SMEs in Singapore are scaling back their expansion plans but will still continue hiring, according to a recently released survey by the Singapore Business Federation. Ongoing macroeconomic tensions caused by the Sino-US trade war had already caused many businesses to lower their performance expectations for the second half of 2019, and this trend is projected to continue well into 2020.

Hiring expectations have improved, however. Based on the SBF-Experian Index, which measures the business sentiment of SMEs in Singapore for the next six months, SMEs across all sectors will see their hiring increase or at least remain unchanged in the first half of 2020. One possible cause is that hiring in all sectors plunged in the first half of 2019, which may have left many businesses shorthanded right now.

However, the poor outlook for business expansion and continuing slow economic growth--the Ministry of Trade and Industry has forecast GDP growth of 0.5-2.5 percent for 2020--suggests that job-seekers may not find many outstandingly attractive offers. Various studies from 2019 have already indicated that job-seekers’ expectations notwithstanding, many companies do not plan to offer salary increments as high as in previous years.

Instead, it is likely that SMEs will focus on the training and development of their workforce, and do their hiring with business transformation in mind--meaning that they may look for more future-ready capabilities such as digital skills, skills related to business transformation, or even specialized international experience to take advantage of new markets.

SBF CEO Ho Meng Kit cautioned SMEs not to pin their hopes on the trade war ending, and instead to work on upgrading, training, and transformation. “We urge our SMEs to continue to invest in business transformation efforts as well as the upskilling of their workers to boost productivity and strengthen their capabilities so they can be ready to ride on the recovery,” he said.

SMEs make up 99 percent of businesses in Singapore and account for approximately 72 percent of employment or 2.5 million workers, according to official statistics for 2018.