Retrenchment is not just a job-loss issue — it is a reminder to redesign work, recognise skills and create better pathways for experienced talent. Photo by Canva
Singapore’s latest wage recommendations send a clear message to employers: higher wages and stronger productivity must go hand in hand. But is your workforce ready to deliver more value?
For many Singapore businesses, managing manpower costs has become an increasingly difficult balancing act.
Employers want to reward their employees fairly. At the same time, they face operating cost pressures, tighter margins, changing workforce expectations and the growing need to invest in artificial intelligence (AI).
The latest National Wages Council (NWC) 2026/2027 guidelines, announced on 19 October 2026, bring this challenge into sharper focus.
The recommendations call for wage increases for lower-wage workers, alongside greater investment in employee training, AI adoption and job redesign.
For business owners, HR leaders and operations managers, the question is no longer simply how much salaries should increase.
It is how businesses can create the productivity needed to sustain higher wages.
What Are the New Singapore Wage Guidelines for 2026/2027?
According to the latest, employers are encouraged to share the gains from Singapore’s stronger-than-expected economic performance with their employees.
The guidelines, which cover 1 December 2026 to 30 November 2027, recommend that employers provide appropriate wage increases based on their business performance and prospects.
Recommended Wage Increases for Lower-Wage Workers
For lower-wage workers earning a gross monthly salary of up to S$2,800, the NWC recommends wage increases ranging from 6% to 8%, with different minimum dollar recommendations depending on the employer’s circumstances.
Employers performing well with positive business prospects are encouraged to provide increases at the higher end of the range, or at least S$135 to S$170, whichever is higher.
Even employers that have performed poorly and are unprofitable are recommended to provide a built-in increase of at least S$120.
Are the NWC Guidelines Mandatory?
Importantly, these are NWC wage recommendations, not a blanket statutory requirement for every employer. Companies must also observe any separate mandatory Progressive Wage Model and other applicable wage requirements.
The has accepted the NWC guidelines and emphasised the need for sustainable wage growth supported by workforce transformation.
For employers, this presents both a responsibility and an opportunity.
The Bigger Challenge: What Happens When Manpower Costs Rise Faster Than Productivity?
Singapore’s economy has performed strongly in 2026, but productivity improvements have not been evenly distributed across industries.
According to MOM, overall labour productivity increased by 3.8% year-on-year in the first half of 2026.
However, while sectors such as manufacturing and wholesale trade experienced stronger productivity performance, sectors including food and beverage services and transportation and storage faced greater unit labour cost pressures.
This highlights an important reality.
Economic growth does not automatically translate into productivity improvements for every business.
The Hidden Productivity Cost of Outdated Workflows
Consider an SME operating with a labour-intensive workforce.
If salaries rise but employees continue to work through the same manual processes, outdated systems and inefficient workflows, the company’s operating costs increase without a corresponding improvement in output.
Over time, this can place pressure on profitability, pricing competitiveness and business sustainability.
But responding by freezing recruitment, reducing headcount or increasing employee workloads is not necessarily the best solution.
Instead, employers should examine whether their current workforce structure is designed to support the productivity their business now requires.
That is where workforce transformation and job redesign in Singapore become increasingly relevant.
Why Job Redesign May Be the Missing Link Between Wage Growth and Productivity
For years, companies have approached manpower planning primarily through headcount.
When workloads increase, they hire.
When costs rise, they reduce spending.
When productivity stagnates, they encourage employees to work faster.
But what if the underlying problem is not the number of employees, but how the work itself is organised?
Job redesign challenges employers to rethink existing responsibilities, workflows and skills requirements.
Instead of focusing only on how many employees are needed, businesses can consider how technology, training and better job structures can help employees create more value.
Practical Examples of Job Redesign at Work
For example, a logistics company might find its supervisors spending significant time manually compiling operational reports.
A manufacturing company might discover that experienced employees are repeatedly performing administrative tasks rather than focusing on quality control and process improvement.
A service business might realise that supervisors are spending too much time coordinating schedules, leaving limited time for customer experience and employee coaching.
In each situation, the opportunity is not simply to work harder.
It is to redesign work so employees can focus on tasks that contribute greater value.
This is what sustainable productivity improvement should look like.
