More Singapore businesses to freeze wages in the next 12 months amid economic uncertainty

SINGAPORE: As economic uncertainty weighs on business confidence and hiring plans, more Singapore firms are planning to freeze wages in the next 12 months (41%), compared to just 35% last year, Singapore Business Review reported, citing the Singapore Business Federation’s National Business Survey 2025 – Manpower and Wages Edition.

The survey found that only 59% of companies said they plan to increase salaries, down from 64% last year. However, two in three firms still intend to raise pay for lower-wage workers.

The overall business sentiment index (BSI) fell from 56.5 in the first quarter of 2025 to 55.4 in the second quarter of the year. At the same time, at least 35% of companies said they expect conditions to worsen over the next year, while only 14% expect things to improve.

In terms of hiring, only 36% of firms said they will expand their full-time workforce, compared to 40% last year. The sharpest drop is in hospitality, where the hiring outlook tumbled from 67.4 in Q1 to 51.6 in Q2.

Accommodation, administrative support, hotels, restaurants, and IT services are among the most pessimistic, while those in education and health and social services remain more positive.

While concerns about US tariffs have eased from 81% in April, 59% of firms still see them as negative amid trade uncertainty and margin pressures.

In addition, companies having difficulty in training their staff nearly doubled this year, from 25% in 2024 to 47% this year. Notably, only 18% of firms are adopting skills-first hiring.

Meanwhile, many firms welcomed the removal of the maximum employment period for work permit holders. They remained concerned, however, about rising S Pass qualifying salaries, prompting them to hire locals, raise wages, or outsource.

About one in three businesses have also adopted career planning or job redesign, which they said helped improve staff morale, workforce planning, and retention. /TISG

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