SNEF calls for more foreign-manpower flexibility, cost relief in Budget 2026 wish list

[SINGAPORE] The Singapore National Employers Federation (SNEF) on Tuesday (Dec 16) set out seven recommendations for Budget 2026, spanning measures to improve access to foreign manpower and to extend government co-funding support for lower-wage workers beyond next year.

In a press statement, SNEF said that while the Ministry of Trade and Industry had upgraded its 2025 gross domestic product growth forecast to “around 4 per cent”, the business outlook remains uneven across industries. 

About three in four employers expect uncertain business prospects in 2026, which could weigh on hiring and wage growth, it added. 

SNEF president Tan Hee Teck said that the proposals for the February Budget are aimed at easing manpower and cost pressures, while helping businesses adapt to a more digital and artificial intelligence (AI)-enabled economy.

“We are calling for stronger support in workforce transformation, skills upgrading and technology adoption, so that employers can stay competitive and workers can progress,” he added.

Managing costs and workforce transformation

SNEF’s first recommendation centres on improving access to a “complementary, skilled foreign workforce”.

The federation said it recognises that Singapore’s foreign-manpower policies must “strike a careful balance between ensuring access to essential skills and safeguarding employment opportunities for locals”.

However, employers have highlighted difficulties in filling key roles amid tighter foreign-manpower policies, rising qualifying salaries, and persistent local-manpower shortages, it added. 

Thus, it proposed offering greater flexibility in hiring foreign manpower to employers that adopt progressive employment practices – such as flexible work arrangements or the hiring and retention of senior workers. It also suggested the same for firms that are undertaking productivity or restructuring projects.

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SNEF proposed easing the bottlenecks in hiring as well, by expanding the approved source countries for work permit holders. 

This can be done by adopting more sector-differentiated sub-quotas for industries facing acute labour shortages, and moderating the pace with which qualifying salaries for S Pass and employment pass holders is increased. This would keep manpower costs manageable, it noted. 

The second recommendation focuses on supporting a rapidly ageing Singaporean workforce.

SNEF called for extending the Senior Employment Credit and the Central Provident Fund (CPF) Transition Offset to beyond 2025 and 2026, respectively, to help employers manage the higher manpower and healthcare costs of employing senior workers, which can be significant for small and medium-sized enterprises (SMEs). 

The federation also proposed stronger grants for workplace redesign and age-friendly technologies to sustain senior employment.

The third recommendation urges stronger support to accelerate digital transformation and AI adoption.

SNEF said that businesses, particularly SMEs, recognise the importance of digitalisation, automation and AI for productivity growth, but many remain unsure about where to begin. 

It called for wider access to affordable, ready-to-deploy “plug-and-play” AI tools, expanded subsidies that cover training, reskilling and change management, and more structured AI training and certification pathways to build workforce capabilities.

The fourth recommendation calls for continued support to help businesses manage rising costs.

SNEF noted that employers continue to face cost pressures from wages, CPF contributions, rentals and utilities. It thus called for ongoing broad-based relief, including more targeted support for rental and utility expenses, particularly for SMEs.

This can free up resources for productivity, innovation and workforce development, it added.

The fifth recommendation deals with strengthening workforce transformation and leadership capabilities.

SNEF said that the scale, duration and cost of training pose significant operational challenges for employers, particularly SMEs with lean teams. 

To encourage greater investment in skills development, it asked for longer support for Career Conversion Programmes, funding to offset absentee payroll or study leave costs, and stronger co-funding for leadership and management training to help firms build succession pipelines and develop the next generation of leaders.

Sustaining progressive workplaces and wage growth

The federation noted that while employers remain committed to “national priorities in strengthening marriage and parenthood outcomes so as to bolster Singapore’s workforce growth”, these initiatives have added to business costs and operational demands. 

It said that its final two recommendations therefore aim to support employers’ capabilities in human resource management, to help ease these pressures.

The sixth recommendation seeks to sustain progressive employment practices.

SNEF pointed out that employers require additional support to implement workplace safety and health, mental well-being initiatives, workplace fairness practices and flexible work arrangements, particularly in sectors with less operational flexibility. 

It called for expanded short-term staffing support to manage employee absences, stronger ecosystem support for flexible work arrangements, and more targeted assistance to promote mental well-being and fair employment practices.

The seventh recommendation calls for a sustainable uplift of lower-wage workers.

While backing tripartite efforts to raise wages, SNEF said that rising cost pressures from the expansion of the Progressive Wage Model and higher wage floors have heightened employer concerns. 

It therefore urged the government to enhance and extend the Progressive Wage Credit System beyond 2026 to help firms meet wage commitments sustainably without compromising productivity or job-redesign efforts.