Salary increases are coming to Singapore despite growing concerns of manpower costs and talent availability
More than a third of employers in Singapore are planning to raise employees' salaries despite growing concerns about costs, according to a new report.
The latest poll from the Singapore Business Federation (SBF) revealed that 39% of employers are increasing employees' salaries in the next 12 months as part of their response to the current economic situation. They also plan to:
- Invest in new technologies and digitalisation (33%)
- Expand into new overseas markets (30%)
- Invest in staff training (29%)
- Re-engineer business processes (29%)
The findings come despite manpower costs emerging as the top challenge (63%) cited by businesses in Singapore, according to the report.
Manpower is the top driver pushing up business costs in Singapore, as cited by 65% of employers. This is followed by rental (46%) and logistics (46%) costs.
But their intentions to raise salaries may stem from persistent challenges in finding and retaining talent.
According to a third of employers, the availability and retention of manpower are two of their biggest challenges this year.
"Availability of manpower has the highest impact on Hotels, Restaurants & Accommodations and Health & Social Services sectors," the report read.
Government assistance needed
To ease their challenges, employers across Singapore are asking the government to deliver schemes to address costs and manpower challenges in the Budget 2026.
About two in three (63%) employers said their top request for the Budget is a scheme to address costs.
Another 46% said they are requesting initiatives to attract, develop, and retain the local workforce.
"Businesses are calling out for support in managing costs, cash flow, and workforce development in Budget 2026," said SBF CEO Kok Ping Soon in a statement.
"It reflects their desire to maintain resilience while investing in capability building."
