Why over half of employers plan a 2026 hiring freeze

Despite the cautious tone, wage plans for lower-wage workers remain firm. 

More employers plan to freeze hiring next year, with 58% expecting to hold headcount steady in 2026 compared with 50% a year earlier, according to a new survey by the Singapore National Employers Federation (SNEF).

SNEF said business sentiment has weakened, with 72% of employers reporting uncertain prospects, up from 58% in 2024. This cautionary view aligns with the Singapore Business Federation (SBF) National Business Survey 2025, which reported that overall business confidence fell for the second consecutive quarter.

“More businesses express dissatisfaction (32%) with the global business climate compared to satisfaction (10%), whereas an equal proportion of businesses express dissatisfaction and satisfaction with the ASEAN business climate (19%),” the report read.

Wage expectations have also softened. According to SNEF, 48% of employers intend to freeze or slow wage growth in FY2025/26, a rise of 10 percentage points from the previous year, and overall increments are expected to be lower.

However, official figures suggest the labour market remains robust: the Ministry of Manpower (MOM) Labour Force in Singapore Advance Release 2025 indicated that real median income for resident workers continued to grow by 4.3% in 2025, contrasting with employers' cautious intentions for 2026.

Rising manpower costs remained the top challenge, cited by 79% of respondents, close to 81% in 2024. This concern is pervasive, as SBF also cited manpower costs as the top business challenge for its members.

Employers also pointed to difficulties attracting and retaining PMETs (47%) and a shortage of high-skilled local talent (42%).

SNEF said planned responses include competitive pay and benefits (62%, down from 70%), upskilling and reskilling (45%), and flexible work options (30%, down from 49%).

Despite the cautious tone, wage plans for lower-wage workers remain firm. SNEF said 96% of employers with such workers plan built-in wage increases in 2026.

About 40% expect to give larger percentage increases to lower wage workers than to other staff, whilst 33% plan similar increments for all employees.

The SNEF survey covered around 240 employers representing more than 120,000 workers across 19 industries. Fieldwork was conducted from 25 June to 15 August 2025.