Singapore’s High Cost of Living and the Foreign Workforce Singapore is renowned for its high cost of living. Companies—especially in the construction and manufacturing sectors—must rely on renting worker dormitories However, managing accommodation for these workers has become an increasingly pressing challenge.
If you are a business owner or HR professional looking to reduce costs, boost workforce efficiency, and maintain international labor standards, understanding the benefits of renting worker dormitories is essential.
Singapore—from cost and worker welfare to legal compliance and broader business and societal impact.
The Necessity of Foreign Labor in Singapore
Singapore has an open economy that heavily depends on foreign labor. According to the Ministry of Manpower (MOM) in 2024, approximately 1.2 million foreign workers live and work in the country, making up over one-third of the total labor force—an exceptionally high ratio for a country with a population of just around 5.6 million.
Among these, the majority are “Work Permit Holders”—low-skilled workers from neighboring countries like Malaysia, Bangladesh, Indonesia, Myanmar, India, and China. They typically work in sectors that Singaporeans tend to avoid, such as:
- Construction: Large-scale infrastructure projects such as MRT lines, high-rises, and industrial estates.
- Marine and shipyard: A core component of the export economy.
- Manufacturing and factories: Including electronics, assembly lines, and food production.
- General services: Domestic helpers, cooks, cleaners, and caregivers.
Why Singapore Relies on Foreign Workers
The key drivers behind Singapore’s reliance on foreign labor are:
- Local labor shortages in certain sectors: With higher education levels, locals tend to avoid physically demanding or high-risk jobs and prefer roles in services or tech.
- Lower cost of foreign labor: Hiring foreign workers in specific roles helps companies stay competitive, particularly in high-pressure industries.
- Stability in long-term projects: Foreign workers on long-term contracts often stay through project completion without frequent job changes.
Singapore’s Worker Dormitory System
The COVID-19 Turning Point: Rethinking Dormitory Conditions The 2020 pandemic was a critical moment for Singapore’s worker dormitory system. Many dorms became infection hotspots due to overcrowding and poor hygiene—issues long overlooked.
Reform Initiatives Triggered by the Crisis
Before the pandemic, many worker dorms were overcrowded with inadequate sanitation. The health risks escalated during the outbreak, especially in large-scale dormitories where most construction and manufacturing workers resided.
As a result, the government took serious steps to reform foreign worker housing policies—raising dormitory standards to align with basic human rights principles.
New Dormitory Standards: More Than Just a Place to Sleep
Today, government-approved renting worker dormitories must meet specific guidelines focused on safety, comfort, and resident wellbeing. For example, Avery Dormitory have become a model of the modern dorm, offering more privacy and a better living environment.
Standard-compliant dormitories must provide:
- Minimum 4.5 sqm per person: To reduce crowding and increase personal space.
- Hygienic toilets and showers: To prevent disease transmission.
- Wi-Fi and recreation spaces: For mental health and family communication.
- Exercise areas: Promoting physical and mental wellness.
- Integrated safety and hygiene systems: Including CCTV, temperature checks, and emergency response plans.
A New Option for Businesses: Professionally Managed Dorm Rentals
Given these strict regulations, many companies—especially in construction and heavy industry—now opt to rent from certified, full-service dormitory providers instead of building or managing accommodations themselves.
Professional dorm rentals not only reduce the management burden but also ensure that workers are housed according to government standards—benefiting company image, sustainability, and recruitment.
Benefits for Companies
Professional dormitory services are increasingly popular because they:
- Reduce internal management burdens
- Support ESG initiatives and labor standards
- Improve business performance
- Enhance stakeholder trustSet featured image
Lower Administrative Costs
Managing worker accommodations in-house involves costs: staffing, security, utilities, repairs, and ongoing maintenance. These costs can become excessive. Outsourcing offers predictable expenses and reduces internal workload.
Simpler Legal Compliance
Foreign worker accommodation is subject to strict regulations—such as the Foreign Manpower Act and workplace safety laws. Non-compliance risks fines, suspensions, or even revocation of labor import licenses.
Partnering with licensed dorm providers helps companies stay compliant and protect their legal standing and reputation.
Boosted Worker Productivity
Quality housing directly impacts worker wellbeing. Clean, safe dorms with basic amenities and wellness programs promote better physical and mental health. This reduces stress, improves rest, and increases work motivation and loyalty—indirectly boosting labor efficiency.
Enhanced Corporate Reputation
In today’s ESG-focused world, labor welfare isn’t just a legal issue—it’s a marker of social responsibility. Companies that offer safe, high-quality accommodations gain trust from civil society, investors, and clients. This fosters long-term financial and reputational sustainability and helps position the firm as an “employer of choice.”
Benefits for Foreign Workers
Foreign workers are crucial to economies—especially in construction, manufacturing, and services. Yet they often face poor living conditions, limited healthcare access, and social isolation. Singapore, like several nations, is now transforming worker dorms into holistic environments promoting safety, health, and overall wellbeing.
Improved Health and Safety
Standard-compliant renting worker dormitories offer better ventilation, clean shared spaces, and sanitary conditions—lowering the risk of disease. Security systems like CCTV, emergency alerts, and monthly safety drills also reduce accidents and build daily confidence among residents.
Welfare and Lifestyle
Many dorms in Singapore now go beyond basic shelter. They include modern amenities and wellness activities like weekend movie nights, sports events, and life-skills workshops. These help workers manage stress, feel valued, and stay engaged.
Social Inclusion
Community-based dorms create shared spaces for foreign workers from various cultures to interact—preventing social isolation. Some dorms even offer volunteer opportunities or cultural exchanges with locals, fostering cross-cultural understanding and social harmony in Singapore’s multicultural society.
Legal and Regulatory Compliance
Providing legal housing is a key duty for companies hiring foreign workers in Singapore. Renting from licensed operators ensures effective workforce management and full compliance with MOM regulations—reducing the risk of penalties.
Key Legal Frameworks
- Foreign Employee Dormitories Act (FEDA): Oversees large-scale dorms, requiring providers to be licensed and to meet standards in safety, hygiene, emergency response, and worker welfare.
- Dormitory License Regulations 2021: Updated post-COVID to enforce crowd control, isolation areas, medical access, and utility reliability.
- Density and Hygiene Rules: Restrictions on room occupancy, distancing in shared areas, and strict cleaning standards.
In 2023, MOM allocated over SGD 100 million to inspect, upgrade, and modernize the entire dormitory system—covering infrastructure, security, environmental monitoring tech, and caretaker training.
Conclusion
Renting worker dormitories in Singapore offers major benefits to both businesses and foreign workers—from reducing costs and ensuring compliance to boosting productivity and enhancing worker quality of life. As labor management trends align with human rights and sustainability, companies that prioritize worker wellbeing will gain advantages in economics, society, and branding.
Q&A: Frequently Asked Questions
Q: Is it mandatory for companies to rent dorms externally?
A: No, but in-house accommodations must strictly comply with legal requirements.
Q: What’s the average monthly dorm rental per worker?
A: Typically SGD 200–400/month, depending on location and amenities.
Q: Can a dorm house workers from multiple companies?
A: Yes, if it’s a “Purpose-Built Dormitory (PBD)” licensed by MOM.
Reference
- Ministry of Manpower Singapore – https://www.mom.gov.sg
- The Straits Times (2023), “New Dorm Standards to Raise Workers’ Living Conditions”
- Channel News Asia – “Inside Singapore’s Modern Worker Dormitories”, 202