Singapore’s workforce in transition

[SINGAPORE] Amid global uncertainty, Singapore’s employers are betting on both stability and agility—but are they ready for the deeper shifts in skills, flexibility, and inclusion that define the future of work?

Singapore’s job market is sending mixed signals. While 42% of employers plan to grow their permanent headcount in H1 2025—a significant jump from 32% in late 2024—more than a third also say they’re increasing reliance on contract, part-time, and flexible hires. This dual strategy reflects a workforce in flux: companies are chasing growth and new skills, but also grappling with evolving expectations around work-life balance, AI adoption, and diversity. As businesses invest in long-term development and non-monetary perks, the real challenge is balancing stability with the agility demanded by a new generation of workers and a rapidly shifting economic landscape.

The Rise of the Flexible Workforce and Its Limits

The surge in flexible work arrangements is not just a response to employee demand—it’s a strategic move for businesses, especially SMEs, to stay nimble in uncertain times. The latest Jobstreet by SEEK report reveals that 31% of Singapore employers will rely more on contract, part-time, or flexible hires in 2025, up from just 15% in 2024. This mirrors broader trends: over 85% of companies now offer some form of flexible work arrangement (FWA), and the Ministry of Manpower has formalized the right to request FWAs in 2025.

Yet, this shift is not without friction. While FWAs have been shown to boost productivity by up to 35% and improve retention by 45%, they also introduce new complexities around performance management and team cohesion. Employers must navigate structured hybrid models, digital collaboration tools, and clear guidelines for remote and gig workers. The result is a workforce that is more adaptable but also more fragmented—a challenge for companies that still need stable, cohesive teams to drive core business objectives.

AI, Skills, and the Human Touch in Recruitment

AI is reshaping how Singapore’s employers find and retain talent. Over half (54%) of companies now consider AI knowledge in hiring, and 19% see it as a primary requirement. The government’s S$150 million investment in AI, aimed at tripling the local AI talent pool by 2028, underscores the strategic importance of these skills. Yet, only 15% of businesses have actually used AI tools in recruitment, with concerns about losing the human touch (44%) and lack of access or expertise (40%) holding many back.

This hesitance highlights a deeper tension. As demand for digital, AI, and cybersecurity skills skyrockets—especially in tech, finance, and healthcare—companies are struggling to bridge the skills gap. The solution, for many, is to invest in upskilling and reskilling programs. In 2025, more employers are expanding access to training, mentoring, and job rotation, recognizing that long-term career development is key to retention. The lesson is clear: while AI can streamline processes, the human element—mentorship, personalization, and trust—remains essential for building a resilient, future-ready workforce.

The Elusive Promise of Diversity, Equity, and Inclusion

Despite the buzz around DEI, progress in Singapore remains uneven. Only 40% of companies have adopted formal DEI initiatives, and a quarter have no plans to do so, citing a lack of regulatory push, unclear ROI, and limited access to best practices. This is at odds with the expectations of younger workers: 62% of Gen Z would turn down a job offer if a company isn’t making DEI efforts, while Gen X is far less influenced by these factors.

The gap reflects a broader challenge. While some sectors—notably tech, healthcare, and finance—are making strides in embedding DEI into their core values, many others treat it as a box-ticking exercise or a response to external pressure. The business case for DEI is strong: diverse teams drive innovation and better decision-making, and inclusive workplaces attract top talent. Yet, without clear metrics, leadership commitment, and integration into business strategy, DEI risks becoming another corporate fad rather than a transformative force.

What We Think

Singapore’s job market is at a crossroads. On one hand, employers are doubling down on permanent hires and long-term development, betting on stability and loyalty. On the other, they’re embracing flexibility, AI, and new ways of working to stay competitive and attract a new generation of talent. The real test will be whether companies can reconcile these seemingly contradictory strategies—building cohesive, inclusive teams while staying agile and digitally fluent.

The data is clear: flexibility and skills are now table stakes, but the human touch—mentorship, trust, and genuine inclusion—remains the ultimate differentiator. Companies that invest in both will not only survive but thrive in Singapore’s next chapter of work. Those that cling to old models or pay lip service to DEI will find themselves struggling to attract and retain the talent they need to succeed. The future belongs to those who can balance stability with agility, technology with humanity, and diversity with genuine inclusion.