Singapore’s youth employment crunch demands a new vision for work

SINGAPORE’S latest labour market update paints a tale of two realities. On the one hand, the nation’s overall unemployment rate remained stable at 2 per cent in the second quarter of 2025, reflecting resilience in a cooling global economy. On the other, youth unemployment is creeping upwards, with the rate for residents under age 30 rising from 5.4 per cent in March to 5.7 per cent in June.

This divergence highlights something deeper. There is a growing disconnect between what the job market offers and what the next generation of workers is actually looking for.

The end of “one job fits all”

For decades, the standard career path was simple: Graduate, land a full-time job, climb the ladder. But for younger millennials and Gen Z entering the workforce today, that model is neither appealing nor sufficient.

In Singapore, 88 per cent of Gen Z workers prefer hybrid work, found a 2024 study by International Workplace Group. Around 71 per cent of the study’s respondents said that hybrid options strongly influence their decisions to accept or stay in a role. This digitally native, highly educated generation is not avoiding work. They just want to do it differently. Freelance gigs, project work and remote roles are now the preferred direction for many.

Yet, their ambitions often collide with outdated systems. Robert Walters Singapore notes that a majority of companies still follow traditional headcount strategies, and 83 per cent are offering in 2025 the same number of days to work from home as last year. The structures in place simply have not kept up with how people want to work.

What’s really going on with youth employment?

The real story is not just about job shortages. Many young people are working, but outside the bounds of traditional employment. They are freelancing, building startups or contributing through contract roles. These contributions do not always show up in official statistics, even though they represent meaningful economic activity.

Beyond the numbers, the quality of available jobs matters. Many entry-level positions offer little skill development, flexibility or progression. Compared with global project-based opportunities that can be accessed through digital platforms, these roles often fall short. In response, some young workers are choosing to opt out of the conventional system altogether.

Where employers are falling behind

Having worked closely with organisations across the Asia-Pacific to engage and manage contingent talent, we have seen a clear gap between the expectations of younger workers and the systems used to support them.

CXC’s 2025 Global Contingent Workforce Experience Survey found that workers aged under 35 frequently report frustration with onboarding, transparency and outdated processes. These systems were built for permanent employees, and simply do not work well for a new, more dynamic workforce.

Only 34 per cent of contingent workers in this age group said they would recommend their most recent assignment to a peer. That is more than just a statistic. It is a clear sign that employers need to rethink how they support and engage flexible talent.

Addressing the concerns about flexible work

Models such as Employer of Record (EOR) and contractor-based teams are gaining interest, but they still raise valid concerns. It is important to address them openly and practically.

• Can you really build culture without permanent staff?

Yes, but it takes intentional effort. Many leaders worry that remote or flexible workers will not feel part of the company culture. Gallup’s State of the Global Workplace report found that only 28 per cent of fully remote workers feel deeply connected to their company’s mission. Yet, they are also the most likely to be engaged.

The difference often lies in how companies communicate. Leading employers build inclusion through mentorships, virtual communities and consistent engagement that includes everyone.

• What about knowledge loss or intellectual property risks?

Flexible work models can raise questions about protection of intellectual property and retention of institutional knowledge. These are real risks, but they are not new. They exist in any workforce structure. The difference is in how companies prepare. Secure cloud systems, strong contracts and clear processes for knowledge-sharing can ensure that even short-term contributors leave a lasting positive impact.

• Does flexible work mean less security?

This is perhaps the biggest worry for younger workers. If flexibility comes with no Central Provident Fund contributions, healthcare and/or career growth, it starts to look more like instability than empowerment. But this does not have to be the case.

Many employers are working with EOR providers that bundle healthcare, insurance and compliance into their offering. This allows companies to offer both autonomy and protection. While EOR services can add monthly costs, they also reduce long-term risk and open up new possibilities for global hiring.

Rethinking what employment means in 2025

Contingent work is growing fast across Asia-Pacific. The regional market was valued at US$120 billion in 2023 and is projected to reach US$205 billion by 2032, according to Dataintelo. By 2025, nearly one in four companies in the region plans to increase their use of contingent workforce solutions, notes a study in the Journal of Informatics Education and Research.

Companies that are already making the shift are reaping the benefits. Blending permanent teams with freelance, contract or remote talent gives organisations the agility to respond to market shifts, access specialised skills and control costs more effectively.

This shift is not a future prediction. It is already well underway.

Singapore has always been a leader in innovation, education and adaptability. It has a chance to lead again, this time by redefining what work looks like for the next generation.

That means reframing flexible models as sustainable rather than secondary. It means bundling compliance and benefits into EOR and contractor solutions. And it means building digital infrastructure that supports the way young people want to work.

The World Economic Forum’s Future of Jobs Report 2025 notes that 92 million jobs are expected to be displaced by 2030. The stakes are high. Traditional employment frameworks are not equipped to meet the needs of today’s workforce.

Youth unemployment is not just a problem to fix. It is a market signal that the system needs to evolve. Singapore can lead this transformation and become the standard for how modern economies thrive with a workforce that is flexible, inclusive and built for the future.

The writer is managing director for Asia at CXC