In an increasingly volatile business environment, more employers are planning to freeze hiring and moderate wages in 2026, a survey by the Singapore National Employers Federation (SNEF) showed on Tuesday (Dec 2).
Out of 240 firms polled, almost three in five (58%) said they plan to freeze hiring in 2026—up from 50% in 2024. Smaller employers were even more cautious, with 63% indicating they are likely to halt new hires.
On the other hand, around 8% of employers plan to reduce headcount, which is similar to 2024’s 9%. Of this, 12% of larger employers are more likely to reduce their headcount. Only a third of respondents plan to increase hiring.
These hiring decisions come as business sentiment weakens, with 72% of employers reporting uncertain prospects this year—a sharp rise from 58% in 2024.
Close to 50% plan to exercise wage moderation or a wage freeze
Close to half of the employers (48%) also plan to implement wage moderation or a wage freeze for FY2025/2026, an increase of 10% from the last financial year. Many indicated that they expect to grant smaller wage increments compared to last year.
“This indicates more caution in wage outlook among employers, particularly amongst small and medium-sized employers,” the federation added.
Most of these firms (79%) cited rising manpower costs as a key challenge, roughly in line with 2024’s 81%. In addition, 47% employers highlighted difficulties in attracting and retaining professionals, managers, engineers, and technicians, while 42% indicated a shortage of high-skilled talent.
To address these obstacles, 62% of employers plan to offer a competitive salary and benefits package. Another method of alleviating manpower challenges is upskilling/reskilling employees to meet evolving business needs, with 45% employers doing so.
A smaller proportion of employers (30%) are also willing to offer more flexible working arrangements.
Firms are maintaining support for lower-wage workers
Despite the cautious outlook, SNEF highlighted that 96% of employers employing lower wage workers planned to provide them with built-in wage increases in the coming year, “reflecting continued employer commitment to uplift this group of workers.”
Nearly 40% of employers intended to give proportionally higher increments to lower-wage workers than to other employees, while 33% planned similar increments for all employees. The remainder indicated that other factors, such as performance, would be more critical than a differentiated wage increase based on wage levels.
“It is heartening to see that many employers continue to invest in their people, especially lower-wage workers, as such investments ultimately help them build a stronger, more resilient, and future-ready workforce that can help businesses capture new opportunities in uncertain times,” said Hao Shuo, Chief Executive Officer of SNEF.
Employers were also encouraged to align their wage decisions with the recently released National Wages Council Guidelines, “so that wage adjustments are fair and sustainable,” Hao added.
- Read other articles we’ve written on Singapore’s job market here.
Also Read: Half of Singaporeans are on track to earn S$6,000 per month or more from 2026
Featured Image Credit: Shadow_of_light/ depositphotos
Last modified: December 3, 2025
