SINGAPORE, Jan 9 — Singapore’s labour market is expected to enter 2026 with cautious hiring and a stronger tilt towards contract roles despite steady economic growth in the past year.
According to a report by CNA, analysts said that employers are likely to prioritise selective, skills-based recruitment rather than broad expansion of headcount.
“Against this backdrop, hiring is likely to be selective, focused on roles and skills that support digitalisation and structural transformation,” said ManpowerGroup Singapore country manager Linda Teo.
Singapore’s economy expanded 4.8 per cent in 2025, but hiring sentiment remains tempered by geopolitical tensions, inflation and supply chain risks.
ManpowerGroup’s survey of about 500 employers showed a net employment outlook of 15 per cent for the first quarter of 2026, the weakest reading since early 2022.
Teo said many organisations are expected to maintain a core group of permanent staff while relying more on contract or freelance workers to manage costs and remain agile.
Robert Walters Singapore country manager Kirsty Poltock said employers are pairing permanent roles with more contract positions and project-based hiring.
Maybank Securities economist Brian Lee projected employment growth of about 60,000 jobs in 2026, similar to 2025, as the pace of economic expansion moderates.
Lee said labour demand should stay supported but added that employers remain cautious because of “lingering global trade and geopolitical uncertainties.”
DBS Bank senior economist Chua Han Teng expects the overall unemployment rate to edge up to 2.2 per cent in 2026 from a projected 2 per cent in 2025.
Chua said layoffs are likely to remain contained as firms adjust headcount gradually in areas where labour remains tight.
Recruitment experts expect wage growth to stay modest as companies continue to manage costs.
Chua said, “With revenues potentially coming under pressure, firms will probably choose to manage costs through downward wage flexibility and modest wage growth.”
Randstad Singapore country director David Blasco said employers are raising expectations for entry level roles as they shift routine tasks towards automation and prioritise higher value work.
Blasco said companies increasingly want junior hires who can contribute to innovation in a digital first environment.
Michael Page senior managing director Nilay Khandelwal said demand remains strong in sectors tied to growth and transformation, including AI linked manufacturing, finance, healthcare and critical infrastructure.
Official data showed that financial and insurance services and health and social services led resident employment growth in late 2025.
Vacancies for professionals, managers and executives (PMEs) remained high in information and communications, health and social services, and transportation and storage.
ManpowerGroup’s survey found the finance and insurance sector and the information sector had the strongest hiring intentions for early 2026.
Poltock expects high demand for talent in accounting and finance, banking and financial services, human resources, business support, sales and marketing, and technology and transformation.
She told CNA that AI adoption is moving from pilot phases to implementation, driving demand for workers who can balance automation with business needs.
Lee expects stronger hiring in services, particularly finance and hospitality, supported by the government’s S$5 billion (RM20.3 billion) Equity Market Development Programme.
He also anticipates continued hiring in construction because of a large project pipeline and in information and communications due to the AI boom.
Aon Asia Pacific talent advisory director Sara Tiew said the asset management industry will continue to seek talent in investment, client management, risk and compliance.
Tiew said digitalisation and AI adoption are fuelling demand for AI specialists, software engineers, cybersecurity professionals and data analysts.
Blasco said the digital economy remains a “powerhouse” for high value jobs, with strong demand for robotics and automation engineers, green finance specialists, sustainable investing roles and biomanufacturing technicians.
He said cybersecurity and enterprise software also remain priority areas.
Khandelwal said Singapore’s strengths in electronics, semiconductors and advanced manufacturing position it well for continued growth driven by AI server demand, chip production and precision manufacturing.
He added that healthcare and life sciences will continue to hire as ageing, biomanufacturing and precision medicine remain national priorities.
Persol Singapore managing director Foo See Yang said hiring will likely be weaker in export oriented manufacturing, traditional retail and general office support roles.
Foo said employers in these sectors are relying more on automation, shared services and contract staff, leading to fewer vacancies and more competition.
Poltock said consumer facing sectors such as traditional retail, parts of food and beverage and lifestyle services face high rental and manpower costs that limit headcount growth.
She said export oriented manufacturing may also see softer hiring as firms manage uneven global demand through automation rather than labour expansion.
Blasco said outward oriented sectors like general professional services and some technology areas are seeing eased employment because routine tasks are being automated or shifted to shared services.
Manpower Ministry data showed that top vacancies for PMEs in 2025 included teaching and training professionals, commercial and marketing sales executives and software and multimedia developers.
Khandelwal said jobseekers should expect longer hiring cycles, with some firms increasing interview rounds from three to as many as five.
He advised candidates to moderate salary expectations, noting that pay increases after job changes have stabilised at about 5 to 15 per cent.
Foo said workers are becoming more selective, with many choosing roles that offer skills growth, learning opportunities or better culture fit rather than higher pay.
Recruiters encouraged jobseekers to consider contract roles as a pathway to permanent employment.
Teo said project based or contract roles are becoming more common and can lead to permanent opportunities for strong performers.
Recruiters also urged candidates to build digital literacy, data analytics capabilities and AI related skills while strengthening soft skills such as adaptability, collaboration and problem solving.
Blasco said, “My best advice is to focus on what makes you uniquely human, so qualities like creativity, empathy, and critical judgment.”
He added that jobseekers should not be discouraged by job ads with “unrealistic” requirements, noting that many candidates feel the same way.
Blasco said candidates should highlight transferable skills and their ability to “unlearn and learn.”