However, more companies plan to increase their headcount in 2027, compared with last year’s survey
[SINGAPORE] More than half of employers do not intend to increase headcount in 2027. A majority also plan to freeze or moderate wages, despite a slight improvement in their business outlook for the year, said the Singapore National Employers Federation (SNEF) on Thursday (Sep 3).
The proportion of employers expecting to face uncertain business prospects in the 2027 financial year fell to 63 per cent, from 72 per cent in FY2026.
This year’s edition of the trade union’s wage and employment outlook survey also found that a slightly higher number of companies anticipate performing well in 2026 (65 per cent), compared with 2025 (63 per cent).
“Nonetheless, the business outlook remains highly uneven,” SNEF added.
Stronger external and technology-driven demand is supporting some outward-oriented sectors, it noted, but many domestically oriented sectors – such as retail trade and F&B 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,” said SNEF.
By company size, the findings suggest that smaller employers are generally more cautious than larger ones, SNEF said, in response to a query from The Business Times.
“Small and medium-sized employers were more likely to report uncertain business prospects and poorer business performance, and were also more likely to implement wage moderation or wage freezes in 2027,” it said.
“In contrast, larger employers generally reported a more positive outlook and are not planning wage freezes.”
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The 2026 edition of the survey was conducted between June and August. It gathered responses from 320 companies employing close to 160,000 workers. Respondents came from 20 industries, and included companies of various sizes.
Measured approach
SNEF highlighted the “measured approach” taken by companies to hiring and wages.
More than half, or 54 per cent, of employers surveyed said that they do not plan to increase their headcount next year – though this is down from the 58 per cent in the 2025 survey.
Still, 40 per cent of companies plan to hire in 2027, up from the 33 per cent that had a similar agenda for 2026. The percentage of respondents in this year’s survey that plan to reduce headcount (6 per cent) was also lower than last year’s (8 per cent).
As for the wage outlook, just over half (51 per cent) of the employers surveyed said that they plan to carry out wage moderation or wage freezes in 2027; this was up three percentage points from the figure for 2026.
The remaining 49 per cent are planning to implement wage increases, down from 51 per cent before.
“This indicates continued caution in the wage outlook among employers, particularly among small and medium-sized employers,” noted SNEF.
Among those employing lower-wage workers, the majority (86 per cent) remain committed to giving built-in wage increases in 2027. Last year’s survey had found that nearly all employers (96 per cent) had planned the same for 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 continues to be the top manpower challenge for the 12 months from June 2026 to May 2027.
This was flagged by 83 per cent in the survey, higher than the 79 per cent that had raised this concern for the previous 12 months.
More companies (30 per cent) also reported worries over the rising cost of upskilling and reskilling their workforce as they prepare for evolving business and technology, compared with 23 per cent previously.
However, labour-market tightness has eased from a year ago, SNEF added.
Fewer companies reported difficulties in attracting and retaining professionals, managers, executives and technicians (41 per cent, from 47 per cent), and a shortage of local high-skilled talent (35 per cent, from 42 per cent) over the 12 months to May 2027.
Looking at employers’ human-resources priorities, attracting suitable talent still remains key, at 59 per cent, though this is lower than the 61 per cent previously.
Employers are also prioritising the exploration, adoption and enhancement of artificial intelligence (48 per cent) and the upskilling and reskilling of their workforce (46 per cent).
SNEF Council vice-president Kuah Boon Wee said: “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.”
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 of them remain committed to supporting lower-wage workers, he noted.
“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.”
