PUBLISHED ONApril 20, 2026 1:05 PMBYSean LerBusinesses in Singapore are facing higher operating costs amid higher energy prices, but most have held off on workforce changes for now, according to a recent poll by the Singapore National Employers Federation (SNEF).
The poll was conducted from April 10 to 16, and involved 153 small and medium-sized enterprises and 57 large enterprises across the manufacturing, services and construction sector.
In the findings published on Monday (April 20), 96 per cent of the businesses reported facing increased operating costs due to higher energy prices.
Of these, 60 per cent say they face cost increases of more than 10 per cent — with utilities, fuel, materials and supplies, and air and sea freight the often cited cost components.
In their responses, businesses also highlighted that higher energy prices have a knock-on effect on their operations, such as higher costs for raw materials, supplies and logistics.
Meanwhile, respondents in the hospitality, food and beverage, and retail sectors, also reported facing upward pressure on temporary labour costs as the market adjusts to the higher-cost environment.
"Taken together, these pressures were squeezing margins, especially amid softer consumer demand," SNEF said.
But despite these pressures, 83 per cent of the businesses have not implemented workforce or workplace changes.
This suggests that most of them are exploring operational adjustments before resorting to measures that directly affect their employees, the federation said.
For the 17 per cent of businesses which have implemented workforce or workplace changes, the most common measures were hiring freezes or delayed expansion plans — with 67 per cent of such respondents indicating so.
Other measures applied by businesses which have implemented changes include staff redeployment or cross-training (33 per cent), headcount reduction through natural attrition (33 per cent), reduction in bonuses, allowances or benefits (25 per cent), and reduction in work hours, overtime or shifts (19 per cent).
SNEF said these are largely calibrated responses from employers aimed at managing costs while preserving jobs.
Businesses are also somewhat cautious about the outlook over the next six to 12 months, with 39 per cent of respondents indicating so.
Beyond cost pressures, other concerns such as disruption to global business and trade are factoring in businesses' decisions on supply chains and investments.
Asked what forms of support would be most useful should energy prices remain elevated over the next 12 months, most respondents indicated business cost support such as tax relief or financing assistance, energy cost relief and subsidies, and delaying manpower policy changes that would add further cost pressures as the top their top three priorities.
SNEF chief executive Hao Shuo noted that employers continue to be concerned over manpower costs amid escalating energy prices, which, in turn, drive up their overall operating expenses.
He said it hopes that the Government will consider the prevailing economic conditions when implementing the earlier announced foreign manpower policy change, and introduce a tiered level of support under the enhanced progressive wage credit scheme to help employers that are raising wages for their lower wage workers.
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