Companies will need to pay foreign professionals and mid-skilled workers higher salaries in order for them to qualify to work in Singapore.

The impending move to raise the salary thresholds for Employment Passes (EPs) and S Passes comes amid slacker labour market conditions owing to the Covid-19 crisis, said Manpower Minister Josephine Teo yesterday.

Observers and business groups said it will likely encourage employers to source for more Singaporean workers.

Mrs Teo did not give details but these are expected to be made public soon.

Currently, the fixed monthly salary threshold for EP holders is at least $3,900 and for S Pass holders, at least $2,400. The qualifying salaries are higher for older and more experienced workers.

The increase would be the second announced this year for EPs, and comes in the wake of rising retrenchments and recent concerns about competition between Singaporeans and foreigners in the job market.

"Even as we stay open to the world to accelerate our recovery, the crisis makes it all the more important that employers give fair treatment to Singaporeans," said Mrs Teo, setting out her ministry's priorities after the President's Address.

"We will ensure that employers uphold both the letter and spirit of the Fair Consideration Framework. We will closely examine retrenchment exercises to ensure they are carried out fairly."

She also said that Singapore's foreign workforce policies are regularly calibrated for companies to have the workers they need, while ensuring a strong Singaporean core.

Today, nearly six in 10 locals - that is, Singaporeans plus permanent residents - in the workforce are employed in professional, managerial, executive and technician (PMET) jobs, among the highest rates in the world, she said.

And for every EP holder, there are nearly seven locals employed in PMET roles.

In May, the EP salary threshold was raised to $3,900 for new applicants, from $3,600, and renewals will follow suit in May next year. Before that, it was last raised in 2017.

For S Pass holders, the minimum salary was increased to $2,400 in January, from $2,300 last year and $2,200 in 2018. Before that, it was last raised in 2013.

Mrs Teo said businesses that bring in skills that are in short supply or new networks of opportunity for Singapore will always be welcome.

At the same time, the Government will require companies to do more to develop and strengthen their Singaporean core.

Senior Minister Tharman Shanmugaratnam also highlighted the importance of a Singaporean core in the Monetary Authority of Singapore's (MAS) elaboration on the President's Address.

He said the central bank is working with major financial institutions (FIs) to ensure they employ a solid Singaporean core, including developing Singaporeans for senior roles, complemented by diverse and high-quality talent.

MAS is also working with employer, union and government partners to boost employment, traineeships and training in the financial sector.

For instance, under a $125 million support package launched by MAS in April, there will be structured talent development programmes for more than 900 Singaporeans among those newly hired by FIs in the next three years, said Mr Tharman, who is MAS chairman and Coordinating Minister for Social Policies.

He noted that the financial sector is on track to meet the targets in its industry transformation map for 2016 to this year.

The road map's target is for the financial services industry to create 3,000 net jobs and a further 1,000 in financial technology annually, and grow by 4.3 per cent per year on a real value-added basis.

MAS is also working with the Institute of Banking and Finance and Workforce Singapore to train and redeploy local mid-career workers into FIs, said Mr Tharman.

"The financial sector remains integral to Singapore's recovery from the Covid-19 crisis and longer-term growth," he said.

"MAS will work with the industry to ensure that the financial sector is well-equipped with the skills and capabilities to emerge stronger from the crisis, and advance Singapore as a global financial centre," he added.