Five Workforce Strategies Singapore Employers Should Prioritise
1. Review Workforce Productivity Before Increasing Headcount
When employees are overstretched, hiring additional staff can seem like the fastest solution.
However, businesses should first understand where productivity is being lost.
Are employees spending too much time on repetitive administration? Are responsibilities overlapping? Are approvals slowing down daily operations?
A workforce productivity assessment can help identify operational bottlenecks and areas where job roles or processes should be redesigned.
For employers managing rising manpower costs in Singapore, this provides a clearer basis for deciding when to recruit, restructure workflows or invest in technology.
2. Use AI to Improve Workflows, Not Simply Reduce Manpower
AI adoption is becoming an increasingly important part of workforce transformation in Singapore.
But introducing AI tools without changing existing processes may produce limited results.
Consider an HR department that uses AI to assist with drafting training materials but still relies on disconnected spreadsheets to monitor employee development.
The technology might save time on one task, but the wider workflow remains inefficient.
A more effective approach combines AI adoption with job redesign.
Companies can identify repetitive tasks suitable for automation, redefine employees’ responsibilities and develop the skills needed to work effectively with new systems.
The objective should not be replacing employees simply because technology is available.
It should be helping employees deliver higher-value outcomes through better processes and appropriate technology.
3. Turn Employee Training Into Measurable Performance Improvement
The NWC’s latest recommendations place considerable emphasis on continuous training and preparing employees for an AI-enabled economy.
However, training should not be treated as a standalone activity.
A completed course does not necessarily mean an employee can apply new skills effectively at work.
Companies should connect learning and development to actual job requirements, identified skills gaps and performance objectives.
For example, when a role is redesigned to involve more digital reporting or customer engagement, the employee should receive relevant training, practical on-the-job support and clear performance expectations.
Technology can help make this process more structured.
Solutions such as connect learning, performance reviews and on-the-job training (OJT) planning to help employers identify development needs and support employees in building relevant capabilities.
The broader principle remains the same: training investments should translate into improved skills, stronger performance and meaningful career development.
4. Build a More Flexible Workforce Strategy
Not every business challenge requires permanent headcount expansion.
For companies experiencing seasonal demand, project-based workloads or fluctuating manpower requirements, a combination of permanent employees and temporary or contract staffing may provide greater operational flexibility.
However, workforce flexibility should not be confused with avoiding fair wage practices or employment obligations.
Employers still need to ensure appropriate compensation, regulatory compliance and fair employment conditions.
A well-designed manpower strategy considers the organisation’s long-term capability needs alongside short-term operational requirements.
By aligning recruitment, staffing and workforce planning with actual business demand, employers can improve resource allocation while maintaining service quality.
5. Measure Productivity Gains Alongside Wage Growth
One of the most important changes employers can make is to review how they measure workforce performance.
Salary cost alone does not provide a complete picture of productivity.
Businesses should also consider indicators such as output per employee, turnaround time, error rates, quality outcomes, customer satisfaction and the amount of manual administrative work required.
The most useful indicators will depend on the business and job function.
By tracking performance before and after process improvements, employers can better understand whether investments in technology, training and job redesign are producing meaningful results.
That creates a stronger foundation for sustainable wage growth.
Can Government Support Help Employers Manage Wage Increases and Workforce Transformation?
Singapore employers do not necessarily have to finance workforce transformation entirely on their own.
There are two different types of support worth understanding.
Progressive Wage Credit Scheme (PWCS)
The Progressive Wage Credit Scheme provides transitional government co-funding for qualifying wage increases given to eligible lower-wage Singapore Citizen and Permanent Resident employees.
The scheme has been extended to 2028.
However, employers should pay attention to the eligibility conditions.
For new qualifying wage increases in 2027 and 2028, the minimum average gross monthly wage increase required for PWCS support is S$200, compared with S$100 for 2026. Different treatment can apply to qualifying increases from earlier years that are sustained.
This creates an important distinction: a wage increase aligned with an NWC recommendation may not automatically qualify for PWCS co-funding.
Employers should review the latest requirements through .
SkillsFuture Workforce Development Grant — Job Redesign+ (WDG(JR+))
For companies seeking longer-term productivity improvements, the SkillsFuture Workforce Development Grant (Job Redesign+) provides an opportunity to explore structured workforce transformation.
