. Having worked in Singapore for 17 years, Mr Rajinikanth faced a looming deadline under the existing 26-year cap, which would have forced him to leave in just nine years. Now, he can continue working for an additional five years, providing him with greater stability. “I feel greater job security with the pressure of the employment limit lifted,” he told The Straits Times. “Otherwise, I might have to go home or find work in another country.”

Mr Rajinikanth, an Indian national, also expressed enthusiasm about mentoring younger workers, a sentiment echoed by employers who see the retention of experienced staff as a key benefit. Mr Ivan Koh, chief corporate finance officer at Strategic Marine, noted that the change would help maintain a higher level of skilled personnel, enhancing operational stability. “The benefits of preserving institutional knowledge and enhancing workforce continuity far outweigh challenges like managing higher healthcare costs,” he said.

Strategic Marine currently employs 238 work permit holders, with 12 aged 50 and above. Many of these workers, with tenures of up to 26 years, bring invaluable expertise to the company. By reducing the need for frequent recruitment and training of new hires, the policy is expected to streamline workforce planning in industries reliant on skilled foreign labour.

Addressing Manpower Shortages in Key Sectors

The removal of the duration cap is particularly significant for industries such as manufacturing and the process sector, which encompasses petroleum, petrochemicals, and pharmaceutical production. These sectors often struggle to fill roles requiring deep technical expertise—such as welders, equipment fitters, and field supervisors—with local talent. “These jobs require years of hands-on experience, yet remain hard to fill due to their specialised nature,” said Mr Wayne Yap, executive director of the Association of Process Industry.

While the policy offers much-needed flexibility, Mr Yap cautioned that manpower constraints persist, exacerbated by recent tightenings of foreign worker quotas and levy requirements in 2024. Firms must adapt to ensure sustainable workforce planning, balancing the influx of foreign talent with investments in automation and local skills development.

Mr Lennon Tan, president of the Singapore Manufacturing Federation (SMF), described the move as a critical step in addressing chronic shortages while enabling continued investment in advanced manufacturing technologies. “This ensures that Singaporeans continue to take on higher-value roles while foreign workers help sustain essential operations,” he said. The inclusion of additional manufacturing operator roles on the Non-Traditional Sources Occupation List from 1 September 2025 is also seen as a long overdue response to industry demands, particularly in precision engineering, electronics, aerospace, and medical technology.

Expanding the Talent Pool

Beyond extending tenure limits, the government has broadened the scope of locations from which employers can hire work permit holders. Traditionally, workers could be sourced only from China, Malaysia, Hong Kong, Macau, South Korea, and Taiwan. However, under the expanded Non-Traditional Sources Occupation List, introduced in September 2023 and further widened from 1 June 2025, employers in services and manufacturing can now recruit from Bangladesh, India, Myanmar, the Philippines, Sri Lanka, Thailand, Bhutan, Cambodia, and Laos.

The addition of Bhutan as a source country has drawn particular attention. Mr Joni Herison, director of Gems Partners Network, a recruitment agency specialising in Bhutanese workers, highlighted their appeal for roles requiring higher English proficiency, such as front-line service positions. “English has been the language of instruction in Bhutan’s schools since 1964, ensuring most young people are fluent,” he explained. Employers in aviation services and hospitality have already expressed interest in hiring Bhutanese workers on work permits, seeking to address challenges of availability and cost associated with traditional source countries.

However, industry leaders stress the importance of careful integration. Ms Cindy Lee, senior vice-president and Singapore country head at human resources firm Adecco, warned that while the expanded talent pool is welcome, employers must provide support for workers adapting to local conditions and cultural differences. “Ensuring workers meet industry standards is crucial, particularly in sectors like semiconductor manufacturing,” she said.

Balancing Flexibility with Long-Term Goals

The labour policy overhaul includes other supportive measures, such as extending the Manpower for Strategic Economic Priorities (M-SEP) scheme’s support period from two to three years starting 1 May 2025. Launched in 2022, M-SEP allows firms advancing Singapore’s key economic priorities to temporarily exceed S Pass and work permit quotas. Mr Tan of the SMF noted that companies in high-tech manufacturing and automation have already benefited, ensuring critical projects proceed without workforce constraints.

Yet, challenges remain. A three-step increase in S Pass qualifying salaries and levies, with the final hike set for 1 September 2025 for new applications, has been moderated to ease cost concerns for businesses. Despite this, Ms Lee cautioned that employers in industries with tight margins, such as services, may struggle to meet the new requirements. “Employers may adjust by re-evaluating workforce composition, upskilling workers, and relying more on local talent,” she suggested.

A Double-Edged Sword?

While the reforms have been broadly welcomed, they raise broader questions about Singapore’s long-term labour strategy. On one hand, the changes address immediate manpower needs and provide stability for both workers and employers. On the other, they underscore the city-state’s reliance on foreign labour in key sectors, a dependency that could pose challenges if global labour markets shift or geopolitical tensions affect worker inflows. If unaddressed, these risks may strain Singapore’s ambition to remain a global hub for advanced manufacturing and innovation.

Moreover, the policy shifts must be accompanied by robust efforts to upskill local talent and create higher-value job opportunities for Singaporeans. Initiatives like SkillsFuture, which aim to develop local expertise, are critical to maintaining a balanced workforce. As Mr Tan of the SMF noted, “While these measures provide temporary relief, long-term workforce resilience depends on continuous investments in skills development.”

There are also practical concerns. Employers like Mr Koh of Strategic Marine anticipate higher healthcare costs and the need to adapt work processes for an ageing foreign workforce. While the benefits of retaining experienced staff are clear, firms must navigate these challenges without compromising productivity or safety standards.

A Step Towards Inclusivity

For workers like Mr Rajinikanth, the policy change is more than a bureaucratic adjustment—it’s a chance to build a future in a country that has become a second home. His story reflects the human impact of Singapore’s evolving labour landscape, where policies must balance economic imperatives with individual aspirations. As he looks forward to mentoring the next generation of workers, his experience underscores a broader shift towards inclusivity in the city-state’s workforce.

Singapore’s latest reforms signal a pragmatic approach to labour challenges, offering flexibility to industries while encouraging productivity improvements. Yet, as the city-state navigates this transition, the success of these policies will hinge on how well they integrate foreign talent, empower local workers, and anticipate future economic needs. For now, the removal of the work permit duration cap stands as a bold step in redefining Singapore’s labour market—one that could set a precedent for other economies grappling with similar demographic and industrial pressures.