Nearly half of companies in Singapore have plans to hire in the first quarter of 2024, while almost a third of firms plan to increase wages in the same period.

According to the Ministry of Manpower (MOM) in its latest labour market report on Mar. 14, 47.7 per cent of firms surveyed in December 2023 have plans to hire over the first quarter of 2024.

This is an increase of about five per cent from 42.8 per cent in September 2023.

Meanwhile, the proportion of firms intending to raise wages in the first three months of 2024 increased from 18 per cent in September 2023 to 32.6 per cent in December 2023.

MOM said it expects labour demand to strengthen in line with the forecast of improved economic growth prospects for 2024.

Retrenchments in 2023 were more than double the record low in 2022

As for retrenchments, MOM said there were 14,590 retrenchments in 2023, which was more than double the record low seen in 2022, which had 6,440 retrenchments.

This number is similar to pre-pandemic levels from 2015 to 2019 however, where each year averaged around 14,180 retrenchments.

The top reason for retrenchments in 2023 was business restructuring.

"Retrenchments rose and re-entry outcomes declined as global economic headwinds impacted Singapore’s economy in 2023. Going forward, firms may continue reorganisation or restructuring efforts as downside risks in the global economy remain," MOM said.

The ministry added that the increase in retrenchments was observed across all socio-demographic groups, as well as across industries and occupations, mostly according to pre-pandemic norms.

Most of the retrenchments for 2023 occurred in outward-oriented services sectors such as wholesale trade, information and communications, professional services, financial services, and electronic manufacturing.

This is a reflection of their exposure to global economic headwinds, MOM said.

Retrenchments remained low in other sectors.

Number of job vacancies went up for December 2023

Conversely, the number of job vacancies increased in December 2023 from September 2023, after six consecutive quarters of decline from its peak of 124,400 in March 2022.

There were 79,800 registered vacancies in December, compared to 78,200 in September.

Over the last quarter of 2023, the number of job vacancies for higher-paying sectors such as financial and insurance services increased from 5,100 to 7,200, while the number of vacancies for professional services increased from 5,600 to 6,200.

As for the information and communications sector, it saw a decline in job vacancies from 7,100 to 6,300, although this figure is still higher than the pre-pandemic level. From 2015 to 2019, there was an average of 3,400 job vacancies in December of each year.

MOM added that for 2023, about 63.7 per cent of residents who lost their jobs found a new one within six months.

"While retrenchments may edge up in 2024, we expect majority of retrenched residents to re-enter employment within six months as job vacancies remain available and forward-looking indicators suggest improved hiring expectations among employers," MOM added.

Employment grew by 88,400

Total employment grew by 88,400 in 2023.

Given the low resident unemployment rate, this increase was largely driven by the hiring of 83,500 non-residents in 2023, especially in construction and manufacturing, MOM said.

The remaining growth came from 4,900 residents getting employed in higher-paying sectors such as finance and professional services, according to MOM.

Within the fourth quarter of 2023, total employment increased by around 7,500.

Resident employment growth during this quarter, at about 400, was seen in sectors which typically engage in year-end seasonal hiring such as retail trade, food and beverage services, and arts, entertainment and recreation.

Non-residents contributed to the rest of the quarter's employment growth, with nearly one in three being employed in the construction sector.

As for the unemployment rate, it remained "stable and low" in December 2023, at two per cent overall, 2.8 per cent for residents (both Singapore citizens and Permanent Residents), and 2.9 per cent for citizens.

Overall, the seasonally adjusted resident long-term unemployment rate in December 2023 remained at the same level of 0.7 per cent as in September 2023.

Top photo via Karl Anthony Paica/Unsplash