Concerns Persist Over Higher Manpower Costs, Tighter Workforce Policies, and Limited Local Talent
According to the latest manpower and wage survey by the Singapore Business Federation (SBF), approximately 40% of businesses intend to expand their hiring in the next year, a notable increase from 29% last year. Despite this, only 27% of companies are optimistic about the domestic economy’s outlook for the same period. The survey revealed signs of growing confidence, but SBF’s CEO Kok Ping Soon cautioned that a significant portion of businesses remains uncertain about the future.
Meanwhile, 48% of respondents plan to maintain current staffing levels, reflecting caution in response to the current economic climate. Those who plan to reduce headcount dropped to 12%, down from 16% the previous year, largely due to economic uncertainty, reduced business activity, and cost management considerations.
Sectors such as logistics, transport, banking, and insurance showed greater optimism, while industries like hotels, restaurants, accommodations, and administrative support services expressed more pessimism. Small and medium-sized enterprises (SMEs) had a less optimistic outlook than large companies, with global and ASEAN business sentiment trending more neutral in 2024.
Concerns about rising manpower costs remained the top challenge for 75% of businesses, though this figure was down from 82% in 2023. Additionally, 61% of businesses reported issues with limited local talent, up sharply from 40% in the previous year. Work pass-related issues also continue to cause concern, with 53% of businesses worried about the impact of new foreign manpower policies.
In response to these challenges, businesses are increasingly focusing on local recruitment, outsourcing functions, and delaying expansion. While wage increases remain a common strategy, it is becoming less popular than in the past. Many companies are also offering flexible work arrangements and professional development opportunities to attract and retain local talent.
The survey, conducted between June 18 and July 16, 2024, gathered responses from 796 companies, of which 82% were SMEs and 18% were large enterprises. Despite these challenges, 71% of businesses have upskilled or reskilled their employees through various training methods in the past year, with a strong emphasis on digital economy skills.
Overall, businesses remain focused on maintaining their competitiveness while navigating the complexities of the current economic and labor market landscape.
