The Singapore National Employers Federation (SNEF) reaffirms our strong support for the National Wages Council (NWC) 2025/26 Guidelines. The guidelines provide a clear framework for employers to align wage increases with productivity growth to build sustainable businesses. 

Aligning Wage Growth with Productivity 

2 SNEF strongly supports the principle that wage growth must be backed by productivity gains. This alignment ensures that businesses remain competitive to deliver long term growth that ultimately benefits workers. Over a longer period from 2016 to 2024, overall labour productivity grew by 2.5% per annum while real income (mean) grew by 1.3% per annum, which provides a basis for healthy wage growth. SNEF encourages employers to share the profits and gains from labour productivity improvements with their employees. 

3 To enhance wage flexibility and business resilience, employers are strongly encouraged to adopt the Flexible Wage System (FWS) in full, including both the Annual Variable Component (AVC) and Monthly Variable Component (MVC), to manage costs in downturns and reward performance in upturns. Employers are also encouraged to regularly review market benchmarks and adjust wage ranges to remain competitive. When considering a quantum wage increase, employers should factor in the CPF monthly salary ceiling increase from $7,400 to $8,000 from 1 January 2026, and the 0.5%-point rise in employer CPF contribution rates for workers aged above 55 to 65. 

Uplifting Lower-Wage Workers  

4 To uplift Lower-Wage Workers (LWWs) through wage growth, the Progressive Wage Credit Scheme (PWCS) which was enhanced at Budget 2025, will co-fund 40% of qualifying wage increases in 2025 and 20% in 2026. The PWCS provides transitional support to businesses in the near term, while giving employers time to invest in upskilling employees and improving firm-level productivity so that the wage increases are sustainable in the long term. 

5 We appreciate that the NWC recommendations for LWWs considered the uncertain economic outlook ahead and the guidelines also included the historical median income growth of 4.2% p.a. between 2016-2024 as an additional reference for employers. SNEF would also like to reiterate that the recommendation of a built-in wage increase of 5.5% to 7.5% of gross monthly wage applies specifically to LWWs and not to the broader workforce.  

6 SNEF supports the updated Occupational Progressive Wage (OPW) job ladders and job descriptions for administrators and drivers by the NWC to keep pace with digital transformation, alongside modest wage increases from July 2026 to June 2028 in view of the uncertain economic conditions ahead. Employers should continue to implement productivity measures for transformation to ensure meaningful uplifting of OPW jobs and sustainable wage increases.   

Driving Workforce Transformation 

7 With the rise of artificial intelligence (AI), employers are encouraged to redesign jobs, adopt technology, and invest in upskilling employees to boost productivity. Employers can tap on Government schemes and subsidies such as SkillsFuture Singapore (SSG) training subsidies and the Company Training Committees (CTCs) initiative to upskill or reskill their employees. The upcoming SkillsFuture Workforce Development Grant (WDG) in Q1 2026 will further aid job redesign and workforce transformation. Beyond that, employers can also leverage SNEF’s Corporate Learning Centre courses and SNEF-administered Career Conversion Programmes, Job-Skills Integrator for Retail (JSIT-R) and the Structured Career Planning and Structured Career Conversation workshops to continue upskilling and reskilling their employees.  

Concluding Remarks 

8 SNEF President Mr. Tan Hee Teck said: “The rise of artificial intelligence and other disruptive technologies will reshape jobs and business models across sectors. Employers must act decisively to redesign work, reskill their workforce, and build capabilities to harness these technologies responsibly. By aligning wage growth with productivity gains, supporting lower-wage workers, and embracing workforce transformation, we can build a more resilient and competitive Singapore. I urge all employers to work closely with SNEF and our tripartite partners to implement the NWC Guidelines and prepare our workforce for the future.” 

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About Singapore National Employers Federation  

The Singapore National Employers Federation (SNEF) is a trade union of employers. Our mission is to advance tripartism and enhance labour market flexibility to enable employers to implement responsible employment practices for sustainable growth. SNEF has a membership of more than 3,900 companies with around 870,000 employees. For more information, please visit www.snef.org.sg.