The Ministry of Manpower released its Labour Market Report for Q1 2026 on 15 June 2026. For HR managers, hiring teams, and foreign professionals planning moves to Singapore, the data is worth reading carefully — not just as a headline figure, but as a signal for where Employment Pass and S Pass applications are likely to face the most scrutiny, which sectors are expanding headcount, and how tight the candidate market really is.
This article distils the key Q1 2026 findings and translates them into practical implications for your hiring strategy in Singapore’s current labour market.
Singapore Labour Market Q1 2026: The Headline Numbers
Singapore’s overall employment continued to expand in Q1 2026. Total employment increased by 9,400 — marking the 18th consecutive quarter of net growth since Q4 2021. The full dataset is available in the MOM Labour Market Report Q1 2026 published on the MOM statistics portal. However, the pace of growth moderated from the 17,700 increase recorded in Q4 2025, reflecting a more cautious hiring environment as global business conditions remain uncertain.
Retrenchments edged up to 3,830 in Q1 2026, from 3,690 in Q4 2025 — the highest quarterly figure since Q3 2023. Despite the increase, MOM characterised the labour market as “broadly stable”: the retrenchment incidence of 1.6 per 1,000 employees remains within non-recessionary norms. Business reorganisation or restructuring accounted for 73.8% of retrenchments; cost-cutting accounted for 9.3%.
Job Vacancies and the Vacancy-to-Unemployed Ratio
Job vacancies fell from 77,700 in December 2025 to 73,300 in March 2026, with the job vacancy rate declining from 3.1% to 2.9%. The ratio of job vacancies to unemployed persons eased from 1.58 to 1.46 — meaning there are still materially more open positions than unemployed job-seekers, but the gap has narrowed.
For context: a ratio above 1.0 generally signals a candidate-short market. Singapore’s 1.46 ratio in March 2026 means qualified candidates — particularly those eligible for Employment Passes — remain in demand. However, the direction of travel (falling, not rising) suggests employers should not assume the ease of hiring that characterised 2024 and early 2025 will persist through the end of 2026.
Sector-Level Findings: Where the Labour Market Is Tightening and Where It Is Easing
The aggregate figures mask significant variation by sector — variation that directly affects Employment Pass and S Pass approval dynamics.
Financial Services: Rising Vacancies
Financial services was one of the few sectors where vacancies increased in Q1 2026 — from 4,300 in December 2025 to 5,800 in March 2026. This is a notable divergence from the overall market trend. For employers in banking, asset management, insurance, and fintech, this data supports a more aggressive EP hiring posture: the sector is genuinely short of qualified candidates, and MOM’s COMPASS framework reflects sector-level vacancy rates in its scoring. Note that the qualifying salary for EP applicants in financial services is SGD 6,200 per month as at July 2026, higher than the SGD 5,600 applicable to most other sectors.
Manufacturing: Moderate Increase in Vacancies
Manufacturing vacancies moved from 8,000 in December 2025 to 8,500 in March 2026 — a modest increase. Retrenchments in manufacturing also rose (from 570 to 670), suggesting the sector is simultaneously restructuring some roles while recruiting for others. Employers in precision engineering, electronics, and advanced manufacturing should expect COMPASS scrutiny on whether local candidates are genuinely being considered, given the retrenchment uptick in the sector.
Professional Services: Retrenchment Alert
Professional services — which includes consulting, legal, accounting, and technology professional services — saw retrenchment increases in Q1 2026, partly driven by global firm restructuring decisions. HR teams at multinational professional service firms should be particularly alert to FCF (Fair Consideration Framework) scrutiny on EP applications: MOM monitors industries with rising retrenchments more closely to ensure employers are not replacing local redundancies with new foreign hires without adequate justification.
Who Is Being Retrenched — and What It Means for EP Applicants
Two demographic patterns in the Q1 2026 data deserve close attention from employers processing EP applications.
Degree holders saw the most notable retrenchment increase: incidence rose from 2.6 to 3.1 per 1,000 resident employees — the highest rate among all qualification groups. This is directly relevant to COMPASS scoring. When a company applies for an Employment Pass for a degree-holder role, MOM will look at whether the company has made genuine efforts to hire from Singapore’s educated resident workforce — which is currently under more retrenchment pressure than in recent quarters.
