Experts warn of possible deterioration in Singapore’s labour market

UOB cites falling recruitment and resignation rates as early warning signs.

The labour market remains broadly stable, but experts warned of potential deterioration as vulnerabilities emerge.

“The degree of labour market tightness has receded meaningfully from the recent peak in 2Q22 amidst the post-pandemic rebound and has been broadly stable since mid-2024, which reflects a broadly healthy job market but with some pockets of slack emerging,” said Jester Koh, associate economist at UOB Global Economics and Markets Research.

In its report, UOB Global Economics and Markets Research highlighted that recruitment and resignation rates in Singapore declined in the first quarter. Recruitment dipped to 1.8%, compared to the 2.3% average seen in 2018–2019.

“This indicates that employers could be hesitant or highly cautious when making employment decisions amidst an uncertain economic outlook clouded by tariffs and geopolitical tensions,” said Koh.

Resignation rates in 1Q25 stood at 1.2%, also below the 2018–2019 average of 1.8%.

“This suggests that employees choose to stay in their current role given the perceived lack of better opportunities in the job market,” he said.

“The current job market situation can be best characterised by the trio of ‘low firing, low hiring and low quitting’,” he added.

Koh said a drop in both recruitment and resignation rates was also observed before the sharp, unpredictable rise in unemployment during the 1997–98 Asian Financial Crisis.

Still, he believes Singapore is not headed for a similar downturn, pointing to strong re-entry into the workforce—60.6% in 1Q25 versus 58.1% in 4Q24—as one of several stabilising factors.

Following partial tariff suspensions, MOM polls showed that 42.2% of firms intend to hire in Apr/May, up from 40.5% in March, but plans to raise wages dipped to 21.2%. 

“Labour market data for 2Q25/3Q25 will be crucial to watch to assess the extent of the impact of tariffs on the job market,” Koh said.