Singapore 2025 in Review: What Employers Should Change in 2026

This article is written in English for readers in Singapore. Chinese and Japanese translations are available on our website. 

Singapore’s Labour Market in 2025 — A Year of Adjustment

As 2025 draws to a close, Singapore’s labour market shows signs of stabilisation after two years of post-pandemic recovery. Growth has slowed, but employment remains resilient, and employers are now focusing on quality over quantity in their hiring and workforce planning.

According to the Ministry of Manpower’s (MOM) Labour Market Report 2025, total employment excluding migrant domestic workers rose by 10,400 in Q2 2025, rebounding from the modest 2,300 increase in Q1. Resident unemployment held steady at 2.8%, while citizen unemployment remained low at 2.9%. Retrenchments also declined to 1.4 per 1,000 employees, reflecting continued economic resilience even amid slower global demand.

However, as reported by Channel NewsAsia and Reuters, businesses are becoming more cautious about wage increases and headcount expansion in 2026 due to global uncertainty, digital transformation, and productivity shifts in professional services and technology sectors.

4 Key Lessons for Employers Heading into 2026

1️⃣ Quality Hiring Will Outperform Quantity Hiring

MOM data shows that job-vacancy rates eased from 3.2% in March to 2.9% in June 2025, marking the first consistent decline in two years. This signals a cooling but still competitive market.

What to change in 2026:

Focus on strategic hires who bring deep expertise, cross-functional skills, or bilingual capability. Replace blanket headcount growth with targeted upskilling, succession planning, and internal mobility programmes.

2️⃣Compensation Must Evolve Beyond Basic Pay

Singapore’s average real wage growth was around 3.2% in 2024, but fewer firms plan major increases for 2026. Instead, more companies are diverting budgets to skills-based allowances, hybrid work support, and employee wellness benefits.

What to change in 2026:

Adopt a Total Rewards model that values career development, flexibility, and purpose. Reeracoen’s 2025 Workforce Whitepaper highlights that 7 in 10 professionals prioritise meaningful work and fair leadership over salary alone.

3️⃣Internal Mobility Is the New Retention Strategy

With slower external hiring and continued talent shortages, companies are looking inward. Reeracoen’s client data shows that 62% of hiring managers now prefer internal transfers to external recruitment for mid-career roles.

What to change in 2026:

Link performance reviews to career-path planning and offer structured rotation opportunities. Internal moves reduce cost, enhance engagement, and improve productivity within 90 days of redeployment.

4️⃣Skills, Not Titles, Will Define Competitive Advantage

SkillsFuture Singapore’s 2025 Skills Demand Outlook identifies AI literacy, sustainability management, and data analytics as the top emerging skill clusters. Employers embracing skills-first hiring will have a stronger edge in attracting cross-border talent through One Pass and Tech.Pass schemes.

What to change in 2026:

Conduct an internal skills audit and align your learning budgets to industry trends. Reward employees for skill acquisition instead of tenure.

How Reeracoen Supports Employers for 2026

At Reeracoen Singapore, we help companies future-proof their workforce through:

• Custom salary benchmarking by sector and skill set.
• Data-driven talent insights from the APAC Workforce Whitepaper 2025.
• Retention and onboarding frameworks that reduce turnover costs.
• Consultation on bilingual recruitment and One Pass workforce planning.

We go beyond recruitment — we’re your workforce intelligence partner for Singapore and APAC.

 

🔍 FAQ — Singapore’s Labour Market 2025 & Employer Readiness

Q1. Is hiring expected to slow in 2026?

Hiring will moderate but not freeze. Employers will prioritise quality hires with adaptable, multi-disciplinary skills.

Q2. What salary increases should companies plan for?

Industry benchmarks suggest around 4% average increases, with higher adjustments (6–8%) for critical digital, bilingual, and green-tech roles.

Q3. How can smaller companies remain competitive?

Offer flexible benefits, hybrid-work policies, and career-development allowances to retain talent despite smaller pay budgets.

Q4. What’s the key success factor for 2026?

Balancing efficiency with empathy — employers who combine automation, fairness, and transparent communication will outperform competitors.

 

💼 For Employers: Book a Consultation | Submit a Job Description

👩‍💼 For Jobseekers: Browse Jobs | Submit Your CV

 

✅ Final Author Credit
By Valerie Ong (Regional Marketing Manager)
Published by Reeracoen Singapore — a leading recruitment agency in APAC.

 

🔗 Related Articles

• Top 10 Hiring Trends to Watch in 2026 (Singapore)
• Salary & Benefits 2026: What Singapore Employers Should Budget For
• Cracking Retention in 2026: Why Onboarding Makes or Breaks Engagement

📚 References 

• [Ministry of Manpower – Labour Market Report Q2 2025]
• [Ministry of Manpower – Labour Market Advance Release Q1 2025]
• [Channel NewsAsia – Employment Growth Rises in Q2 2025]
• [Reuters – Wages in Singapore Grew 3.2 % in 2024]
• [SkillsFuture Singapore – Skills Demand Outlook 2025]
• [Reeracoen × Rakuten Insight APAC Workforce Whitepaper 2025]

 

 

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