Workers aged 50 to 59 also saw retrenchment incidence rise from 2.8 to 3.1 per 1,000 employees. Companies that have recently reduced headcount in this age cohort while simultaneously applying for younger foreign hires will face closer FCF scrutiny. Ensure your job advertisements and shortlisting records demonstrate genuine, non-discriminatory consideration of all qualified candidates.
Re-entry and Short-Work Trends: What They Tell You About the Market
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 more than 60% of Singapore residents who were retrenched in Q1 2026 found new employment within six months. For EP hiring managers, this signals that the resident candidate pool is not stagnant — retrenched professionals are re-entering the market at a rising rate, which supports MOM’s expectation that employers will find local candidates for many roles.
Short work-week or temporary layoff arrangements rose for the fourth consecutive quarter, reaching 1,230 employees in Q1 2026, up from 620 in Q2 2025. This is a leading indicator of potential future retrenchments in certain sectors. Employers in sectors using short work-week arrangements should consider this when planning EP applications — a company that is simultaneously managing short work-week arrangements and applying for new EP hires may attract FCF attention.
Practical Implications for Your Hiring Strategy
For Employment Pass Applicants
The Q1 2026 data reinforces two things. First, the labour market is still broadly tight — your candidate of choice, if genuinely qualified, remains in demand, and COMPASS scoring rewards employers who are competitive on salary and local hiring. Second, MOM’s scrutiny is sharper in sectors where retrenchments are rising. If your company is in financial services or professional services, ensure your FCF documentation and COMPASS self-assessment are current before submitting EP applications. For the full COMPASS scoring framework and July 2026 renewal benchmarks, see our EP COMPASS Renewal Audit Guide.
For S Pass Employers
S Pass applications are subject to quota mathematics and levy obligations that operate independently of COMPASS. However, the overall labour market tightness — 1.46 vacancies per unemployed person — supports the case that many roles genuinely cannot be filled locally. Keep your local hiring records current and your quota utilisation within limits. From 1 July 2026, the S Pass minimum qualifying salary for new applications is SGD 3,600 per month for most sectors (up from SGD 3,300). The Complete Singapore S Pass Guide 2026 has the updated salary thresholds and quota maths.
For Foreign Professionals Considering Singapore
The Singapore labour market’s 18th consecutive quarter of employment growth, combined with a vacancy-to-unemployed ratio of 1.46, signals that the market remains absorptive of qualified foreign professionals — particularly in financial services and advanced manufacturing. If you are an EP candidate in a financial services role, the sector vacancy data directly supports your application’s legitimacy. For an end-to-end walkthrough of what MOM assesses in an EP application, the Complete Singapore Employment Pass Guide 2026 covers eligibility, COMPASS scoring, and salary benchmarks. If you are evaluating the full cost of relocating to Singapore — including relocation, housing, and tax — see our total cost model for hiring foreign professionals.
Looking Ahead: Q2 2026 and Beyond
The Q1 2026 report reflects a labour market that is growing but moderating. Employment growth is still positive, re-entry rates are improving, but the pace of hiring is slower than in the post-pandemic surge of 2022 to 2024. Global macroeconomic conditions — particularly in technology and financial services globally — are feeding through into Singapore’s professional and manufacturing sectors.
For employers, the implication is to plan EP and S Pass applications with a longer lead time. MOM processing times have generally been stable at 3 to 5 weeks for standard EP applications, but the quality of your COMPASS self-assessment and your FCF documentation will matter more in a market where MOM is watching sector-level retrenchment trends closely. Front-load your compliance work, not your approval timeline.
Little Big Employment Agency (Licence No. 19C9790) helps employers and foreign professionals navigate Singapore’s pass applications, COMPASS scoring, and FCF compliance. Contact our team for a pre-application COMPASS assessment or FCF audit. For corporate and entity-level matters — including company setup for foreign employers — visit Raffles Corporate Services.
— The Editorial Team, Little Big Employment Agency