Manpower flexibility and senior worker costs emerge as key concerns for businesses
The Singapore National Employers Federation (SNEF) has submitted recommendations for Budget 2026 Tuesday, urging the government to provide targeted support as businesses navigate manpower constraints and rising operational costs despite an improved economic outlook.
Uncertain business climate
While the Ministry of Trade and Industry upgraded Singapore’s 2025 GDP growth forecast to about 4%, roughly three in four employers expect uncertain business prospects in 2026, SNEF said. The uncertainty could weigh on hiring intentions and wage growth across industries.
“Our Budget 2026 recommendations are focused on easing manpower and cost pressures while helping businesses adapt to a more digital and AI-enabled economy,” SNEF president Tan Hee Teck said. “We are calling for stronger support in workforce transformation, skills upgrading, and technology adoption so that employers can stay competitive and workers can progress.”
Foreign manpower flexibility
SNEF recommended greater flexibility in foreign manpower policies, particularly for employers adopting progressive employment practices such as structured flexible work arrangements and enhanced caregiving leave. The federation proposed temporary quota adjustments for companies undertaking productivity improvements.
The organization also called for expanding approved source countries for Work Permit holders and moderating the pace of qualifying salary increases for S Pass and Employment Pass holders.
Supporting senior workers
With Singapore’s workforce aging rapidly, SNEF urged extending the Senior Employment Credit beyond 2025 and continuing the CPF Transition Offset beyond 2026. The measures would help employers manage higher costs from increased CPF contribution rates for senior workers, which take effect in January 2026.
Technology adoption push
SNEF emphasized accelerating digital transformation and artificial intelligence adoption, particularly among small and medium-sized enterprises. The federation recommended providing access to ready-to-deploy AI tools and expanding subsidies to cover employee training and change management.
“While they are excited about AI, many are unsure where to start,” SNEF said in its recommendations on SMEs.
Workforce development
The federation proposed extending support durations for Career Conversion Programmes and introducing absentee payroll funding to incentivize employers to release workers for intensive training. SNEF also recommended co-funding leadership and management course development, which it said would be particularly beneficial for SMEs strengthening succession pipelines.
Progressive wage support
SNEF called for enhancing and extending the Progressive Wage Credit Scheme beyond 2026 to help employers sustain wage commitments amid expanding coverage and higher wage floors under the Progressive Wage Model.
The federation said that while employers support tripartite efforts to uplift lower-wage workers, rising cost pressures require continued government assistance to sustain productivity investments alongside wage increases.
SNEF also acknowledged the government’s acceptance of earlier recommendations, including the extension of the Senior Employment Credit and CPF Transition Offset schemes and the introduction of the Enterprise and Workforce Transformation Package.
The federation represents more than 3,900 companies employing about 870,000 workers.
