How to Build a Modern HR Function on a Shoestring in Singapore

Unfortunately, the best business plan in the world fails nine out of 10 times if you don’t have the right people making it happen. 

Despite this, a ton of businesses in Singapore don’t have a good enough Human Resource function to attract the right people to grow their business. Often these businesses love to blame a lack of budget or resource as the reason for the HR function being below expectations.

I’m sorry, but the ‘no budget, no HR’ excuse simply doesn’t work in Singapore – here’s why:

Singapore has one of the most supportive environments for SMEs and technology in general – supersizing your HR function in Singapore through effective HR outsourcing and technology is unbelievably cost effective (bordering on free in some cases!). Links International has a network of offices throughout Asia and Singapore is one of our favorite places to do business.

Here’s our guide to creating a game-changing HR function on a shoestring in Singapore:

1. Don’t be afraid to apply for the Capability Development Grant (up to 70% government grants for qualifying spend)

Are you a Singapore SME with at least 30% Singaporean shareholding? You can claim up to 70% of your Singapore Payroll Outsourcing cost back – that’s getting close to free! What would you do with an extra couple of days each month as a result of not doing payroll admin? It’s an absolute no-brainer and, if you’re not using the CDG, you need to start now!

Utilising Payroll outsourcing in Singapore enables you to reduce your cost and (more importantly) removes the distractions associated with HR administration in Singapore, allowing you to focus on making a difference in your business.  Specific payroll outsourcing costs that are generally covered by the CDG are broad and include:

One-time set up costs, for example:

  • HR needs analysis by the Singapore payroll outsourcing provider
  • Improvement of existing HR policies and processes
  • Implementation of the Singapore outsourcing solution, including data migration from existing processes to the payroll outsourcing provider’s HCM

Monthly subscription costs:

2. Make use of the Productivity and Innovation Credit (at a minimum a 40% cash refund on eligible spend)

Employ as least three Singaporeans? You’re eligible to receive a 40% cash refund (or 400% tax deduction) on the purchase and leasing of IT and automation equipment related to your HR function. A 40% off sale at Le Creuset would cause a 2,000-person queue down Orchard Road!

If you are thinking of buying or leasing HR tech (including via PaaS or SaaS) you can hugely reduce the cost of the use of the HR tech and streamline your HR function by utilising the PIC (I suggest leasing rather than buying HCMs in Asia). Yes – this means that the HR analytics tool you’ve been looking at has almost halved in price, which is a great deal in any part of the world!  Further guidance in respect to typical equipment the PIC can be claimed on can be found here.

In addition to the lease of HR technology, you can also use PIC to help up-skill your HR team by claiming PIC in respect of qualifying in-house and external training of employees in relation to HR skills. Further guidance in respect of qualifying expenditure can be found here.

3. Cash in all 8 of your Innovation & Capability Vouchers

Not sure on the first place to improve your HR function? Innovation and Capability Vouchers are SGD5,000 vouchers that can be used on short-term consultancy to develop your HR capabilities.  Again, accessible if you are a Singapore SME with at least 30% Singaporean shareholding! Typically, projects include:

  • Recruitment & selection – engaging approved service providers to recommend recruitment strategies based on the profile of the company and putting in place recruitment processes to attract candidates and review their suitability using a variety of industry-leading assessment tools.
  • Compensation & benefits – engaging approved service providers to set up compensation and benefits strategies, including base salary, performance and sales compensation, administration of payroll, leave and benefits, all tailored to the company’s profile.
  • Performance Managers – to set up appraisal guidelines to monitor employees’ performance based on agreed KPIs. To facilitate improved performance by setting objectives, appraisals, coaching and encouraging feedback.
  • Learning & Development – to set up training and development guidelines of employees, in order to provide competency-based training plans based on the needs of the individual and the company.

There is no excuse for having a below-par HR function in Singapore, regardless of your business size. Singapore has a ton of incentives that are hugely powerful in encouraging SMEs to step up their HR tech and practices to the next level without a huge financial or administrative burden. Start building a super HR function in Singapore while the incentives last!

Links International was voted Best Payroll Outsourcing Partner at the HR Vendors of the Year Awards 2015. If you are interested in learning more about how to elevate your HR function and focus on higher value strategic activities, please contact us.