Of the firms it surveyed in December, 64.6 per cent said they plan to hire in the next three months, and 25.3 per cent said they plan to give raises. Both figures were a climb down from September.

“With fewer firms planning to raise wages in the next three months, the risk of an ensuing wage-price spiral remains low,” it said.

Randstad’s regional managing director for permanent recruitment, Ms Jaya Dass, said: “Back in 2021, many companies actively hired new headcount as part of ‘revenge hiring’ to meet business demands.”

The tapering towards the end of 2022 was a reset towards “equilibrium”, and she expects to see the trends in the report continue from now to June.

Ms Betul Genc, Singapore country manager at human resource consultancy Adecco, said that last year, employers were dangling salary raises to woo talent in a tight labour market. There were “more than two job positions available for every unemployed person,” she added.

The market has now reached a more steady state. Redundancies totalled 6,450 in 2022. This compares with 8,020 in 2021, 10,690 in 2019 and 10,730 in 2018.

On a quarterly basis, the last three months of the year turned in a fifth consecutive quarter of growth with 47,400 new jobs added, according to the preliminary estimates.

Unemployment remained below 2019 levels, ending at 2 per cent in December. This was helped in part by a pickup of local hires by stores and restaurants to cope with the festive season.

About 3,000 workers were retrenched during the quarter ended Dec 31, 2022, compared with the 800 to 1,300 layoffs during the previous three quarters, the report showed. In 2019, quarterly redundancies ranged from 2,320 to 3,230. 

The electronics, information technology and wholesale trade sectors let go the most workers, compared to other sectors, which mostly remained stable. Business reorganisation or restructuring was the often cited reason.

But the labour market could face headwinds in the coming quarters, said MOM.

It added: “The projected slowdown in economic growth in 2023 would likely ease the momentum of labour market improvements. With the recent uptick in retrenchments, unemployment rates could also trend higher.”

Mr Barnabas Gan, senior economist at RHB Singapore, forecast that the unemployment rate will rise to 2.4 per cent by June, before recovering to 2 per cent at the end of this year.

Mr Jansen Gwee, founder of recruitment portal OppTy, said he expects bricks-and-mortar businesses such as retail, dining and wellness to be actively hiring throughout this year.

Even though growth is likely modest, he said, these businesses still rely on workers to provide services.

Hiring in the e-commerce and tech start-up sectors will slow, he added.

“We are seeing an uptick of companies coming to us because they wish to outsource their digital marketing, content writing, and even coding and app development to remote staff overseas to save hiring costs.”

Pay rises and hiring will moderate this year, said Ms Genc.

She advised: “Candidates are encouraged to be flexible in expectations amid these shifts in the workforce, workday and workplace. Be open to opportunities regardless of temporary, contract or permanent roles, as it helps with gaining new skills and experience.”