Salary growth holds at 3.9% as employers shift budgets toward critical roles

Cost management was cited by 35.1% of employers as the top driver of cautious salary planning.

Singapore is amongst the mature hubs in Asia Pacific, seeing stabilised salary increase budgets, as employers seek to balance cost discipline with the need to stay competitive for critical talent.

According to the latest Salary Budget Planning report by WTW, organisations in Singapore reported an actual salary increase of 3.9% in 2026, slightly below the 4.0% recorded in 2025, with projected increases expected to return to 4.0% in 2027.

“In Singapore, the focus is shifting from broad-based pay increases to more deliberate workforce and reward strategies, as employers redesign roles, strengthen job structures and invest in skills that remain central to business value creation,” WTW said.

Other key APAC markets highlighted by WTW are Taiwan, which also logged a 3.9% increase in its 2026 actual salary, and Hong Kong and Australia, which both recorded a 3.5% increase.

In its Total Remuneration Survey 2025, Mercer said employee salaries are expected to increase by 4% in 2026, mirroring the 4.1% growth recorded in 2025.

Jobstreet by SEEK’s Salary Pulse: Singapore 2026 report, meanwhile, said that most Singapore workers believe they are paid fairly, but only 37% are happy with their salary.

Budget discipline was equally visible at the organisational level, with 54% of Singapore employers reporting no gap between anticipated and actual salary budgets in 2026, whilst 26% ended up spending less than planned and only 7% spent more, WTW said.

“The findings point to a stable but cautious compensation outlook, with employers sharpening how salary budgets are allocated rather than expanding them broadly,” WTW said.

The report noted that cost management (35.1%), inflationary pressures (31.1%), weaker financial results (28.4%), and concerns over a tighter labour market or retention (20.3%) continue to drive employers’ cautious approach to salary planning.

On compensation programme adjustments, 58% of organisations made no changes, whilst 26% conducted reviews for specific employee groups and 18% responded by hiring at higher salary range entry points or raising starting pay. Additionally, 28% carried out a full compensation review across all employees.

With three-quarters of organisations expecting to hold workforce levels steady over the next 12 months, employers are increasingly looking beyond pay rises to anchor retention and build workforce resilience. 

Organisations are focusing on training opportunities, employee experience, and health and wellness benefits, whilst compensation actions become more tightly linked to role requirements, skills demand, and workforce structure, WTW said.

“This points to a more deliberate reward strategy, where employers are maintaining overall workforce stability while selectively investing in roles and capabilities that support digital transformation, regulatory resilience, customer engagement and operational execution,” said DN Prasad, head of work & rewards, Singapore at WTW.