Singapore’s Ministry of Manpower released its Labour Market Report for the first quarter of 2026 on 15 June 2026. The headline: the market is tight, broadly stable, and increasingly scrutinised — all three of which have direct implications for any employer considering Employment Pass or S Pass hires. Retrenchments edged up slightly from the previous quarter but remained within what MOM characterises as non-recessionary norms. Job vacancies eased from their December 2025 peak but still substantially exceed the number of unemployed residents.
This article reads the MOM data through the lens of foreign-hiring strategy — covering what the employment, vacancy, and retrenchment figures mean for COMPASS scoring, Fair Consideration Framework scrutiny, and the practical environment for EP and S Pass applications in 2026.
Singapore Labour Market Q1 2026: The Core Numbers
Per the MOM Labour Market Report Q1 2026, published 15 June 2026:
| Indicator | Q1 2026 | Previous Quarter (Q4 2025) |
|---|---|---|
| Total employment growth | +9,400 | +17,700 |
| Resident employment growth | +5,400 | +3,100 |
| Overall unemployment rate | 2.0% | ~2.0% |
| Resident unemployment rate | 2.9% | ~3.0% |
| Citizen unemployment rate | 3.1% | ~3.1% |
| Resident long-term unemployment | 0.9% | 0.9% |
| Job vacancies (March 2026) | 73,300 | 77,700 (Dec 2025) |
| Job vacancy-to-unemployed ratio | 1.46 | 1.58 |
| Retrenchment rate | 1.6 per 1,000 employees | Slightly lower |
| 6-month re-entry rate (retrenched residents) | 60.7% | 57.4% |
The labour market delivered its 18th consecutive quarter of employment growth since Q4 2021. The moderation in total growth (from +17,700 to +9,400) was driven by slower non-resident employment growth — a reflection of continued MOM scrutiny of foreign headcount — while resident employment growth actually strengthened in Q1 2026. That pattern matters: it signals that local hiring conditions are not loosening, which affects how MOM calibrates its approach to EP and S Pass applications.
What the Unemployment Rate Tells Us About EP Scrutiny
A resident unemployment rate of 2.9% and a citizen unemployment rate of 3.1% looks low in absolute terms, but the interpretation that matters for EP applications is relative. Singapore’s Fair Consideration Framework (FCF) is designed to ensure that Employment Pass applications are made by employers who have genuinely considered local candidates. When resident unemployment is low — meaning most Singaporeans who want a job have one — MOM expects employers to demonstrate that the specific role, at the specific seniority and salary level, genuinely requires a foreign professional.
The COMPASS framework scores EP applications across five criteria, including a Fair Consideration criterion that rewards employers with strong local hiring track records relative to their industry peers. A tight resident unemployment rate signals that MOM will look carefully at whether an employer’s local-hiring ratio is consistent with the available talent pool. Employers whose COMPASS scores rely heavily on salary and qualifications — but show weak local-hiring ratios — face a harder environment in 2026 than in periods of higher local unemployment. For a detailed explanation of how COMPASS scoring works, the COMPASS framework guide remains essential reading before any EP application.
The Vacancy-to-Unemployed Ratio: A Key S Pass Signal
The job vacancy-to-unemployed ratio fell from 1.58 in December 2025 to 1.46 in March 2026. This means there are still significantly more job openings than unemployed residents seeking work. For S Pass applications, this ratio carries a specific implication: it tells MOM how genuinely constrained the local labour supply is for any given role.
Sectors where vacancies remain high relative to local unemployment — such as technology, advanced manufacturing, and healthcare — continue to attract stronger MOM support for foreign hires through schemes like the Shortage Occupation List (SOL). Sectors where vacancies have eased and local talent supply is adequate face more scrutiny on S Pass quota utilisation and levy-tier management. Employers approaching their S Pass quota limits should note that a declining vacancy-to-unemployed ratio signals MOM’s continued preference for local hiring — the S Pass quota is not simply a headcount ceiling but an implicit target for local workforce development. For a full breakdown of S Pass quota, levy tiers, and employer obligations, the Singapore S Pass guide 2026 covers these in detail.
Retrenchments: Contained but Worth Watching
Retrenchments in Q1 2026 edged up slightly from Q4 2025 but remained at 1.6 per 1,000 employees — well within MOM’s characterisation of non-recessionary norms. Importantly, the six-month re-entry rate for retrenched residents rose for the second consecutive quarter, from 57.4% in Q4 2025 to 60.7% in Q1 2026. This means that nearly two-thirds of retrenched Singaporean workers find employment within six months — a figure that reflects a healthy labour market for residents.
For foreign-hiring employers, slightly elevated retrenchments create an additional dimension of risk in EP and S Pass applications: if an employer is simultaneously retrenching local employees and applying for new work passes, MOM scrutinises these applications carefully. The Fair Consideration Framework and COMPASS both incorporate signals about employer workforce conduct. An employer with active retrenchments in a role category similar to the EP or S Pass applied for faces a tougher assessment environment. If you are managing headcount reductions alongside foreign-hire applications, seek licensed employment advice before submitting pass applications.
