Four in ten Singapore firms plan wage freezes as outlook weakens

At least 35% of companies expect conditions to worsen next year.

About 41% Singapore businesses plan to freeze wages in the next 12 months, up from 35% last year, as economic uncertainty weighs down confidence and hiring plans, according to the Singapore Business Federation’s (SBF) National Business Survey 2025 – Manpower and Wages Edition.

Fewer companies intend to raise salaries, with 59% planning increases compared to 64% last year. The only exception is for lower-wage workers, with two in three firms still planning to increase their pay.

The overall business sentiment index (BSI) dipped 1.1 points from 56.5 in Q1 2025 to 55.4 in Q2 2025.

At least 35% of companies expect conditions to worsen in the year ahead, while only 14% see improvement.

Many are holding back on hiring, with just 36% planning to expand their full-time workforce, compared to 40% in 2024.

The downturn is most evident in the hospitality sector, where the hiring outlook dropped sharply from 67.4 in Q1 to 51.6 in Q2.

Companies in hotels, restaurants & accommodations, administrative & support services, and IT-related services are the most pessimistic, whilst the health & social services and education sectors remain relatively more upbeat.

Although concerns over U.S. tariffs have eased, about 59% of firms still see them as negative, down from 81% in April—trade uncertainty and margin pressures continue to weigh on business confidence.

Beyond wage freezes, rising manpower costs and the growing challenge of upskilling staff are key concerns.

Nearly half of businesses (47%) now cite difficulties in training, almost double the 25% in 2024. Adoption of skills-first hiring remains limited, with only 18% of firms fully embracing it.

On foreign manpower, businesses welcomed the removal of the maximum employment period for work permit holders but expressed concern over higher S Pass qualifying salaries, which are prompting firms to hire more locals, raise wages, or outsource.

Around a third of companies reported adopting career planning or job redesign initiatives over the past year, with many seeing better morale, stronger workforce planning, and higher retention.