SINGAPORE – As we close the curtain on 2024, Singapore’s labour market tells a story of resilience and transformation. Despite headwinds, the employment landscape has shown robust growth, particularly in higher-skilled sectors.

The Ministry of Manpower’s Q3 data reveals a tight labour market, though some pressures are easing. Job vacancies fell to 63,400 in September from 81,200 in June, marking a steady decline from the peak of 124,400 in March 2022.

Yet, there are still more job openings than unemployed individuals, with 1.39 vacancies for every job seeker, a drop from 1.67 in June. This ratio reflects a market where demand still outpaces supply, albeit with a gradual shift towards pre-pandemic norms.

For HR leaders, this signals a need to recalibrate recruitment strategies. The festive season might add a temporary boost to labour demand, but the broader trend points to a stabilising job market.

Filling the gaps: local vs foreign talent

Post-pandemic adjustments have seen employers tapping into a more balanced workforce. The return of foreign workers has played a pivotal role in sectors like construction and manufacturing, where local interest remains low.

Maybank’s economist Brian Lee noted that many roles filled by work permit holders are the ones that locals are unwilling to take up, underscoring the continued importance of a complementary foreign workforce.

Resident employment, on the other hand, has surged in higher-skilled, higher-paying sectors. Sectors such as information and communications, financial services, and professional services added 4,000 resident jobs in Q3, reversing a slight dip in the previous quarter.

Over the past decade, for every increase in S Pass or Employment Pass holders, 10 PMET roles have been created for locals – a sign of growing opportunities for Singaporeans.

Non-resident employment grew modestly in Q3, driven by hiring work permit holders in construction and manufacturing. Simultaneously, employment among higher-skilled pass types stabilised after earlier declines. Policies such as the Complementarity Assessment Framework and higher qualifying salaries for foreign workers are encouraging employers to prioritise workforce quality over quantity.

HR leaders in growth industries – such as financial services, professional services, and information and communications – must continue to focus on attracting top-tier talent while leveraging the government’s support for upskilling local workers.

Also Read: Singapore laws redefining work in 2024-25

Retention: a silver lining?

Retention rates have improved, with resignation rates falling from 1.7% in 2022 to 1.3% in Q3 2024. This trend suggests greater workforce stability, possibly due to employers better aligning roles with employee expectations and filling vacancies more effectively.

For HR leaders, the emphasis should be on building an engaging employee experience to sustain this positive trajectory.

Challenges on the horizon

External economic uncertainties – including geopolitical tensions and potential trade disruptions – loom large. Employers may adopt a “wait-and-see” approach, exercising caution in hiring and wage increments. However, the tight labour market could delay monetary policy easing, keeping interest rates stable.

Retrenchments, while down slightly to 3,050 in Q3, remain a concern for PMETs and degree holders, who face higher risks. Encouragingly, the proportion of retrenched workers finding new roles within six months rose to 60.4%. This figure reflects strong demand for skilled professionals.

Also Read: Why Singapore is raising salary benchmarks for Employment Pass

The close of 2024: key takeaways for HR leaders

Adapt recruitment strategies. Focus on balancing local and foreign talent while addressing industry-specific gaps.

Prioritise retention. Invest in employee engagement and career development to maintain workforce stability.

Plan for uncertainty. Prepare for potential economic headwinds by maintaining a flexible workforce strategy.

Leverage policy changes. Align workforce planning with government initiatives to enhance the quality of hires.

Singapore’s labour market in 2024 is a delicate dance between demand and supply, with HR leaders playing the role of strategists. By staying agile and proactive, they can ensure their organisations are poised to thrive, even amidst uncertainties.

As the saying goes, “Forewarned is forearmed” – understanding the talent landscape is the first step towards success.