New Trends 2024: Singapore sees wage growth, it’s slow hiring pace

Corporations and industries in Singapore have not allowed a weak economy from raising salaries for their employees. The coming year looks good as wage hikes are likely to continue. The last 12 months saw large companies and SMEs raising wages, with major businesses planning to continue this trend into 2024. 

However, hiring has stalled.  A survey by the Singapore Business Federation says there were no changes to employee headcount in the last 12 months. Around 53 percent of companies will not change the number of employees in the next year. But 36 percent are likely to increase their headcount. And around 19 percent of survey respondents reported a decrease in manpower in the last 12 months. 

Singapore Slow Economy

The drop in recruitment or hiring can be attributed to Singapore’s slow economic growth. According to Singapore’s Ministry of Trade and Industry, the manufacturing sector recorded a 7.3 percent decline year-on-year, worse than 5.4 percent contraction in the previous quarter. 

But 20 percent of companies, as per the survey, have seen growth in their workforce in the past 12 months. It includes retail, banking and finance, as well as food and beverages. The slight growth can be attributed to the 0.5 percent growth in Singapore’s economy on a year-on-year basis in Q2 of 2023. 

Headwinds Expected

Kok Ping Soon, CEO of SBF, said employment outlook is expected to be positive despite weakening business conditions. There will be headwinds, differentiated and sustainable wage growth. Risks remain in the economy because of the persistent inflation in developed countries. This could tighten global financial conditions, and result in a sharper retraction in global spending. Growth outlook for Singapore’s manufacturing sector remains quite weak. This is driven by the global electronics downturn. 

Furthermore, the external economic environment continues to hamper Singapore, thus tightness in its job market. Worse conditions are expected for the country’s information and communications, and professional services industry. Hotels, food and beverages, as well as the retail sector are expected to see a downturn.