Professionals in Singapore are setting their sights on modest salary increments for 2025, with nearly half anticipating a 2.5% to 5% raise, while about a third expect a more generous 6% to 10% increase, according to the latest data from HR services firm Hays.

However, despite these adjustments, a significant 52% feel their compensation fails to match their responsibilities – a trend that suggests lingering dissatisfaction with pay structures.

The 2025 Hays Asia Salary Guide reveals that salary increments in the past year were largely driven by individual performance rather than promotions or job changes. This highlights a shift in how companies reward talent.

Yet, economic uncertainty looms, with 35% of respondents expressing a pessimistic outlook on Singapore’s growth trajectory over the next two to five years.

Despite this cautious sentiment, businesses remain committed to expansion. Nearly half (46%) of companies plan to increase headcount in 2025, a notable rise in confidence amid ongoing concerns about talent shortages.

The hiring push is a response to the pressing need for critical skills, with 62% of organisations across Asia reporting moderate to severe skills deficits in 2024.

Japan and Thailand, in particular, have been hit hardest, with 71% of companies struggling to fill key roles.

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Talent retention is a growing concern

Employers in Singapore are also grappling with a talent exodus. More than half (57%) of professionals are either actively job hunting or planning to switch roles in 2025 – more than double the 20% who changed jobs in 2024.

This mirrors a wider trend across Asia, where 55% of professionals are seeking new opportunities, with Japan (66%), Malaysia (62%), and Thailand (61%) leading the charge.

The primary reasons for this exodus?

• Limited career progression (43%)
• Job security concerns (22%)
• Low salaries (15%)
• Lack of challenges (15%)
• Poor work-life balance (15%)

These findings suggest that professionals are increasingly prioritising growth and stability, placing pressure on employers to rethink their approach to career development and retention strategies.

Marc Burrage, managing director for Hays Asia, emphasised the need for proactive leadership: “Working professionals in Asia are more motivated than ever to find upward mobility in their careers. Leaders need to rethink their approach to leadership pipelines, upskilling programs, and internal mobility, ensuring they offer clear pathways to advancement that today’s workforce demands.”

To address retention woes, businesses are doubling down on career development initiatives, performance-based pay structures, and wellbeing programs.

Companies are also ramping up HR investments, with 32% prioritising employee retention and 27% focusing on talent acquisition to curb turnover and mitigate knowledge loss.

Hybrid work continues to shape life for most Singaporeans

Singapore continues to lead the way in flexible work arrangements, with 66% of professionals describing their workplace as hybrid – the highest rate in Asia. Japan follows closely at 61%, with Malaysia at 54%.

Although nearly half (49%) of companies still mandate a five-day office presence, a three-day in-office schedule has emerged as the preferred balance for both employers and employees.

Flexibility remains a top priority, with 60% of professionals citing it as a key benefit, and 54% considering it a critical component of an employer’s value proposition.

This preference for flexibility is translating into retention strategies, with 1 in 3 professionals in Singapore choosing to stay with their employer due to the availability of hybrid work.

Burrage reinforced this trend: “One in three professionals in Singapore chose to stay with their current employer due to the availability of hybrid work, underscoring the importance of flexible work arrangements for organisations aiming to enhance their attraction and retention strategies.”

Also Read: Wages in Malaysia on the rise as labour market gains ground

Will Singapore maintain its edge over countries vying for talent?

Businesses in Singapore face the dual challenge of addressing employee dissatisfaction while managing economic uncertainty. The coming year will test their ability to steer through cost efficiencies with competitive talent strategies.

Other countries, primarily in the west, are beginning to lean towards stricter return-to-office mandates, but Singapore’s firms are capitalising on flexible work as a competitive advantage.

With nearly half of employers planning to increase headcount and a renewed focus on skill development, organisations that invest in workforce stability, career growth, and hybrid work will be best positioned to attract and retain top talent in 2025 and beyond.