Why Singapore Hiring Managers Are Struggling in 2026 — And What the Data Says to Do About It

· Keith Kwai

Two professionals in a hiring manager meeting discussing talent acquisition in Singapore

Written by Keith KwaiUpdated 14 September 2026

The Singapore labour market looks tight on paper. Unemployment sits at 2.0%, there are 73,300 open job vacancies, and the vacancy-to-unemployment ratio stands at 1.46 — meaning there are more open roles than unemployed people actively looking. On those numbers, hiring should be straightforward.

It is not.

According to the Singapore Hiring Manager Survey Report 2025–2026, published by Reeracoen and Rakuten Insight on June 11, 2026, only 23.2% of the 375 hiring managers surveyed feel “very confident” about finding qualified local talent. That is not a temporary dip. It reflects a structural disconnect between what the labour market produces and what Singapore employers need.

This article breaks down what the data actually shows, what hiring managers are getting wrong, and where the smarter ones are already adjusting.

The Numbers Don’t Add Up — Until You Look Closer

The Ministry of Manpower’s Labour Market Report, First Quarter 2026 (published June 15, 2026) records Singapore’s overall unemployment at 2.0%, with resident unemployment at 2.9% and citizen unemployment at 3.1%. Total employment grew by 9,400 positions in Q1 2026 — the 18th consecutive quarter of expansion since Q4 2021. 73,300 job vacancies remained open in March 2026, against roughly 50,200 unemployed residents, a vacancy-to-unemployment ratio of 1.46. That is, numerically, a seller’s market for candidates.

Yet according to the same Reeracoen and Rakuten Insight Singapore Hiring Manager Survey Report 2025–2026 (published June 11, 2026), 80.3% of hiring managers cite high salary expectations as their primary obstacle, 65.1% report capability mismatches, and 56.3% cannot locate candidates with the required experience. Those three numbers describe the same labour market. The disconnect is real.

The Singapore Business Federation’s National Business Survey 2026, First Quarter (published July 23, 2026) adds economic context: the hiring outlook index fell to 55.1, down 1.4 points from the previous quarter. Among SMEs specifically, 43% anticipated deteriorating business conditions in Q1 2026, compared to 30% in Q4 2025. The gap between how large companies and SMEs experience the same market is widening.

The Three Hiring Problems That Keep Repeating

1. Salary Expectations Have Outpaced Role Value

80.3% of employers cite elevated wage demands as their top challenge, according to the Reeracoen and Rakuten Insight Singapore Hiring Manager Survey Report 2025–2026 (published June 11, 2026). The same analysis projects average wage growth of 4.0–4.3% across 2026, with AI and cybersecurity roles commanding 4–6% above-market premiums and healthcare roles reaching approximately 6% increments.

For an SME with a fixed headcount budget, those expectations don’t land the same way they do for a bank or a multinational. The market is pricing skills against what the largest employers will pay — and smaller operators are increasingly being priced out of roles they have historically filled without difficulty.

2. The Skills Mismatch Is Not About Willingness to Learn

According to the Reeracoen and Rakuten Insight Singapore Hiring Manager Survey Report 2025–2026 (published June 11, 2026), 65.1% of hiring managers report skills gaps as a barrier to filling roles. The specific competencies most in demand are digital and AI capabilities, project management, data literacy, technical certifications, and communication and stakeholder management.

This is not a new list. The fact that it keeps appearing in surveys year after year suggests the problem is not awareness — it is a lag between what the workforce is being trained for and what hiring managers actually want. Certification programmes have expanded. SkillsFuture has funded thousands of training hours. Yet 65% of employers still cannot find candidates who match. Either the training is not translating to hirable skills, or hiring managers are setting thresholds that do not account for how skills transfer across roles and industries.

3. The Career Gap Bias Is Costing Employers Good Candidates

According to the Reeracoen and Rakuten Insight Singapore Hiring Manager Survey Report 2025–2026 (published June 11, 2026), 63% of hiring managers are hesitant about candidates who have been unemployed for more than three months. This matters because it is not an abstract preference — it has direct consequences on the available candidate pool.

The Ministry of Manpower’s Labour Market Report, First Quarter 2026 (published June 15, 2026) records 3,830 retrenchments in Q1 2026 alone — at a rate of 1.6 per 1,000 employees — with the primary cause being business reorganisation or restructuring. Filtering out candidates based on a 90-day employment gap is filtering out a substantial portion of available talent for reasons that have nothing to do with their capability. Retrenchment is a business decision. It is not a performance outcome. The same MOM report shows a resident re-entry rate of 60.7% within six months, which means competitors are hiring these people while others are screening them out at the first filter.

The Skills Evidence Shift

One concrete change is already underway. The Reeracoen and Rakuten Insight Singapore Hiring Manager Survey Report 2025–2026 (published June 11, 2026) finds 76.6% of hiring managers now require documented evidence of skills development — certificates, portfolios, badges, and training records — when assessing applicants.

This is a structural shift away from credential-dependent screening (degree, years of experience, job title) toward verified competency screening. For candidates, this opens pathways for those who have upskilled but lack the traditional paper trail. For employers, it requires updating evaluation frameworks — most job description templates have not caught up with this shift in practice.

The same survey finds over 76% of employers now rely on recruitment agencies to manage shortlisting, citing faster access to pre-vetted candidates and better market intelligence. That figure deserves scrutiny. Over three-quarters of Singapore employers outsourcing their candidate shortlisting suggests the internal recruitment function — particularly in SMEs — is not equipped to do competency-based screening at scale.

