But built-in wage increases planned for lower-wage workers in the country
More employers in Singapore will freeze their hiring and wages as they take a cautious approach in 2026 amid rising cost of living and global uncertainties.
A poll among 238 companies by the Singapore National Employers Federation (SNEF) revealed dipping business sentiments in the country as they face various manpower challenges.
"Employers are navigating 2026 cautiously, in view of rising costs of doing business and uncertainties in the overall global economy," said SNEF CEO Hao Shuo.
According to the findings, 58% of employers are planning to freeze headcount next year, up from 50% in 2024, with smaller employers more likely to do so (63%).
However, employers planning to reduce their headcount fell slightly to eight per cent, with larger employers more likely to cut their workforce (12%).
In terms of wages, 48% of employers said they would implement wage moderation or a wage freeze for FY2025/2026, up by 10 percentage points from a year ago.
"Employers indicated that they planned to give a lower wage increment compared to the previous year," the SNEF report read. "This indicates more caution in wage outlook among employers, particularly among small- and medium-sized employers."
Increases for lower-wage workers
Despite dipping business sentiments, the report found that most employers (96%) employing lower-wage workers (LWW) plan to give them built-in wage increases in the coming year.
Nearly four in 10 employers were planning to give higher increases for LWWs than to other employees in terms of percentage, according to the report.
A third said they were planning similar wage increases for all employees.
"It is heartening to see that many employers continue to invest in their people, especially lower-wage workers, as such investments ultimately help them build a stronger, more resilient, and future-ready workforce that can help businesses capture new opportunities in uncertain times," Shuo said.
"We encourage employers to align their wage decisions with the National Wages Council Guidelines that have just been released so that wage adjustments are fair and sustainable."
Manpower challenges in Singapore
Meanwhile, the report also found that rising manpower costs remained the biggest challenge (79%) expected by employers in the next 12 months. Other challenges that they anticipate include:
- Attracting and retaining professionals, managers, executives and technicians (47%)
- Shortage of high-skilled, local talent (42%)
More than three in five employers (62%) said they planned to offer a competitive salary and benefits package to address these challenges. They also planned to:
- Upskill or reskill employees to meet business needs (45%)
- Provide more flexible working arrangement options (30%)
Manpower challenges are a consistent problem for organisations in Singapore. In a previous Singapore Business Federation (SBF) survey, employers were asking the government to deliver schemes to address their manpower challenges in the Budget 2026.