Eligible Singapore SMEs may receive funding support of up to 70% of qualifying project costs, while non-SMEs may receive up to 50%, subject to an overall cap of S$150,000 per enterprise.
Supported areas include workforce consultancy, capability building and relevant workforce technology solutions, subject to programme requirements.
For businesses struggling with manpower dependency, inefficient workflows or AI adoption challenges, Job Redesign+ may provide a more structured and financially accessible route towards workforce improvement.
Funding is subject to eligibility, approved project scope and grant approval.
The Elitez Perspective: Sustainable Wage Growth Starts With Better Workforce Design
At Elitez, we believe the conversation around rising manpower costs should extend beyond salary adjustments.
Fair and sustainable wage growth is important. So is ensuring that businesses remain productive, competitive and capable of creating meaningful opportunities for employees.
The two objectives should reinforce each other.
For employers, this means reviewing not only what employees are paid, but also how work is organised, what skills are needed and where inefficiencies are limiting performance.
How Elitez Supports Productivity-Led Wage Growth
Through our experience in recruitment, manpower solutions and workforce transformation, Elitez supports businesses in addressing workforce challenges from multiple perspectives.
Our helps employers assess workforce structures, identify productivity gaps and explore opportunities for job redesign, capability development and technology adoption.
Because workforce transformation should not simply be about doing the same work with fewer resources.
It should be about creating better ways of working, stronger employee capabilities and greater long-term business value.
What Should Singapore Employers Do Before the New Wage Guidelines Take Effect?
With the 2026/2027 NWC guidelines taking effect from 1 December 2026, employers should use the coming weeks to review both their compensation approach and their workforce productivity plans.
Employer Readiness Checklist Before 1 December 2026
A useful starting point is to ask:
- Are our current wage structures competitive and aligned with applicable requirements?
- Which departments are experiencing the greatest manpower cost pressure?
- Are there repetitive tasks or operational bottlenecks that can be addressed through job redesign?
- What skills will employees need as AI and digital technologies change their responsibilities?
- Could relevant government support help us implement workforce transformation more effectively?
The answers can help management teams build a more balanced strategy for wages, productivity and workforce development.
Higher Wages Should Be Supported by Higher-Value Work
Singapore’s latest wage guidelines are more than a reminder to review employee salaries.
They signal a broader need for employers to connect business competitiveness with workforce development.
As wage expectations evolve and AI changes the way organisations operate, companies that rely only on traditional manpower models may face growing productivity challenges.
Those that invest in better workforce planning, job redesign, relevant technology and employee development will be better positioned to manage rising costs while creating sustainable opportunities for their people.
The future of workforce competitiveness is not simply about controlling manpower costs. It is about increasing the value that people and businesses can create together.
Is Your Business Ready for Workforce Transformation?
If your organisation is facing rising manpower costs, productivity challenges or difficulties adopting AI, now is a practical time to assess your workforce strategy.
Elitez can help you explore opportunities for job redesign, workforce productivity improvement and relevant WDG(JR+) support.
Request a Workforce Transformation Consultation with Elitez
Understand where your workforce challenges lie — and what practical steps your business can take next.
FAQ About Singapore Retrenchments and Job Redesign
According to MOM, Singapore recorded 4,620 retrenchments in Q2 2026, compared with 3,830 in Q1 2026.
These are quarterly figures, not the total for the full year.
Retrenched PMETs may face challenges relating to industry-specific hiring requirements, salary expectations, changing technical competencies and mismatches between available vacancies and their previous experience.
Skills-based hiring evaluates candidates based on job-relevant competencies, practical capabilities and transferable experience rather than depending primarily on previous job titles, qualifications or industry backgrounds.
Job redesign involves reviewing and restructuring responsibilities, workflows, workplace technology and operational processes to improve productivity, workforce adaptability and job effectiveness.
Job redesign can help employers improve efficiency, make better use of existing employee capabilities, support mature workers and expand recruitment opportunities to candidates with relevant transferable skills.
Career Conversion Programmes support eligible employers in reskilling mid-career workers for new or redesigned roles through structured training and applicable employment support.
Elitez supports organisations through recruitment, workforce deployment, training and job redesign initiatives, helping businesses address manpower challenges and build more adaptable workforces.