Singapore employers are putting AI higher on the corporate agenda — just as many become more cautious about pay.
Forty-eight percent of employers named exploring, adopting or enhancing AI as a workforce priority for 2027, up from 39% for 2026, according to the Singapore National Employers Federation. At the same time, 51% plan to moderate or freeze wages next year, up from 48% for 2026.
Separate Ministry of Manpower data released April 30 shows adoption remains early across much of Singapore’s private sector: 71.5% of establishments surveyed had yet to begin adopting AI. MOM studied private-sector establishments with at least 10 employees, while SNEF surveyed more than 300 companies employing nearly 160,000 workers across 20 industries between June and August about their 2027 workforce outlook.
AI moves up as labor costs bite
Rising labor costs are helping shape that agenda. In the Sept. 3 SNEF survey, 83% of employers identified manpower costs as their top workforce challenge, up from 79% in 2025. Another 30% cited rising upskilling and reskilling costs.
Hiring plans do not point to a broad retreat from workers. Forty percent of employers plan to increase headcount in 2027, 54% do not expect to increase it, and 6% plan reductions. Attracting suitable talent remains the top HR priority, cited by 59%.
MOM’s findings show how uneven AI adoption remains. Among establishments surveyed, 7.4% were planning AI adoption, 6% were piloting it and 3.8% had integrated AI into core processes. Adoption ranged from 23.9% among firms with fewer than 25 employees to 76.4% among those with more than 500.
The pressure to prove value extends across the region. APAC companies are increasing AI spending faster than many can demonstrate returns, with an August KPMG survey finding that only 5% had established ROI backed by demonstrated business outcomes.
Cost and skills slow deployment
Implementation costs and expertise remain the most common obstacles. MOM found that 44.9% of establishments cited high implementation costs and 42.4% pointed to a lack of in-house expertise. Smaller firms were more likely to report problems with AI strategy and trust, while larger organizations more often cited integration complexity and data security.
Where AI is already in use, the workforce impact has leaned more toward productivity and job redesign than widespread displacement. Among firms using AI, 70.7% reported improved worker productivity; 18.9% redesigned roles and 13.9% created AI-related jobs, compared with 6.2% that reported reducing headcount after adoption. Separate US research has also linked intensive generative AI adoption to higher headcount, offering a broader comparison rather than evidence about Singapore employers.
Singapore’s regional role also affects the enterprise picture. Singapore and Thailand recently expanded cooperation on AI, talent development and digital trade as both prepare for successive ASEAN chairmanships in 2027 and 2028, adding cross-border skills, governance and interoperability issues to local adoption decisions.
Domestically, the Enterprise Workforce Transformation Package supports job redesign, reskilling and organizational capability-building tied to AI adoption. For IT and HR leaders planning for 2027, the next test is whether employers can convert that investment into measurable gains while managing cost, skills, integration and security constraints.
Read more: Singapore’s AI skills market is already becoming more regional, as Chinese technology companies compete for Singapore-trained AI talent with large pay packages.
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