Rising manpower costs remain employers’ top manpower challenge.

More than half of employers in Singapore (51%) plan to implement wage moderation or a wage freeze in 2027, up from 48% in 2026, according to The Singapore National Employers Federation (SNEF)’s Survey on Wage and Employment Outlook 2026/2027.

The findings point to continued caution in employers’ wage outlook, particularly amongst small and medium-sized enterprises, even as business expectations show signs of improvement.

The proportion of employers expecting uncertain business prospects in 2027 fell to 63% from 72% in 2026.

At the same time, 65% of companies expect to perform well in 2026, compared with 63% in 2025.

On hiring, 54% of employers said they are not planning to increase headcount, whilst 40% intend to hire more workers. The remaining 6% plan to reduce headcount.

Amongst companies employing lower-wage workers, 86% said they remain committed to providing built-in wage increases in 2027, down from 96% in 2026.

The remaining 14% plan a wage freeze, whilst none of the employers surveyed intends to implement wage cuts in 2027.

Rising costs remained the top manpower challenge, cited by 83% of employers in 2026, up from 79% in 2025.

Concerns over the rising cost of upskilling and reskilling workers also increased to 30% from 23%.

However, labour market tightness eased compared with a year earlier.

The proportion of employers reporting difficulties in attracting and retaining professionals, managers, executives and technicians (PMETs) fell to 41% from 47%, whilst those citing a shortage of local high-skilled talent declined to 35% from 42%.

Despite easing labour market pressures, attracting suitable talent remained employers’ top human resources priority at 59%.

More employers also identified the exploration, adoption, and enhancement of artificial intelligence as a priority, rising to 48% in 2027 from 39% in 2026, alongside efforts to upskill and reskill employees.

The survey was conducted between June and August 2026 and gathered responses from more than 300 companies employing close to 160,000 workers across 20 industries, representing a mix of small, medium-sized and large enterprises.