Which Sectors Are Hiring in Q1 2026?
The Q1 2026 report identifies that employment growth was concentrated in services sectors, particularly:
- Professional services and financial services: Continued demand for EP-level talent, with relatively strong local-hire ratios in established financial institutions. New entrants and smaller firms face more scrutiny.
- Healthcare and social services: Structurally tight labour supply means foreign-hire approvals remain relatively accessible for clinical roles, particularly nurses, doctors, and allied health professionals.
- Technology and infocomm: Vacancy rates remain elevated, supporting EP approvals for software engineers, cybersecurity specialists, and AI roles. The ONE Pass and Tech.Pass remain the preferred routes for senior technology talent.
- Construction and marine: Work Permit and S Pass demand remains stable. Quota and levy management are the primary compliance concerns, not EP approval rates.
Sectors showing moderation in hiring growth include retail and food services, where automation and business model changes have slowed headcount growth without eliminating foreign-worker dependency at the Work Permit level.
Practical Implications for Employers Planning Foreign Hires in 2026
Reading the Q1 2026 data through an operational HR lens, four practical implications stand out:
1. Build Your COMPASS Score Proactively
A 1.46 vacancy-to-unemployed ratio means MOM has good reason to expect employers to hire locally where they can. Employers whose COMPASS Fair Consideration scores are borderline should invest in MyCareersFuture advertising quality, document local candidate shortlisting evidence, and review their local-to-foreign workforce ratio before applying. Reactive applications — lodged after a hiring decision is already made — leave too little room to address FCF shortfalls. The Singapore Employment Pass guide 2026 sets out the current qualifying salary thresholds and COMPASS scoring criteria in detail.
2. Sector Matters as Much as Salary
Two EP applications for the same salary in different sectors can have very different approval outcomes. Technology and healthcare roles in genuine shortage — as reflected in MOM’s Shortage Occupation List — carry implicit support. Professional services roles in sectors with healthy local pipelines face harder COMPASS Fair Consideration assessment. Know your sector’s position before you apply.
3. Manage S Pass Quota with Vacancy Data in Mind
The easing in job vacancies (from 77,700 to 73,300) suggests that the labour market, while still tight, is not as acute as it was six months ago. MOM may respond to continued easing by tightening S Pass quota allowances in sectors where local supply is adequate. Employers currently operating at or near their S Pass quota ceiling should model their workforce plans against the possibility of quota adjustments in H2 2026 and prepare contingency hiring strategies for local talent.
4. Retrenchment and Hiring Applications Must Be Coordinated
If your company has or recently completed a round of retrenchments — even in unrelated departments — ensure that your EP or S Pass applications are filed with a clear narrative of why the foreign hire does not overlap with the retrenched roles. An uncoordinated approach, where payroll records show local retrenchments in the same month as EP applications, creates compliance and approval risk that a stronger local-hire policy could otherwise avoid. Review how work-pass cancellation and repatriation obligations interact with your talent strategy at LBEA’s work pass cancellation and repatriation guide.
The SWDA Factor: How Singapore’s New Workforce Agency Affects the Data
The Q1 2026 labour market data was collected under the old SSG/WSG structure, but its interpretation going forward will be shaped by the newly launched Skills and Workforce Development Agency (SWDA), which launched on 1 July 2026. The SWDA’s mandate — integrating skills training with employment facilitation — means that future labour market data may be reported differently, with tighter correlation between training programme participation and employment outcomes.
For employers, this creates an opportunity: firms that participate actively in Career Conversion Programmes (now under SWDA’s unified management) can demonstrate to MOM that they are contributing to local workforce development, which supports stronger COMPASS Fair Consideration scores in future EP applications. For a full breakdown of what the SWDA transition means for employers, see SWDA Singapore: what employers need to know.
Getting Foreign Hiring Right in a Tight Labour Market
Singapore’s Q1 2026 labour market confirms a consistent pattern: the market rewards employers who hire locally first and document that effort clearly, while tightening the pathway for those who rely on foreign hires as a default. Employment Pass and S Pass approvals are not impossible — far from it — but the evidentiary bar for demonstrating genuine local-hiring effort is higher than it was three years ago.
Little Big Employment Agency (LBEA) is a MOM-licensed employment agency (Licence No. 19C9790) that advises both employers and foreign professionals on work-pass applications, COMPASS strategy, and talent acquisition in Singapore’s regulatory environment. For foreign professionals assessing their EP eligibility, the Singapore job market guide for foreign professionals provides a useful orientation. For end-to-end employment and relocation support, Singapore Employment Agency and Raffles Corporate Services work together to support companies and individuals navigating Singapore’s hiring landscape.
Employers seeking more detail on how MOM assesses work-pass applications in the context of the broader labour market can consult the Employment Pass eligibility criteria on MOM’s website, as well as the S Pass key facts page, both of which are updated as policy settings change.
— The Editorial Team, Little Big Employment Agency