KEY HIGHLIGHTS
- SNEF wants more flexible foreign manpower rules and stronger AI support in Budget 2026
- SMEs face hiring freezes, rising costs, and uncertainty despite GDP growth
- Proposals focus on cost relief, senior workers, and practical AI adoption
That’s the message from the Singapore National Employers Federation (SNEF), which has submitted seven key recommendations for Budget 2026, calling for more flexible foreign manpower policies and stronger support for AI adoption.
Honestly speaking, this isn’t about expansion anymore.
For many firms, it’s about survival and restructuring.
SNEF Budget 2026
| Key Pressure Point | What Employers Are Facing | What SNEF Is Asking For |
|---|---|---|
| Foreign manpower | Tighter quotas, higher qualifying salaries | Temporary quota flexibility, cross-deployment options |
| Business costs | Rising wages, CPF, rent, utilities | Continued cost relief, targeted SME support |
| Older workers | Higher wage & healthcare costs | Extend Senior Employment Credit, CPF offsets |
| AI adoption | Unsure where to start, high training cost | Plug-and-play AI tools, training subsidies |
| Training & skills | Lean teams can’t spare staff | Absentee payroll funding, longer programme support |
Business outlook: Growth is up, confidence is not
Yes, MTI upgraded Singapore’s 2025 GDP growth forecast to around 4%.
But on the ground, it’s uneven.
SNEF’s latest surveys show 72% of employers feel uncertain about 2025 prospects — up from 58% in 2024.
More worrying?
Many are planning hiring freezes and wage moderation in 2026.
For SMEs especially, cost pressure is stacking up fast.
Rising costs are squeezing employers hard
Employers flagged rising expenses across the board:
- Employee salaries
- CPF contribution increases
- Rentals
- Utilities
SNEF is pushing for continued broad-based cost relief, with extra help for SMEs, especially on rental and utility costs.
For heartland businesses, this is no small issue.
Foreign manpower flexibility: “We can’t fill key roles”
During employer engagements, one pain point kept coming up.
Key roles remain unfilled.
Reasons include:
- Tighter foreign manpower rules
- Rising qualifying salaries for S Pass and Employment Pass holders
- Ongoing local manpower shortages
SNEF proposes greater flexibility for employers who adopt progressive employment practices, such as:
- Structured flexible work arrangements
- Programmes to hire and retain senior workers
Possible measures include temporary quota adjustments or cross-deployment under the Manpower for Strategic Economic Priorities Scheme.
Worth it or not?
For many firms, this could mean keeping operations running.
Managing manpower costs without cutting jobs
To keep manpower costs manageable, SNEF also suggested:
- Expanding approved source countries for Work Permit holders
- More sector-specific sub-quotas for industries facing severe shortages
- Slowing the pace of qualifying salary increases for S Pass and EP holders
The aim is simple:
Give businesses breathing space while protecting local jobs.
Supporting older workers — without breaking the bank
Singapore’s workforce is ageing.
That’s reality.
But hiring senior workers comes with higher costs, especially for SMEs.
SNEF wants:
- An extension of the Senior Employment Credit (SEC) beyond 31 Dec 2026
- Tiered co-funding, with more help for SMEs hiring lower-wage senior workers
Currently, the SEC supports employers hiring Singaporeans aged 60 and above earning under S$4,000 monthly.
SNEF also called for the CPF Transition Offset to continue beyond 2026, as CPF contribution rates rise again from January 2026.
Training sounds good — but who covers the downtime?
Many employers agree training is important.
The problem is time and manpower.
For lean teams, sending staff for long courses means operational disruption.
SNEF’s suggestions include:
- Extending support duration for Career Conversion Programmes
- Absentee payroll funding
- Study leave reimbursement for intensive training
No need to overthink — if downtime costs are covered, more bosses will say yes.
AI adoption: Excited, but unsure where to start
AI is everywhere.
But many SMEs are still stuck at step one.
Common concerns include:
- High cost
- Lack of internal expertise
- Uncertainty about suitable tools
SNEF proposes:
- Support for simple, plug-and-play AI tools
- Expanded AI grants that cover employee training and reskilling
- Workforce-wide AI literacy, technical skills, and responsible AI use
For most Singaporeans, this isn’t about fancy tech.
It’s about doing things faster, cheaper, and smarter.
Progressive wages and workplace support still matter
With the Progressive Wage Model expanding and wage floors rising, SNEF wants:
- The Progressive Wage Credit Scheme extended beyond 2026
- Continued co-funding to help employers meet wage commitments
They also proposed more short-term staffing support, especially for sectors with limited flexibility, to cover:
- Workplace safety requirements
- Mental well-being initiatives
- Workplace fairness practices
Frequently Asked Questions
What is SNEF asking for in Budget 2026?
SNEF is calling for more flexible foreign manpower policies, extended wage and CPF support schemes, and stronger help for AI adoption and training.
Will foreign worker quotas increase in Singapore?
SNEF is not asking for permanent increases, but temporary flexibility and sector-specific adjustments for firms facing severe manpower shortages.
How does this affect SMEs in Singapore?
If adopted, SMEs could see lower manpower pressure, better cost support, and easier access to AI tools and training subsidies.
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