Singapore's labour market added 11,400 jobs in the second quarter of 2026, the 19th consecutive quarterly gain, according to the Ministry of Manpower's Labour Market Report for the second quarter, released on 21 September 2026. Unemployment held at 1.9%, while MOM also recorded slower resident job growth, fewer job vacancies and a higher number of retrenchments than in the first quarter.
Foreign Work Permit holders accounted for most of the quarter's job growth, with 9,200 of the 11,400 jobs going to non-residents. Resident employment rose by 2,200, vacancies declined from 73,300 to 68,600, and retrenchments increased from 3,830 to 4,620. Taken together, the figures describe a labour market that remains tight but is showing early signs of softening, which has implications for hiring budgets, retention plans and payroll cost forecasts.
This article summarises the report's main findings in plain language and outlines what they mean for company owners, founders and employers in Singapore over the coming six months.
Key Takeaways
MOM's Q2 2026 report shows a labour market that is still growing but softening in places. Employment rose by 11,400, unemployment stayed low at 1.9%, vacancies fell to 68,600, and retrenchments climbed to 4,620, the highest figure among the last five quarters shown.
The table below summarises the main indicators in terms employers can use.
Two terms appear often in the report. PMETs are Professionals, Managers, Executives and Technicians, the white-collar roles that most office-based companies hire for. Retrenchment is the termination of an employee because the employer no longer needs the role, as distinct from dismissal for conduct or performance.
The economic backdrop is supportive. According to the same report, GDP grew 5.9% year-on-year in the second quarter, easing from 6.3% in the first quarter. Strong growth alongside softer hiring is the combination that makes Q2 worth reading closely.
Of the 11,400 jobs added, 9,200 went to non-residents, mainly Work Permit holders in Construction and Manufacturing. Resident employment added only 2,200 jobs, led by Transportation & Storage, Public Administration & Education, and Health & Social Services, with smaller gains in Professional Services, Financial Services and Information & Communications.
MOM also reports an Employment Diffusion Index of 49.0, a measure of how widely job growth is spread across industries. A reading of 50 means as many sectors are expanding as contracting, so 49.0 means growth is concentrated rather than broad. Wholesale and Retail Trade, for example, lost 2,300 jobs in the quarter.
For founders, the practical point is that the sectors adding workers are not the sectors most office-based start-ups operate in. A technology, consulting or trading company is more likely to face a quiet hiring environment, with slower recruitment and more available talent, than a construction or manufacturing firm competing for permit holders.
Employers hiring foreign talent should also budget ahead. MOM announced at the Committee of Supply on 3 March 2026 that the Employment Pass qualifying salary rises from S$5,600 to S$6,000 for most sectors from 1 January 2027. The cost comparison of local and foreign payroll shows how CPF, the Foreign Worker Levy and the Skills Development Levy apply differently to each type of hire.
Job vacancies fell from 73,300 in March to 68,600 in June, and were also below the 76,200 recorded a year earlier. PMET vacancies dropped from 43,000 to 39,300, with Financial Services (5,800 to 4,500) and Information & Communications (5,300 to 4,400) recording the largest falls. Entry-level PMET vacancies stood at 31,700 in June, about 45.3% of all vacancies, which shows that graduate-level hiring is still where most open roles sit.
Retrenchments moved in the opposite direction. MOM recorded 4,620 retrenchments in Q2, equal to 2.0 per 1,000 employees, up from 1.6 in Q1. Business restructuring was the main reason, cited in 72.1% of cases.
The rise in retrenchments matters most because of what happens afterwards. Only 54.9% of retrenched residents were back in work within six months, down from 60.7%. Degree holders (49.9%) and residents aged 50 to 59 (41.9%) fared worst. Resident PMETs recorded the sharpest rise by occupation, from 2.6 to 3.2 retrenched per 1,000 employees.
Companies restructuring for the first time often treat retrenchment as an HR matter alone, yet it carries a statutory filing. Employers with at least 10 employees must notify MOM within five working days after affected employees are told, and the mandatory retrenchment notification rules apply even to small exercises. Missing the filing creates avoidable compliance exposure at a time when management attention is already stretched.
