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Jean Iau

Wages in Singapore grew by 4.3 per cent this year, the lowest in Southeast Asia, but slightly higher than the 3.9 per cent rate in Hong Kong, a study has found.
Professional services firm Aon released its annual Salary Increase and Turnover Survey on Wednesday, based on data collected from more than 700 companies in the region including Indonesia, Malaysia and the Philippines.
The study found that the average percentage growth across the region was 5.4, with Vietnam having the highest percentage growth at 7.7.
Singapore’s 4.3 per cent mark, which does not take inflation into account, is slightly higher than the 2024 figure of 4.2 per cent and 4.0 per cent for 2023 that previous editions of the survey found.
More companies in Singapore this year said they would not hire more people, according to the study. About two-thirds of companies said they expected headcount projection for the year to remain flat, up from just over half in 2024. The survey received responses from 590 companies in Singapore, with some being MNCs.
About 21 per cent of companies this year said they expected expansion of between 5 and 20 per cent, while the remaining 13 per cent said they were anticipating a contraction of under 5 per cent.

The manpower ministry said in its quarterly update, published in September, that it expected labour market adjustments in the third quarter of the year to come mainly through slower hiring and moderated wage growth owing to global uncertainty.
The ministry said the proportion of firms that planned to hire in the third quarter of the year fell to 43.7 per cent in June from 44 per cent in March. Meanwhile, the proportion of firms planning redundancies rose to 1.9 per cent in June from 1.6 per cent in March.
Rahul Chawla, partner and head of talent solutions in Southeast Asia at Aon, explained that Singapore’s wage growth was lower than that of its neighbouring countries since inflation, the developing nature of other Southeast Asian economies and the demand for labour were drivers of wage increases.
Companies operating in an environment where the cost of goods is higher have to keep salaries in check and try to deploy other methods to retain talent.
Kim Seonghoon, associate professor of economics at Singapore Management University, said the 4.3 per cent wage growth was impressive considering how high baseline wages were in Singapore compared to other countries in the region.
“Although the percentage may appear slightly lower than neighbouring countries, the actual dollar increases are quite meaningful given Singapore’s substantially higher GDP per capita base and lower inflation environment. This combination actually demonstrates robust economic performance,” Kim said.
Similarly, Chua Yeow Hwee, assistant professor of economics at Nanyang Technological University’s School of Social Sciences, noted that Singapore’s more modest wage growth reflected stability and maturity.
“The labour market here operates at a high base, with strong productivity and well-anchored inflation. Wage adjustments are increasingly tied to skills upgrading and long-term competitiveness rather than short-term cost pressures,” Chua said.
“In fact, Singapore’s wage path strikes a sweet spot: steady enough to preserve competitiveness while ensuring real incomes continue to rise.”

In July, the Monetary Authority of Singapore kept its full-year inflation forecast for 2025 at between 0.5 and 1.5 per cent, compared with 2.8 per cent in 2024. The figure excludes the costs of accommodation and private transport.
On companies in Singapore opting not to increase headcount while still raising wages, Chawla said organisations were exercising caution in hiring.
“It is a multiplier effect; if I increase my headcount and I give a salary increase on top of that headcount, my bottom line gets impacted,” he said.
“The government is also fair in observing that there are stressors in the system. Organisations are acknowledging those stresses, but they appreciate that to keep the lights on, they need quality talent, and that quality talent comes at a cost.”
While the Aon study found that the actual wage increase in Singapore for this year was slightly higher than in Hong Kong, the 2026 budgeted salary is expected to close the gap between the two financial hubs. Wage growth in Singapore is likely to remain unchanged at 4.3 per cent next year, compared with Hong Kong’s projected rate of 4.1 per cent.
“We refrain from saying that there is a competition of talent between Singapore and Hong Kong. There is a demand for talent in both markets,” said Chawla, noting that Hong Kong had a supply of talent coming in from mainland China, which acted as a backstop for attrition.
Singapore salaries in the life sciences and medical devices sector saw a 4.4 per cent salary climb – the highest across industries – and are projected for a 4.6 per cent rise in 2026.
Involuntary turnover rate, which includes retrenchments and performance-based termination, was also higher in Singapore at 6.6 per cent than in the rest of the region. The figure is up from 6.0 per cent in 2024.


Chawla called this increase “material in nature”.
“If you look at the entire headcount in Singapore, 60 basis points, or 0.6 percentage of that was involuntary, that means that the structural changes or optimisation is visible in the numbers,” he said.
The involuntary turnover figure was propped up by the retail and hospitality sector, which saw a turnover rate of 7.3 per cent, followed by the technology sector at 6.8 per cent.
Chawla noted that involuntary turnover included companies closing down, and noted the record high closures of food and beverage outlets in Singapore.
Chua said the involuntary turnover was not concerning as it reflected rebalancing and not distress. In tech, firms are consolidating after earlier rapid expansion and shifting towards artificial intelligence-driven efficiency while in retail and hospitality, the adjustments follow the post-pandemic hiring surge as demand normalises and automation expands.
“These shifts are expected in a maturing economy,” he said, noting that the government’s active labour-market policies, retraining programmes, and job-matching systems had ensured displaced workers were typically able to find jobs quickly.
Kim noted it was becoming increasingly important for governments to invest in reskilling and upskilling workers, especially older ones. As a positive example, he cited Singapore’s SkillsFuture schemes, which the government earmarked S$441.15 million (US$340 million) towards in this financial year.
“Other Southeast Asian countries and Hong Kong are all experiencing or approaching population ageing,” Kim said. “Combined with rapid AI disruption reshaping work across industries, we should pay close attention to how they are upskilling their labour force to navigate these dual challenges.”


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The Salary Increase and Turnover Survey reveals that wages in the city state grew by 4.3 per cent this year, versus Hong Kong’s 3.9 per cent


The Salary Increase and Turnover Survey reveals that wages in the city state grew by 4.3 per cent this year, versus Hong Kong’s 3.9 per cent.


Singapore 2025 wage growth lowest in Southeast Asia, but edges out Hong Kong: study

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}The Salary Increase and Turnover Survey reveals that wages in the city state grew by 4.3 per cent this year, versus Hong Kong’s 3.9 per cent

The Salary Increase and Turnover Survey reveals that wages in the city state grew by 4.3 per cent this year, versus Hong Kong’s 3.9 per cent