Most companies opt for operational tweaks over staffing cuts
Most employers in Singapore have yet to make workforce or workplace adjustments in direct response to rising energy prices, even as nearly all report higher operating costs, according to a snap poll by the Singapore National Employers Federation (SNEF).
The poll, conducted April 10-16, drew responses from 210 companies across the manufacturing, services, and construction sectors.
Some 96% of companies polled reported higher operating costs amid elevated energy prices, while 53% flagged concerns over rising labor cost pressures.
Among those with higher operating costs, roughly two-thirds reported moderate to significant cost increases exceeding 10%. Utilities and fuel were the most affected cost components, each cited by 70% of companies, followed by materials and supplies at 59% and air and sea freight at 53%.
Respondents noted that higher energy prices had a knock-on effect on business operations, driving up costs for raw materials, supplies, and logistics. Companies in the hospitality, food and beverage, and retail sectors also reported upward pressure on temporary labour costs.
“Taken together, these pressures were squeezing margins, especially amid softer consumer demand,” SNEF said.
Employers hold off on workforce changes
Despite widespread cost pressures, 83% of employers said they had not implemented workforce or workplace changes in direct response to higher energy prices. SNEF said this suggests most companies are exploring operational adjustments before resorting to measures that affect employees directly.
“These are largely calibrated responses aimed at managing costs while preserving jobs,” the federation said.
Among companies that had made changes, about two-thirds had frozen hiring or delayed expansion plans. A quarter reduced bonuses, allowances, or benefits. Other measures included reductions in work hours or shifts, staff redeployment, and headcount reduction through natural attrition.
Employers seek government support
Employers called for targeted relief if energy prices remain elevated over the next 12 months. Some 83% sought tax relief or financing assistance, 77% called for energy cost subsidies, and 55% asked for delays in manpower policy changes that would add further cost burdens.
The poll also found that 39% of respondents held a negative outlook for the next six to 12 months.
“Beyond the immediate cost pressures, employers highlighted deeper concerns over growing disruption to global business and trade, noting that supply chains are being redrawn and investment decisions are becoming increasingly cautious,” SNEF said.
SNEF CEO Hao Shuo welcomed existing government support measures, including a higher corporate income tax rebate, while calling for further flexibility. “As the global economic situation remains quite fluid, we hope that the government will consider the prevailing economic conditions when implementing the earlier announced foreign manpower policy changes,” he said.
Hao also called for a tiered support structure under the enhanced Progressive Wage Credit Scheme to assist employers raising wages for lower-wage workers.
Under Budget 2026, employers looking to hire foreign workers are expected to pay more from 2027, with the minimum qualifying salaries for Employment Pass holders rising from $5,600 to $6,000, and for S Pass holders from $3,300 to $3,600, The Star reported.