For a business still hiring, the same data presents an opportunity. A larger pool of experienced professionals, particularly in finance and technology, is now looking for work, and vacancies per unemployed person at 1.48 show that competition for talent has eased only slightly rather than disappeared.
MOM's July business expectations poll gives a mixed answer. The share of firms planning to hire in the next three months rose from 43.9% in June to 48.7% in July. The share planning to raise wages eased from 29.3% to 27.9%, mainly in Financial Services and Wholesale & Retail Trade. Both measures remain below their February 2026 levels.
The report does not publish wage growth figures, so the safest reading is about intentions rather than outcomes. Fewer firms expect to raise pay, and the monthly recruitment rate fell from 1.6% to 1.4% while the resignation rate held at 1.0%. In simple terms, employers are hiring less and employees are moving less.
That pattern has a direct payroll consequence. Staff who stay put are likely to stay longer, so retention costs and benefits matter more than headline salary offers. Our earlier analysis of why benefits now influence talent decisions remains relevant here, and employers preparing for new statutory leave changes can review the payroll and leave system checklist for expanded childcare leave.
A cautious but still-tight market rewards employers who plan early. The following sequence suits most SMEs and founder-led companies.
Step 1: Review your headcount and work pass mix. List every employee by status (Citizen, Permanent Resident, Employment Pass, S Pass, Work Permit) and confirm renewal dates. Renewals of passes expiring from 1 January 2028 face the higher Employment Pass threshold, and the overview of work passes for foreign professionals helps match roles to pass types.
Step 2: Recalculate your payroll budget. Include CPF, levies, the Skills Development Levy and any announced salary threshold changes. Model both a hiring scenario and a hiring freeze so that cost forecasts survive a change in direction.
Step 3: Plan for older and mid-career staff. MOM notes that workers in their 50s face the highest retrenchment incidence (3.6 per 1,000) and the lowest re-entry rate. Retaining, retraining or redeploying experienced employees is usually cheaper than replacing them, and the Career Conversion Programme guide explains how subsidised retraining works.
Step 4: Use available grants before committing to restructuring. The Workforce Development Grant (Job Redesign+) now funds up to 70% of qualifying costs for SMEs, capped at S$150,000 per enterprise, according to the MOM factsheet on the Enterprise Workforce Transformation Package. The company must be registered and operating in Singapore and employ at least three local employees.
Yes, although it has eased slightly. MOM reports 1.48 job vacancies for every unemployed person in June 2026, so there are still more openings than job seekers. Unemployment is 1.9% overall and 2.9% for residents, both low by historical standards.
Retrenchments rose from 3,830 in Q1 2026 to 4,620 in Q2, concentrated in Manufacturing, Information & Communications and Financial Services. The level is still modest relative to the workforce at 2.0 per 1,000 employees, but the trend and slower re-employment deserve attention.
Yes, if the employer has at least 10 employees. Notification must be submitted within five working days after affected employees are informed of their retrenchment. MOM also offers an optional early alert that can lead to outplacement support.
MOM's July poll shows 27.9% of firms intend to raise wages in the next three months, down from 29.3% in June. Wage growth data is not part of this report, so budget conservatively and review again when MOM publishes its next wage release.
The Q2 2026 data describes a Singapore labour market that is stable on the surface and shifting underneath: resident job growth has slowed, foreign hiring has accelerated, vacancies have fallen and retrenchments have increased. An employer who plans around the headline number alone risks overspending on recruitment in sectors where talent is now available, or under-preparing for restructuring and pass-related costs that arrive in 2027.
Companies that review their headcount, budget realistically for payroll and use the available grants will be better placed to hire, retain or restructure on their own terms.
Responding to labour market shifts requires accurate payroll, current work pass records and timely statutory filings, all of which tend to slip when a small team is managing growth or restructuring at the same time.
ATHR provides payroll management, Employment Pass and work pass application and renewal support, accounting and tax services and corporate secretarial support for Singapore companies. Employers weighing the economics can also read the guide to outsourcing payroll versus doing it in-house.
👉 Ready to plan your workforce and payroll with confidence? Book a free consultation with ATHR today →
The ATHR Content Team is a group of professional writers from Singapore and the Philippines, committed to delivering informative, practical, and engaging content for business owners across Southeast Asia.
