Fresh grads taking longer to secure jobs, retrenched workers finding it harder to land new jobs: Jasmin Lau

The decline in the re-entry rate was most pronounced among clerical, sales and service workers, tertiary-educated residents and those aged below 30.

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06 Oct 2026 05:07PM

SINGAPORE: Fresh graduates are taking longer to secure full-time jobs and retrenched workers are also finding it harder to land new jobs, reflecting the softer hiring conditions in the labour market.

Acting Minister for Manpower Jasmin Lau on Tuesday (Oct 6) said the ministry is monitoring fresh graduate employment closely, especially for the 2026 cohort, whose six-month employment outcomes will be available soon.

Ms Lau was responding to parliamentary and supplementary questions about retrenched workers, support for mature workers and fresh graduates' employment rates. Retrenchments rose to 4,620 in the second quarter of the year, the highest level since late 2020.

She pointed to the Graduate Industry Traineeships that fresh graduates who are struggling to find employment can apply for, along with career services from the Skills and Workforce Development Agency.

On retrenchments, Ms Lau said re-entry outcomes have softened, with 54.9 per cent of retrenched residents returning to employment within six months in the second quarter of the year, down from 60.7 per cent in the first three months of the year.

“While seasonal hiring patterns partly explain the decline, the re-entry rate is lower than in previous years and shows a broader downtrend,” she said.

The decline in the re-entry rate was most pronounced among clerical, sales and service workers, tertiary-educated residents and those aged below 30.

It was observed across industries, though the larger decreases were among those previously employed in manufacturing, information and communications, financial services and professional services.

“This reflects softer hiring demand in these sectors, which could contribute to longer re-entry,” she said, adding that transitioning to other sectors takes more time and effort.

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Different sectors recorded the lowest six-month re-entry rate for retrenched resident professionals, managers, executives and technicians (PMETs) from quarter to quarter.

But Ms Lau highlighted financial services as the sector that recorded the lowest rate most often over the past 14 quarters, followed by the wholesale trade sector.

Degree-holders continue to be the largest group affected by retrenchments, with the percentage increasing from 51 per cent in 2021 to 66.4 per cent in 2025.

Ms Lau said the statistics show there is “no single experience of retrenchment”.

“Some workers are able to move into new jobs relatively quickly, while others may face greater difficulties because of their skills, occupation, age, or the sector they were previously working in,” she said. 

“Some are able to find new jobs with the same or higher wages, but others may experience pay reduction.”

ONGOING REVIEW OF EMPLOYMENT ACT

Ms Lau said the Manpower Ministry and its tripartite partners are reviewing the Employment Act, including retrenchment benefits, which are not currently a statutory requirement.

The review will cover whether stronger obligations on employers are warranted.

She said around 88 per cent of employers paid retrenchment benefits to employees.

Of the employers who did not pay retrenchment benefits, one in five indicated that they had financial difficulties.

“The rest said that they did not pay due to other reasons, including the lack of an obligation to do so, or because the employee was given other forms of support, such as keeping them on payroll for an extended period or employment assistance payout,” said Ms Lau.

To strengthen compliance, the tripartite partners are considering the possibility of administrative action against employers who do not pay retrenchment benefits in egregious cases.

For example, some employers may have the financial ability to pay retrenchment benefits but refuse to despite repeated engagements and warnings.

She added that there will need to be a balance between strengthening worker protections and maintaining reasonable business costs, as some employers face genuine financial difficulties. 

“We do not want to inadvertently place more jobs at risk by imposing a rigid obligation on employers, regardless of their situation. We will provide an update on the employment review in due course,” she said.

The review also covers other support for retrenched workers, including bringing forward the Mandatory Retrenchment Notification period so that employment services can be offered at an earlier feasible time.

Ms Lau also said MOM is looking at how to better support workers who face longer transitions back into employment, including older workers and those in sectors undergoing significant restructuring.

RETRENCHMENTS AND AI, NON-RESIDENTS

Responding to a question about whether recent retrenchments were because of cyclical restructuring or AI adoption, Ms Lau said it is not clear at the moment.

This is because it is difficult to isolate the specific impact of AI adoption from broader business transformation and reorganisation.

MOM’s surveys indicate that only a small minority of firms adopting AI have reduced headcount, and more are creating new roles or redesigning jobs, she said, adding that MOM will refine its surveys and market-sensing mechanisms to monitor the impact of AI on jobs.

Regarding non-resident PMETs, Ms Lau said the likelihood of retrenchment was similar to residents, at 3.2 per 1,000 employees in the second quarter of the year.

The total number of S Pass and Employment Pass holders each declined by 900 in the April to May period this year.

“This decline was concentrated in outward-oriented sectors such as professional services, financial services, and information and communications, while resident employment in these sectors actually increased,” she said.

She added that MOM will continue to monitor labour market conditions, including employment outcomes for Singaporeans and the foreign workforce.