Labour market steady in 2025 despite skills, AI gaps

Hiring agencies and upskilling are critical to bridging talent gaps.

The city-state’s labour market remained stable in 2025 despite shifting hiring priorities, according to a study by Reeracoen and Rakuten Insight.

A total of 375 local hiring managers were surveyed regarding attitudes towards unemployment, re-entry, and job readiness.

The report found that only 23.2% of surveyed hiring managers said they are very confident in finding qualified local talent, citing salary expectations, skills mismatch, and a lack of experienced candidates as key concerns affecting hiring confidence.

Sixty-three percent expressed reservations about candidates unemployed for over three months, although recent training, strong experience, clear motivation, and industry referrals increased the likelihood of a jobseeker being considered.

Upskilling was highlighted as a key factor, with Digital/AI skills topping the list at 68.6%, followed by project management, data analytics and financial literacy, vocational/technical certifications, and leadership and communication skills.

This underscores the importance of proof of training, with 76.6% of respondents stating that showing evidence of upskilling is important or critical in a job application.

The report also cited hard-to-fill roles due to high demand, including tech engineers, sales and business development, logistics, skilled trades, and planners.

Recruitment agencies were recognised for their role not only in placements, but also in accelerating hiring, reducing mismatch, and providing salary benchmarks.

Surveyed employers advised jobseekers to stay active, upskill, network, tailor applications, and honestly explain any employment gaps.

Despite employers’ caution amidst AI disruption and cost-control measures, agencies, skills programmes, and proactive jobseekers are key to bridging the gap between available talent and hiring needs.

The study recommends that jobseekers upskill, build a visible digital footprint, and consider contract roles as bridges, whilst employers should reframe bias filters, reward re-entry motivation, and use agencies to uncover overlooked talent.

Policymakers are also encouraged to incentivise re-entry placements and link SkillsFuture programmes with real hiring pipelines.

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