SINGAPORE, Dec 8 — The current manpower crunch, resulting from border restrictions to curb the spread of Covid-19, has been one of the biggest challenges businesses in Singapore have had to deal with this year.

An annual survey from the Singapore Business Federation (SBF), which polled companies here on how the pandemic has affected their business this year and their outlook going forward, found that rising manpower costs and the lack of available manpower have emerged as among some of the top challenges.

Businesses here have also cited the need to retain or attract talent as one of their top three priorities over the next 12 months.

This was something that did not feature among the top three priorities in last year’s survey.

Despite manpower challenges, the survey found that more businesses are satisfied with the current business climate compared with last year, with more than half saying that they are no longer affected by the pandemic.

SBF’s chief executive officer Lam Yi Young said in a media briefing on Wednesday (Dec 8) said that companies have had to increase their wages to retain their staff or get others to jump ship, leading to higher manpower costs.

This is because border restrictions have made it hard for businesses to hire foreign workers who have been laid off last year when the economic impact of the pandemic was at its worst, leading to greater competition among a smaller pool of workers in Singapore.

"I think it’s very much driven by overall shortage of skilled workers in particular sectors... Companies, on one hand, are worried about rising manpower costs, but they feel they have no choice but to pay more in order to get the people they need, which then leads to even higher manpower costs,” said Lam.

"That’s why it’s of greater concern to them. They see that if it keeps spiralling this way, it can become unsustainable for businesses.”

The survey findings, released on the same day, was conducted between July 26 and Oct 1 this year and polled close to 1,100 businesses.

Priorities and challenges

Top business priorities in 2021: