A Data-Driven Look at Singapore’s “Graduate Unemployment” Debate
- Derrick Yuen, MBA
- Sep 17
- 4 min read
Updated: Sep 18
The Headlines vs. The Big Picture
In May 2025, SkillsFuture’s latest Graduate Employment Survey sparked a wave of headlines. Employment rates for fresh graduates dipped, with private education institution graduates seeing the largest fall—an 8.4% drop in those finding work within six months. Fewer graduates secured full-time roles across all institution types, even as starting salaries continued to climb.
This has led to calls for companies to “do their part” to hire more fresh graduates and for the government to intervene. But do the numbers suggest a crisis—or is this a cyclical correction in a highly educated, globally connected economy?
1. Unemployment Is Still Low by Historical Standards
When we zoom out, Singapore’s unemployment rate tells a reassuring story. Yes, unemployment has ticked up since 2022, but overall unemployment fell to about 3% in 2024—well below the 6% peaks seen during past crises like the Asian Financial Crisis, SARS, and the Global Financial Crisis.
In other words, the economy is still operating near “full employment.” We have seen far worse, and Singapore has weathered every storm to date.
2. Youth Unemployment: High, But Not Unprecedented
Much of the concern is centered on those under 30, where unemployment is ~5.7%—significantly higher than the national average. But context matters. This level is not unprecedented; rates were similarly elevated in 2017, before COVID, the wars in Ukraine and the Middle East, and before the rise of AI reshaped the workplace.
Rather than signalling structural collapse, this may simply reflect a temporary supply-demand imbalance as graduates wait for the “right job” or the economy recalibrates.
3. Too Many Graduates, Too Few PMET Jobs?
Here is where the data gets more interesting. Over 80% of Singapore residents below 30 hold a diploma or degree, yet PMET roles account for only ~65% of the workforce. Proportionally, this suggests that we may have tipped into oversupply—producing more tertiary graduates than there are PMET roles available.
This trend is not unique to Singapore. South Korea and China are facing similar challenges:
China’s youth jobless rate (ages 16-24) has hovered around 17-19% in 2024-2025, despite massive graduate output.
South Korea’s youth unemployment looks lower (5-7%) but masks the fact that over 1.2M young Koreans remain jobless after graduation, many taking years to secure preferred roles.
4. Has Singapore’s Employment Model Reached Its Limits?
(Visualisation: Employment by Occupation)
Singapore’s answer to graduate oversupply has historically been proactive: the Economic Development Board (EDB) attracted multinational corporations (MNCs) to establish regional headquarters here, leveraging Singapore’s highly educated and productive workforce. This model created thousands of PMET jobs and supported the growth of a knowledge-based economy.
But there are signs that this model may be losing some of its lustre:
Rising Cost Pressures: Singapore’s salaries have been rising steadily, often faster than productivity growth.
Manpower Policy Shifts: Policies such as the Progressive Wage Model (PWM), mandatory flexible work arrangement (FWA) guidelines, expanded parental leave, and more “local-friendly” policies have improved workforce inclusivity but made Singapore relatively less attractive for global talent mobility, particularly for expatriates.
Regional Competition: Countries like Malaysia, Vietnam, India, and the Philippines are offering competitive cost bases and large young workforces, making them attractive alternatives for MNCs looking to optimise costs.
As a result, some MNCs are quietly relocating parts of their operations to other Asian cities, potentially reducing the number of fresh PMET jobs available for Singaporean graduates.
5. Business Sentiment and AI: The Demand Side Matters
Singapore’s business sentiment has turned negative in 2025, weighed down by global uncertainty: tariff wars, conflicts in Ukraine and the Middle East, and changing supply chains.
In this climate, companies are cautious. With AI enabling them to do more with fewer people, employers have the luxury of hiring only the best—and often prefer experienced talent over fresh graduates with higher salary expectations.
Add to this anecdotal concerns about work ethic and resilience among younger workers, and we begin to understand why graduate hiring may slow even when jobs are available.
6. Long-Term Outlook: A Silver Lining
The good news? Historically, degree holders have consistently had lower unemployment rates across all ages, suggesting that this generation of graduates will eventually find their footing as the economic storm passes.
Singapore’s workforce is also shrinking (peak working-age population was reached in 2023), which may tighten the job market over time. For patient graduates willing to be flexible now, their prospects could improve significantly in the years ahead.
7. Beyond Blame: A Call for Perspective and Adaptation
Rather than point fingers at companies or government, we might frame this as a multi-stakeholder challenge:
Graduates may need to recalibrate expectations—on salary, industry, or role—and be willing to take traineeships or adjacent opportunities.
Employers can consider broadening hiring criteria, training for potential rather than just experience.
Government & institutions can fine-tune graduate output, strengthen links to industry needs, and prepare graduates for sectors of the future (AI, green tech, advanced manufacturing). The Singapore government has already announced plans to hire new teachers as the older cadre retires; similarly PUB and LTA will need younger engineers to replace the ones who will be retiring to manage Singapore critical infrastructure.
8. The Risk of Over-Correcting
A note of caution: forcing companies to hire more fresh graduates via quotas or incentives could unintentionally displace experienced mid-career workers—those with mortgages, children, and dependents to support. A balanced approach is needed to avoid a generational trade-off.
Conclusion: This Too Shall Pass
From a macro perspective, the data suggests that graduate unemployment today does not appear unusual. Much of the current employment pressure seems to be driven by external factors — global economic uncertainty, geopolitical tensions, and shifting supply chains — factors over which Singapore has limited influence.
While the government has stopped short of calling this a crisis, history shows that each downturn is different — and yet, Singapore has consistently navigated past crises with fewer negative impacts compared to many other economies.
Still, this may be of little comfort to graduates who are currently struggling to secure employment. The good news? Many Singaporeans have lived through similar challenges before. They took jobs outside their original plans, sometimes at lower pay, and over time built richer, more resilient careers.
Having graduated twice during financial crises, I can attest that careers are rarely linear. The advice to stay flexible — about role, industry, and salary — may not just be pragmatic; it may be the smartest way to ride out this storm and eventually thrive.
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