The Ministry of Manpower’s (MOM) advance release of the labour market statistics for the fourth quarter of 2024 paints a picture of resilience but with signs of slowing momentum. Total employment grew by 45,500 in 2024—a steep decline from the 78,800 added in 2023. Non-resident employment growth, which previously buoyed the labour market, slowed dramatically, with lower hiring in outward-oriented sectors such as Information & Communications and Insurance Services.
While resident employment rebounded, rising in high-skilled sectors like Professional Services and Financial Services, the pace of growth for both residents and non-residents in 4Q 2024 was noticeably sluggish. Employment growth in 4Q 2024 stood at 8,700, a sharp drop from 22,300 in the previous quarter. This deceleration reflects growing headwinds in Singapore’s labour market and global economic uncertainties.
Widening cracks in employment growth
The 2024 numbers reveal a key challenge: Singapore’s labour market is increasingly constrained by structural factors. Non-resident employment, which saw robust growth in 2023 due to a surge in Work Permit (WP) holders, moderated significantly in 2024. While Construction continued to hire WP holders, other sectors, particularly those exposed to global market dynamics, saw declines.
This shift underscores a troubling dependency on construction and lower-skilled roles to drive employment growth. Sectors requiring higher-skilled non-resident talent, such as Information & Communications, appear to be struggling to compete for manpower.
Even for residents, employment gains were concentrated in high-skilled sectors, suggesting limited opportunities in middle-skill industries. While seasonal hiring in Retail Trade provided a boost in the fourth quarter, it was not enough to counterbalance the overall slowdown.
Retrenchments highlight underlying pressures
The rise in retrenchments in 4Q 2024 to 3,600 from 3,050 in 3Q, while remaining within non-recession norms, points to emerging vulnerabilities. For the year, total retrenchments stood at 12,930, lower than 2023’s 14,590, but the increase in Q4 suggests businesses are grappling with restructuring needs and adapting to weaker external demand.
The incidence of retrenchment per 1,000 employees fell to 5.8 in 2024, from 6.7 in 2023, but this may not reflect the full picture. Business reorganisation and restructuring remained the leading causes of retrenchments, which highlights a need for continued vigilance as industries adjust to technological and economic shifts.
Unemployment: Stable but creeping up
Unemployment remained low in 2024, but slight increases in resident and citizen rates in 4Q 2024 signal a labour market that is beginning to tighten. Resident unemployment rose from 2.6% in September to 2.8% in October, and citizen unemployment increased from 2.7% to 2.9%. While stabilising in November and December, these upticks suggest labour demand may be softening in certain industries.
Annual unemployment rates in 2024 were broadly consistent with 2023 levels (overall: 2.0%; resident: 2.8%; citizen: 2.9%), but the marginal rise reflects increasing challenges in matching workers to job opportunities amid a slower growth environment.
Structural challenges and the road ahead
The slowdown in employment growth highlights Singapore’s long-term labour market challenges, including an ageing workforce, limited resident labour force expansion, and the need for workforce transformation. MOM has acknowledged that these constraints leave limited room for significant resident employment growth.
Employers are urged to maximise workforce productivity through upskilling and job redesign. MOM emphasised initiatives like the Job Transformation Maps and the Support for Job Redesign under the Productivity Solutions Grant (PSG-JR), but uptake and implementation across industries will need to accelerate to counterbalance stagnating growth.
Non-resident employment, once a key driver, is increasingly vulnerable to global economic pressures and sectoral shifts. Sectors requiring higher-skilled foreign workers may need more targeted policies to attract talent and maintain competitiveness.
Support needed for workers and businesses
MOM’s enhanced Career Conversion Programmes (CCPs), which provide greater salary support for mid-career workers, and the Overseas Markets Immersion Programme are critical in helping workers adapt to restructuring. However, given the pace of industry changes, more robust measures may be required to bridge skill gaps quickly.
At the business level, MOM’s surveys indicate positive signs, with 46% of employers planning to increase hiring in December 2024 (up from 43% in September) and 32% intending to raise wages. Yet these plans may face challenges if global uncertainties persist, pressuring profit margins and labour costs.
More detailed insights are expected in MOM’s full Labour Market Report, due for release in March 2025.
