SINGAPORE – Most bosses here are facing mounting cost pressures due to an energy shock triggered by the Iran war, with some businesses starting to freeze hiring and trim benefits, according to a recent poll.
Conducted by the Singapore National Employers Federation (SNEF), the snap poll found that 96 per cent of the employers polled are facing higher operating costs, with energy prices driving up utilities, fuel, materials and freight costs.
Almost one in five or 19 per cent of them reported significant cost increases exceeding 25 per cent. Another 41 per cent reported a moderate hike of 11 to 25 per cent, while the rest reported a small hike of 1 to 10 per cent.
More than half of the respondents also flagged manpower costs as a key concern.
With the spike in utilities and fuel expenses, businesses here also have to grapple with higher costs for raw materials, supplies and logistics.
As the market adjusts to the more expensive operating environment, employers in the hospitality, food and beverage and retail sectors also face rising temporary labour costs.
However, most employers – 83 per cent of them – said they have not made any changes in terms of staffing or work arrangement.
Among those who have done so, many chose to defer hiring and expansion plans (67 per cent), redeploy or cross-train their staff (33 per cent), or reduce headcount through natural attrition (33 per cent). One in four also turned to cutting bonuses, allowances and benefits, while about one in five chose to reduce work hours.
“These are largely calibrated responses aimed at managing costs while preserving jobs,” SNEF said in its press release on April 20.
Many employers remain cautious, with 39 per cent of them having a negative outlook for the next six to 12 months.
Most of them said tax relief or financing assistance (83 per cent) would be the most useful form of support should energy prices remain high. They also called for energy cost relief and subsidies, and a delay in manpower policy changes that could raise costs further.
Under Budget 2026, bosses looking to hire foreign employees are expected to fork out more from 2027, with the minimum qualifying salaries for Employment Pass (EP) holders to rise from $5,600 to $6,000, and for S Pass holders, from $3,300 to $3,600.
SNEF chief executive Hao Shuo said: “As the global economic situation remains quite fluid, we hope that the Government will consider the prevailing economic conditions when implementing the earlier announced foreign manpower policy changes and also introduce a tiered level of support under the enhanced Progressive Wage Credit Scheme to help employers that are raising wages for their lower-wage workers.”
The SNEF poll, conducted between April 10 and 16, drew responses from 210 companies in the financial, manufacturing, services and construction sectors.
Most respondents – 153 of them – are small and medium-sized enterprises with fewer than 200 employees or an annual turnover of less than $100 million.
