A clear, consolidated analysis on how was 2025’s job market and what we can expect for 2026

1. How 2025 Was Overall: A Year of High Demand, High Movement, and High Pressure

2025 in Southeast Asia was defined by a shared theme across nearly every country and industry: demand surged faster than talent could keep up.

Economic conditions were strong across the region—Indonesia grew steadily, Thailand maintained one of the lowest unemployment rates globally, and Singapore held a stable 2.8% unemployment rate. The labour market stayed tight, competitive, and fast-moving.

A. Talent Demand Outpaced Supply — Everywhere

STEM-heavy industries saw the sharpest imbalance. Companies raced to hire in:

• AI & Machine Learning
• Cybersecurity
• Cloud & DevOps
• Data engineering
• Engineering & advanced manufacturing
• Life sciences & pharmaceuticals

• Renewable energy

But the talent pool simply couldn’t match the pace. The skills gap widened further, especially in tech, semiconductors, chemicals, and digital manufacturing.

Many roles stayed open for months, and reskilling/training became a strategic necessity rather than a HR initiative.

B. Salaries Climbed Across the Region

2025 salary increments averaged:

• Vietnam: ~6.7%
• Indonesia: ~6.3%
• Philippines: ~5.8%
• Malaysia: ~5%

• Singapore: ~4.4%

This wasn’t driven by generosity — employers had no choice. If they didn’t raise salaries, they lost talent to competitors.

Turnover reflected this: Singapore ~17%, Philippines ~19%, Indonesia ~20%.

2025 became the year candidates realised they could move — and they did.

C. Candidate Expectations Shifted Dramatically

2025 was the year Gen Z fully reshaped the talent market.

Candidates now demanded:

• Flexible or hybrid work
• Fast, respectful hiring processes
• Transparent pay
• Career growth and meaningful progression
• Purpose and values alignment

• Mental well-being support

Companies with slow interview cycles, unclear salary structures, or outdated workplace cultures suffered the most.

D. AI Became a Core Driver of Both Hiring and Hiring Challenges

AI adoption exploded across industries.

Companies wanted AI engineers, prompt engineers, LLM trainers, AI governance experts — but supply was incredibly limited.

At the same time, the recruitment world itself leaned heavily into AI for:

• Screening
• Candidate matching
• Chatbots
• Skills assessments

But the overuse of automation led to new concerns: fairness, bias, depersonalized candidate experience, and over-filtering.

2025 became the year the region realised: AI helps, but it cannot replace human judgement.

E. Countries Took Distinct Paths in 2025

• Singapore: Strong but selective hiring; focus on quality, specialization, and foreign talent calibration.
• Vietnam: Fastest salary and tech-sector growth; rising global tech hub.
• Malaysia: Semiconductor and cloud expansions but persistent graduate mismatch.
• Philippines: Tech and cybersecurity rose strongly; remote work demand peaked.
• Indonesia: Booming digital economy but massive tech talent shortage.

• Thailand: EV manufacturing and digital manufacturing growth; moderate wage inflation.

2. The Outlook for 2026: A Year of Reshaping, Rebalancing, and Rebuilding Capabilities

If 2025 was a year of acceleration, 2026 will be the year of alignment — aligning skills with market needs, aligning AI with governance, and aligning employer value propositions with what talent truly wants.

Below is the sharper, forward-looking outlook.

A. Skills Over Degrees — The Dominant Hiring Logic of 2026

Companies across Singapore, Malaysia, Philippines, and Vietnam are expected to shift aggressively into skills-based hiring.

2026 hiring trends will prioritise:

• Certifications
• Capstone projects
• Demonstrable technical ability
• Practical portfolios

• Soft skills (leadership, adaptability, communication)

Universities will feel the pressure. Industry-driven training programs will thrive.

B. Engineering, Tech & STEM Will Still Lead — But With Higher Barriers

Demand in 2026 rises significantly for:

• GenAI and AI safety
• Cybersecurity governance
• Cloud localization experts (due to tightening regulations)
• Robotics & automation
• Semiconductors and advanced materials

• Green energy and ESG compliance

Companies will no longer hire “generalists in tech.” They will want deep specialists who can implement AI solutions safely and at scale.

C. Regional & Remote Hiring Models Become Standard

To navigate talent shortages, companies will adopt multi-country hiring strategies:

• Singapore companies hiring in Malaysia & Vietnam
• Thai and Indonesian companies hiring remote developers from the Philippines

• Multinationals building distributed engineering teams across ASEAN

Remote-first and hybrid will stop being a perk — they become a talent magnet strategy.

D. Wage Pressures Continue, But More Controlled

Salary inflation won’t slow down meaningfully in 2026.

However, employers are moving away from reactive increments. Instead, they will focus on:

• Retention bonuses
• Structured career roadmaps
• Internal mobility

• Upskilling investments

This is the year budgets stop chasing talent and start building talent.

E. AI Governance, Compliance & Ethics Take Centre Stage

After the rapid adoption of AI in 2023–2025, 2026 becomes the year of:

• Data governance
• AI bias reduction
• Transparent recruitment algorithms
• Compliance with new data/AI laws

• Responsible automation frameworks

Companies that misuse AI or use biased algorithms will face reputation and regulatory risks.

F. The Green Transition Becomes a Major Source of Jobs

ASEAN’s push into sustainability accelerates in 2026.

Hiring will increase for:

• Carbon footprint specialists
• Waste management and recycling engineers
• Sustainable manufacturing technologists
• Green chemistry specialists

• Environmental risk analysts

Sustainability becomes mainstream — not a side project.

G. The Biggest Challenge of 2026: Capability Gaps

Across the region, these structural issues remain:

• Fresh graduates lacking industry-ready skills
• High demand for mid-level specialists with 5–8 years’ experience
• Shortage of senior leaders in AI, engineering, digital manufacturing
• Companies struggling to redesign career ladders

• Rising expectations for flexible work and purposeful leadership

2026 is the year organizations realise: you can’t hire your way out of a capability shortage — you must develop talent internally.

3. Summary: The Story of 2025 and 2026 in One View

2025 was defined by:

• Strong hiring demand
• Talent shortages and wage pressure
• Rapid AI adoption
• Increased candidate mobility
• Shifting workplace expectations
• Tight labour markets
• STEM-driven growth

2026 will be defined by:

• Skills-first hiring
• AI governance and specialization
• Regional and remote workforce models
• Renewed focus on internal mobility and retention
• Greater salary discipline with structured development
• Expansion of green and sustainability roles
• A continued shortage of mid-to-senior STEM talent