Introduction

In a significant turn, Singapore's labor market has shown resilience in 2024, buoyed by robust economic growth and optimistic business outlooks. However, the final quarter of the year revealed emerging challenges, including a rise in quarterly retrenchments, casting a cloud over the future of employment as uncertainties loom on the global stage.

Employment Growth in 2024

According to the Ministry of Manpower (MOM), 2024 witnessed a net increase of 8,800 employed residents – encompassing both Singapore citizens and permanent residents – reversing a previous decline of 4,600 jobs in 2023. This statistic highlights the ongoing strength of the domestic job market, with Singapore citizens constituting approximately 85% of the resident workforce.

Job Market Dynamics

Despite this positive leap in employment numbers, the labor market remains competitive, as illustrated by the job vacancy ratio increasing to 1.64 per unemployed individual by December 2024, compared to 1.32 the previous September, albeit down from 1.76 a year earlier. The total number of job vacancies surged from 61,500 in September to 77,500 in December 2024.

Shift Towards Higher-Skilled Roles

Notably, around 70% of job openings were for higher-skilled roles typically filled by Singaporeans, such as financial analysts and software developers. MOM’s Director of Manpower Research and Statistics, Mr. Ang Boon Heng, emphasized that these positions indicate increasing opportunities for residents to access better-paying jobs.

Foreign Workforce Trends

The foreign workforce experienced growth as well, with an increase of 35,700 foreign workers in 2024, though this growth rate is less than half of the surge seen in 2023. Work permit holders, mainly covering blue-collar positions that residents are less inclined to accept, accounted for a significant portion of this growth. In contrast, the numbers of Employment Pass (EP) and S Pass holders declined, a factor attributed to more stringent qualifying criteria introduced under the Complementarity Assessment Framework (Compass).

Sector-Specific Employment Changes

Despite overall job creation, there were stark declines in certain lower-skilled sectors, notably in the food and beverage industry, which saw a reduction of 2,100 positions. In total, employment grew by 44,500 during 2024, significantly lower than the 78,800 jobs added in 2023.

Unemployment Trends

The unemployment rate remained low and stable, closing out 2024 at 1.9% overall, with 2.8% among residents and slightly higher at 2.9% among citizens. Long-term unemployment, defined as being jobless for over 25 weeks, steadied at 0.8%, indicating a balanced employment landscape.

Retrenchments and Challenges Ahead

While retrenchments decreased to 13,020 in 2024 from 14,590 in 2023, a quarterly analysis paints a different picture. The final quarter saw a worrying increase from 3,050 to 3,680 retrenchments, largely driven by the financial and insurance sectors as companies sought to cut costs amid rising expenditures.

Re-employment Trends

The report also highlighted evolving re-employment trends, with the rate of returning to work post-retrenchment slipping from 60.4% in Q3 to 58.1% in Q4. This decline could suggest a growing tendency for laid-off workers to take time for skill enhancement or seek more favorable job opportunities.

Outlook for 2025

Looking ahead to 2025, MOM anticipates continued labor market expansion, particularly in the first quarter. Companies reportedly plan to hire more employees and raise wages, reflecting positive employer sentiment. However, rising global trade tensions could stymie this optimistic forecast.

Conclusion

As Singapore navigates this evolving employment landscape, understanding the nuances of the labor market will be crucial for policymakers and job seekers alike. Will the economy adapt to these shifting tides, or are we on the brink of yet another employment crisis? Stay tuned!