Singapore employers face talent crisis; 66% fear skill shortage, 38% battle for top talent in 2025

SINGAPORE: As 2024 comes to an end, Lion City employers are increasingly worried about a growing talent shortage, with 66% expressing concerns over the lack of candidates with the required skills, according to a Randstad Singapore report published by the Singapore Business Review.

Additionally, a fierce market competition for talent is weighing heavily on businesses, with 38% of employers acknowledging the need to bid for skilled professionals.

Other challenges facing employers include the inability to meet salary expectations (36%), attracting enough applicants (21%), and lacking the internal capabilities to acquire talent effectively (19%).

Another 17% of employers struggle with assessing employees’ soft skills and potential.

Another Randstad survey of over 300 professionals and companies in Singapore, conducted in September 2024, revealed key insights into the country’s manpower landscape and offered HR leaders critical information for 2025.

Among the most notable findings are concerns about salary expectations, staff retention, and the rise of flexible work arrangements.

Salary, bonuses, and flexibility

While salary remains a top priority, flexible working arrangements are emerging as highly valued benefits among Singapore’s workforce.

According to the survey, 76% of professionals consider a bonus scheme essential, while 70% prioritize flexible working hours. Other sought-after perks include remote work options, extended health insurance, and training opportunities.

Employers have responded by offering competitive benefits, including bonus schemes (83%), training and development (66%), flexible working hours (63%), and family/personal leave (63%).

The rise of HR business partners

The HR function has faced significant challenges in 2024, as roles have expanded without a corresponding increase in resources. AI and HR technology have also reshaped the landscape, and professionals prioritise job security in uncertain times.

The most sought-after HR roles for 2025 include Total Rewards Specialists, HR Business Partners with hands-on experience, and professionals skilled in managing offshore teams and remote employee engagement.

Modest salary increments for job movers and stayers

Job movers can expect salary increases of 12%-15%, with a potential boost of up to 20% for those entering sectors like AI or data.

On the other hand, employees staying in their current positions are likely to see a modest increase of 2%-5%, largely driven by inflation. Interestingly, 53% of employees remain uncertain about receiving a salary increment.

For employers, managing salary expectations remains a top challenge. Among the hiring difficulties cited, 58% of companies reported that salary expectations were too high, 56% highlighted a lack of industry experience, and 33% faced a shortage of applicants.

Tech and transformation skills continue to dominate demand

As businesses continue to face challenges in attracting and retaining talent with specialized skills, tech and transformation roles remain in high demand.

Skills in emerging technologies, AI, cybersecurity, software engineering, and digital transformation are crucial.

In 2025, companies will prioritize talent who can leverage data to optimize processes and enhance customer experiences, particularly those skilled in AI and machine learning.

For flexibility, tech contracts are expected to become a popular alternative for building a dynamic workforce that supports permanent operations.

With talent scarcity and market competition intensifying, 2025 promises to be a year of significant shifts in Singapore’s workforce landscape, making it crucial for HR leaders to adapt quickly and strategically.