Singapore Firms Plan Wage Freezes Amid Economic Uncertainty
Singapore businesses show increasing caution with 41% planning wage freezes in the next year, up from 35%, while maintaining support for lower-wage workers amid economic uncertainty.
Singapore's central business district skyline reflects growing economic uncertainty as more firms plan wage freezes
SINGAPORE - A significant increase in Singapore companies planning wage freezes signals growing economic caution, according to the Singapore Business Federation's National Business Survey 2025. The study reveals 41% of firms will freeze wages in the next 12 months, up from 35% last year, reflecting broader regional economic challenges similar to those highlighted by global economic experts.
Shifting Business Sentiment and Wage Trends
The survey indicates a decline in companies planning salary increases, dropping to 59% from 64% last year. However, maintaining their commitment to social responsibility, two-thirds of firms still intend to raise wages for lower-income workers, demonstrating Singapore's balanced approach to corporate leadership and sustainable business practices.
Key Survey Findings:
- Business sentiment index fell from 56.5 to 55.4 in Q2 2025
- 35% of companies expect worsening conditions
- Only 14% anticipate improvement
- Full-time workforce expansion plans decreased to 36% from 40%
Industry-Specific Impacts
The hospitality sector faces particular challenges, with its hiring outlook dropping dramatically from 67.4 to 51.6 in Q2. This trend could impact Singapore's tourism sector, which has been actively working on expanding regional connectivity and tourism opportunities.
Skills Development and Workforce Transformation
A concerning trend shows companies struggling with staff training nearly doubled to 47% this year, while only 18% have adopted skills-first hiring approaches. This challenge comes as Singapore's tech sector continues to evolve, with innovative startups revolutionizing various industries.
Policy Impact and Adaptation
The removal of maximum employment periods for work permit holders has been well-received, though concerns persist about rising S Pass qualifying salaries. Companies are responding through local hiring initiatives, wage adjustments, and outsourcing strategies.
Wei-Ling Tan
Tech and economy specialist, covering innovation in Southeast Asia from Singapore for both English-language and regional media outlets.