Singapore’s retrenchments grow in Q4, but job vacancies also rise

[SINGAPORE] In the final quarter of 2024, retrenchments picked up, but so did job vacancies, the Ministry of Manpower’s (MOM) labour market report on Wednesday (Mar 19) showed.

Meanwhile, resident employment rose in both the fourth quarter and for the full year – a turnaround from 2023’s decline.

Retrenchments rose to 3,680 in Q4 from 3,050 in the third quarter, due mainly to the financial and insurance services sector – with 620 retrenchments, up from 270 – as more firms cut headcount on account of high costs.

Several “high-profile retrenchments” contributed to the rise, MOM’s director for manpower research and statistics Ang Boon Heng told a media briefing, citing Mastercard as an example. “(The) majority of retrenchments were still restructuring and reorganisation.”

Alongside higher retrenchments, 660 employees were placed on short work-week or temporary layoffs in Q4, up from the year-ago figure but comparable to pre-pandemic levels of fewer than 1,000.

The incidence of retrenchment rose but stayed low at 1.5 per 1,000 employees in Q4, compared with 1.4 in Q3, MOM said.

Despite this, retrenchments were down for the full year at 13,020, from 14,590 in 2023. There were 2,210 employees on short work-week or temporary layoffs in 2024, down from 3,110 the year before, “reflecting the overall positive business and economic sentiments”.

“Confident” in hiring

Job vacancies rebounded to 77,500 in December, following a decline to 61,500 in September.

Vacancies indicate employer confidence, said Ang. About 70 per cent of the openings were for jobs typically filled by residents.

Similarly, the job vacancy rate rose to 3.1 per cent, from 2.7 per cent before.

“The labour market remained tight, although it has moderated over the year,” MOM said. The ratio of job vacancies to unemployed persons was 1.64 in December, up from 1.32 in September but lower than the year-ago figure of 1.76.

In the near term, vacancies are likely to stay above the pre-pandemic quarterly average of 53,200, said DBS senior economist Chua Han Teng, adding they should be supported by positive hiring sentiment shown in MOM’s polls.

As business expectations remain sanguine, DBS expects resilient economic growth in the first half of 2025, “despite increased global uncertainties”.

Retrenched residents’ six-month rate of re-entry into employment fell to 58.1 per cent in Q4, from 60.4 per cent in the preceding quarter.

But re-entry rates rise significantly when considered over a longer period, Ang said, noting a trend in recent years of workers taking more time to re-enter jobs as they opt for training and skills upgrading.

Although re-entry rates fell even as retrenchments and job vacancies rose, “I don’t think we can simply say” this was due to mismatches, he said, adding that the profile of retrenched workers changes every quarter.

Resident employment picks up

In Q4, total employment rose by 7,700, slowing from Q3’s rise of 22,300.

Resident employment rose by 1,400, with strong increases in professional and financial services.

Non-resident employment grew by 6,300, easing from Q3, due to a smaller rise in work permit holders, especially in construction and manufacturing.

For 2024 as a whole, total employment grew by 44,500, slowing from 78,800 in 2023.

But resident employment rose by 8,800, reversing the previous year’s decline of 4,600. More residents were employed in higher-skilled sectors, MOM said, highlighting financial and insurance services, health and social work, professional services, and information and communications.

Chua said that this “crucial detail” bodes well for future resident income growth.

In contrast, resident employment declined notably in lower-skilled sectors, such as food and beverage services as well as administrative and support services.

For the full year, non-resident employment grew by 35,700, under half of 2023’s increase of 83,500. This was mostly among work permit holders, who filled “blue-collar jobs that residents were less likely to take”, MOM said.

The slower growth was due to fewer work permits being issued, said Ang.

After rising in the last two years, the number of Employment Pass and S Pass holders stayed broadly stable in 2024, as companies adjusted to the Complementarity Assessment Framework and higher salary requirements.

As at December, unemployment rates remained low and stable, with the overall rate at 1.9 per cent. It was 2.8 per cent for residents and 2.9 per cent for citizens.

Resident long-term unemployment also remained low at 0.8 per cent, similar to September’s level.

MOM noted that Singapore’s growth is forecast to slow to between 1 and 3 per cent in 2025, with global trade frictions and potential disruptions to the global disinflation process.

But continued expansion in manufacturing and outward-oriented services sectors are expected to support growth, it added. “Against this backdrop, MOM expects the labour market to continue to expand in 2025 – at least in the first quarter of 2025.”

In December, a larger share of employers expected to raise wages and headcount in the next three months, compared with September’s outlook, an MOM survey indicated.

However, OCBC chief economist Selena Ling believes that with the significant shifts in circumstances over the past quarter, December manpower polls are “water under the bridge”.

“Anecdotal evidence suggests that business sentiments, especially (among small and medium enterprises), have softened more recently. So hiring and wage growth intentions may cool further from here.”

Still, she expects the domestic labour market to remain resilient.

MOM also flagged that if trade tensions intensify and slow down Singapore’s economy, the labour market performance may weaken.

DBS’ Chua agreed that increasing global trade policy uncertainty poses a downside risk for trade-dependent Singapore. “Beyond the near term, the labour market’s resiliency will likely be increasingly tested.”

Commenting on a Facebook post, National Trades Union Congress (NTUC) assistant secretary-general Desmond Choo said that while the job market remains tight, Singapore must prepare for external growth slowdown.

He also highlighted several NTUC programmes, such as the Company Training Committees and career coach services, that workers can tap to level up.