What the Forward Indicators Are Showing

Both the SBF data and MOM’s forward indicators are pointing in the same direction. The Ministry of Manpower’s Labour Market Advance Release, First Quarter 2026 (published April 30, 2026) shows the share of firms expecting to hire in the next three months dropped from 54.6% in February to 44.6% in March 2026. Wage increase expectations fell from 39.3% to 25.4% over the same period.

Hiring managers are pulling back — not because there is no work, but because the economics of hiring have become harder to justify. Rising salary expectations, a compressed margin environment (the SBF cost expectations index hit 75.9 in Q1 2026, per the National Business Survey 2026, First Quarter, published July 23, 2026), and ongoing uncertainty are combining to make employers more selective. More selective with fewer frameworks for how to select well is a recipe for extended vacancy periods, rushed compromises, and poor retention.

Commentary: What the Hiring Manager Data Is Actually Telling You

By Keith Kwai

The finding I keep returning to is the 63% who won’t consider candidates unemployed for more than three months. That number tells you something about process, not people.

A hiring manager who screens out a candidate for a 90-day gap is using employment status as a proxy for quality. That’s a lazy filter. Employment status tells you the candidate was between jobs. It tells you nothing about whether they’re capable, current on skills, or a reasonable fit for the role. In 2025, 14,400 people were retrenched in Singapore — largely because their companies reorganised. They didn’t stop being competent. Their company stopped needing them in the same configuration. Filtering them out three months later because they haven’t yet landed something new is not rigorous screening. It’s a shortcut that reduces your candidate pool for no analytical reason.

The salary expectations problem is real, but it is also partly self-inflicted. If 80% of candidates arrive with salary expectations above your range, one of three things is true: your range is below market (the most likely explanation if you haven’t benchmarked recently), your role specification is attracting more senior candidates than the job requires, or your sourcing channels are reaching the wrong level. Complaining about salary expectations while not adjusting the compensation framework or the sourcing strategy is not a talent acquisition problem — it’s a planning failure dressed up as a market complaint.

The skills mismatch data is the one that actually concerns me. 65.1% of hiring managers report experience and skills gaps — while 76.6% now say they require documented skills evidence. There is a contradiction buried in those two numbers. If you require proof of recent training, you are effectively filtering for people who anticipated your skills needs and upskilled proactively before anyone told them to. That is a very small pool. Most people upskill reactively, once they know what to prepare for. The smarter hiring managers I’ve observed are specific in job postings about exactly which skills they need, they give meaningful weight to recent training rather than just historical employment history, and they treat the interview as the place to probe depth — not the CV filter as the place to eliminate candidates.

The agency dependency figure also warrants attention. 76% of employers outsourcing shortlisting to agencies is not a sign of a healthy internal talent acquisition function. It means the internal process cannot reliably surface good candidates, so the response has been to pay someone else to do it. That works for volume hiring and mid-level role replacements. It stops working when you need strategic hires — the kind where institutional knowledge of your business, culture, and team dynamics matters. Agencies can fill roles. They cannot tell you which person will still be there in two years, or which hire will change the direction of a team.

Singapore’s labour market is tight and will remain so. The employers gaining ground are those who have treated talent acquisition as an internal capability worth building, not a problem to outsource when urgency strikes. If your current hiring process is generating 90-day vacancies and declining offer acceptance rates, the answer is not to wait for the market to improve. The market is what it is. The variable is your process.

Four Adjustments Hiring Managers Should Make Now

Benchmark salary ranges against 2026 data, not last year’s offer history. The Reeracoen and Rakuten Insight survey projects 4.0–4.3% average wage growth for 2026. If your job grades haven’t moved accordingly, you’re advertising below market and then wondering why experienced candidates aren’t converting.

Update your screening criteria to explicitly include transferable skills and recent training. 76.6% of hiring managers already require skills evidence. If you’re still defaulting to pedigree-based screening — degree type, company name, years in a specific title — you’re evaluating where candidates have been, not what they can actually do.

Remove the 90-day unemployment filter from your process. Given retrenchment volumes through 2025 and into 2026, this screen is eliminating people who left their last role for structural reasons entirely outside their control. Screen for demonstrated competence and fit. Leave the gap explanation for the interview conversation.

If you’re using agencies, brief them properly. A vague brief produces vague shortlists. Specify the exact competencies you need, the behavioural profile you’re looking for, and the salary range you will actually offer — not the one you’re testing the market with. Agencies work with the information you give them.

Conclusion

Singapore’s hiring market in 2026 is tight by unemployment metrics and difficult by hiring manager experience. Both are true at the same time. The gap between 73,300 open vacancies and 23.2% confident hiring managers is explained by structural problems: salary benchmarks that have not kept pace, skills criteria that outpace the available supply, and evaluation frameworks built for a different labour market.

The employers making headway are not operating in a better labour market. They are using better processes inside the same one. For hiring managers navigating the September 2026 environment, the most productive question is not “why can’t we find good candidates” — it is “what in our process is turning them away before we even see them.”

Sources

About the Author

Keith Kwai is a senior marketing and technology executive with 25 years of experience across global MNCs and Singapore SMEs. Currently CMO and IT Officer at Skylink Holdings Limited (SGX-listed). Connect on LinkedIn at linkedin.com/in/keithkwai.