SNEF urges targeted Budget 2026 support on manpower and costs

SNEF recommended enhancing and extending the Progressive Wage Credit Scheme beyond 2026.

The Singapore National Employers Federation (SNEF) has urged the government to provide targeted support in Budget 2026 to help businesses manage manpower and cost pressures whilst accelerating workforce and enterprise transformation, citing heightened uncertainty among employers despite a stronger growth backdrop.

SNEF noted that whilst the Ministry of Trade and Industry has upgraded Singapore’s 2025 GDP growth outlook to around 4.0%, about three in four employers still expect uncertain business prospects in 2026, which is weighing on hiring intentions and wage growth.

To address manpower constraints, SNEF called for greater flexibility in accessing foreign manpower, particularly for firms that adopt progressive employment practices such as structured flexible work arrangements, enhanced caregiving leave, and active senior hiring.

It proposed temporary quota flexibilities or cross-deployment arrangements under the Manpower for Strategic Economic Priorities scheme for companies undertaking productivity improvements or business restructuring.

SNEF also suggested easing bottlenecks by expanding source countries, introducing sector-differentiated sub-quotas, and moderating the pace of increases in S Pass and Employment Pass qualifying salaries.

Given Singapore’s ageing workforce, SNEF recommended extending the Senior Employment Credit (SEC) beyond 2025 and continuing the CPF Transition Offset (CTO) beyond 2026 to help employers adjust to higher CPF contribution rates for senior workers.

On digitalisation, SNEF urged stronger measures to accelerate AI adoption, particularly among small and medium-sized enterprises.

SNEF also called for deeper investment in workforce transformation and leadership development.

Its proposals included extending the duration of support for Career Conversion Programmes, introducing absentee payroll or study-leave reimbursement tied to outcomes, and co-funding the development of leadership and management courses, with higher subsidies for SMEs.

In addition, SNEF advocated further support to sustain progressive employment practices, such as short-term staffing assistance to cover operational gaps when employees are on leave, enhanced tools and ecosystems for flexible work arrangements, job redesign, and workforce scheduling.

To ensure a sustainable uplift for lower-wage workers, SNEF recommended enhancing and extending the Progressive Wage Credit Scheme beyond 2026, so that employers can continue to raise wages without undermining productivity investments.