Over half of employers plan hiring freeze, wage moderation despite better outlook: SNEF poll

[SINGAPORE] More than half of employers plan to pause hiring and freeze or moderate wages in 2027, even as their business outlook for the year improves slightly, the Singapore National Employers Federation (SNEF) said on Thursday (Sep 3).

At 63 per cent, a smaller proportion of employers expect to face uncertain business prospects in the upcoming financial year, compared with 72 per cent in 2026, according to the 2026 edition of the trade union’s wage and employment outlook survey.

Slightly more companies expect to perform well in 2026 (65 per cent) than in 2025 (63 per cent), it also found.

“Nonetheless, the business outlook remains highly uneven,” SNEF said.

Stronger external and technology-driven demand is supporting some outward-oriented sectors, it noted, but many domestically-oriented sectors – such as retail trade and food and beverage services – are grappling with weaker consumer demand and rising operating costs.

“This divergence underscores the increasingly K-shaped nature of Singapore’s economy, where sectors employing a larger share of lower-wage workers and relying more heavily on local demand face greater business and manpower cost pressures, despite improvements in the overall economy”, SNEF said.

The 2026 edition of SNEF’s manpower and wages outlook survey was conducted between June and August 2026. It gathered responses from 320 employers, employing close to 160,000 workers. Respondents came from 20 industries, and included companies of various sizes.

Measured approach

SNEF highlighted a “measured approach” to hiring and wages.

More than half of employers surveyed said they do not plan to increase their headcount in 2027, at 54 per cent – though this is down from 58 per cent in the last year’s survey.

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Still, a larger share of companies plan to hire, at 40 per cent for 2027, up from 33 per cent for 2026. The percentage of respondents in this year’s survey that plan to reduce headcount (6 per cent) was also smaller than last year’s (8 per cent).

As for the wage outlook, just over half (51 per cent) of the employers surveyed said they plan to carry out wage moderation or wage freezes in 2027, up 3 percentage points compared with 2026.

The remaining 49 per cent are planning to implement wage increases, down from 51 per cent before.

“This indicates continued caution in wage outlook among employers, particularly among small and medium-sized employers,” SNEF said.

For employers employing lower-wage workers, the majority (86 per cent) remain committed to giving built-in wage increases in 2027. However, this proportion shrank from nearly all employers (96 per cent) in 2026.

The remaining 14 per cent of respondents this year are planning a wage freeze for lower-wage workers. None plan to cut wages for this group in 2027.

Rising manpower cost continued to be the top manpower challenge for the next 12 months from June 2026 to May 2027, flagged by 83 per cent in the survey. This is higher than 79 per cent in the previous 12 months.

More companies also reported concerns over the rising cost of upskilling and reskilling their workforce as they prepare for evolving business and technology, at 30 per cent, compared with 23 per cent previously.

However, labour market tightness has eased compared to a year ago, SNEF said.

Fewer companies reported difficulties in attracting and retaining PMETs (41 per cent, down from 47 per cent) and a shortage of local high-skilled talent (35 per cent, down from 42 per cent) in the next 12 months.

Looking at employers’ human resource priorities, attracting suitable talent still remains key, at 59 per cent, though this is lower than 61 per cent previously.

Employers are also prioritising the exploration, adoption and enhancement of aritificial intelligence (48 per cent) and the upskilling and reskilling of their workforce (46 per cent).

“The survey findings suggest that while labour market pressures have eased somewhat, most employers continue to face significant cost pressures and uncertainties in business outlook,” said SNEF Council vice-president Kuah Boon Wee.

But he added that it is “encouraging” that employers continue to invest in workforce capabilities, job redesign and AI adoption to strengthen productivity and competitiveness.

It is also “heartening” that most employers remain committed to supporting lower-wage workers, he said.

“To ensure that this is sustainable in the long term, we need to continue helping employers, especially SMEs, access practical support to transform their operations and workforce for greater productivity uplift.”