More Singapore residents are landing higher-skilled, better-paying jobs: MoM

Singapore’s labour market saw steady expansion in 2024, with more residents securing jobs in higher-skilled industries, even as employment in lower-skilled sectors declined.

However, economic uncertainties and global trade tensions loom over 2025, posing potential challenges to continued growth.

Employment gains in high-skilled sectors

Resident employment grew by 8,800 in 2024, reversing a decline of 4,600 in 2023, according to the latest report of the Ministry of Manpower (MoM).

The bulk of these gains came from higher-skilled sectors, with notable increases in financial and insurance services (+5,300), health and social work (+5,200), professional services (+5,000), and information and communications (+4,200).

Conversely, employment in lower-skilled sectors contracted. The food and beverage industry saw a drop of 2,100 resident workers, while administrative and support services shrank by 700 roles.

This shift underscores Singapore’s ongoing transition towards a knowledge-based economy, where demand is growing for specialised skills in technology, finance, and healthcare.

Citizens form approximately 85% of the resident workforce, with permanent residents making up the remainder.

Job vacancies and employer confidence

The labour market remained tight in late 2024, with 1.64 job vacancies per unemployed person in December, up from 1.32 in September. Employers posted 77,500 job openings by the end of the year, a sharp rise from 61,500 in the previous quarter.

About 70% of these vacancies were in roles typically filled by residents, such as financial analysts, investment advisers, software developers, systems analysts, accountants, business development managers, and management consultants.

Ang Boon Heng, MoM’s director of manpower research and statistics department, said this trend suggests residents are increasingly taking on higher-skilled, better-paying jobs.

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Wage hikes and hiring plans on the rise

Businesses have reportedly remained optimistic about the labour market heading into 2025. According to MoM surveys, the proportion of firms planning to increase wages in the next three months doubled from 15.6% in September to 31.6% in December.

Similarly, the share of companies intending to expand their workforce rose from 43.2% to 46.3% over the same period.

“More companies have told us they are expanding their manpower; more companies are saying that they want to raise the wages of their employees,” Ang said.

This hiring momentum reflects employers’ confidence. However, external risks – such as escalating trade tensions – could cloud the outlook.

Slowdown in growth of foreign workforce

While non-resident employment continued to expand, the pace slowed significantly. In 2024, the number of foreign workers grew by 35,700 – less than half the 83,500 increase seen in 2023.

Most of this growth came from work permit holders, who typically fill blue-collar jobs that residents are less likely to take. Meanwhile, the number of Employment Pass (EP) and S Pass holders remained stable after significant increases in the previous two years.

MoM attributed this stabilisation to firms adjusting to the Complementarity Assessment Framework (COMPASS) and higher qualifying salary requirements.

COMPASS, which was introduced in September 2023, is a points-based system used to evaluate new EP applications and applies to renewals from September 2024 onwards.

Unemployment low, retrenchments rise in Q4

Singapore’s unemployment rate remained stable in December 2024, standing at 1.9% overall, 2.8% for residents, and 2.9% for citizens. The long-term unemployment rate (those jobless for at least 25 weeks) also held steady at 0.8%.

Retrenchments fell year-on-year, with 13,020 job losses in 2024 compared to 14,590 in 2023. However, on a quarterly basis, layoffs increased from 3,050 in Q3 to 3,680 in Q4.

This uptick was primarily driven by financial and insurance services, where retrenchments rose from 270 to 620, largely due to cost pressures.

Despite this, Ang clarified that these layoffs were not widespread but rather “pockets of retrenchments” affecting specific firms.

The number of employees placed on a short work week or temporary layoff also rose to 660 in Q4, though MoM noted this figure remained within pre-pandemic levels (below 1,000).

Also Read: Jobless Singaporeans to receive government support but there's a catch

Slower job re-entry rates

The rate of re-entry into employment within six months of retrenchment dipped slightly, from 60.4% in Q3 to 58.1% in Q4.

Ang suggested this may be due to workers taking longer to re-enter the job market, either for skills upgrading or to hold out for better-paying opportunities. Based on past data, re-employment rates improve significantly after 12 months.

While the rise in retrenchments – alongside increased vacancies – could point to some skills mismatches, Ang cautioned against jumping to conclusions.

“I’m not saying there is no problem,” he said. “[But] we need to study carefully the group of people who cannot find employment.”

Cautious optimism amid global risks in 2025

MoM expects the labour market to continue expanding in early 2025, supported by employer hiring plans and wage increases.

However, economic growth is forecast to slow to 1% to 3% due to ongoing global trade frictions and potential disruptions to the disinflation process.

MoM warned that, if trade tensions escalate, “labour market performance may soften notwithstanding labour market tightness”.

Job vacancies remain a forward-looking indicator of employer sentiment, and their increase suggests firms are still keen to hire. But whether these vacancies translate into sustained employment gains hinges upon macroeconomic conditions.

Businesses and policymakers will likely have to balance workforce expansion with efforts to address potential skills mismatches and external economic headwinds.