Leadership at the highest level is needed to reframe human capital as a strategic issue, said Minister of State for Manpower Dinesh Vasu Dash.
Singapore workers, especially those under 35, are among the most disengaged in the region and world, which could be a “strategic liability” for the economy, according to the results of a study published on Monday (Jun 22).
Only 14 per cent of Singapore employees felt engaged in 2025, behind both the global mean of 20 per cent and regional figure of 25 per cent in Southeast Asia, according to the inaugural Singapore Workplace Report 2026 by the Singapore Institute of Directors (SID) and United States analytics firm Gallup.
Speaking at the launch of the report, Minister of State for Manpower Dinesh Vasu Dash said many organisations continue to treat human capital as a human resources function rather than a matter for strategic discussion.
This framing may be a “strategic liability”, he said.
“Reframing human capital as a strategic issue requires leadership at the highest level. When human capital is treated with the same rigour and discipline as financial capital, for example, organisations make better decisions about their people, and these better decisions then translate directly into better long-term performance.”
Workplace engagement in Singapore has hovered around the same level since dipping in 2019.
By comparison, in 2025, workplace engagement measured 9 per cent in Vietnam, 25 per cent in Malaysia, 27 per cent in Indonesia and 34 per cent in Thailand.
The study defines employee engagement as how involved and enthusiastic employees are at work. To determine how engaged a worker is, researchers asked how far they had their basic needs met, chances to contribute, a sense of belonging and opportunities to learn and grow.
Managers were identified as the greatest driver of employee engagement, but researchers found that investment and support to build their capabilities was lacking.
The SID and Gallup report said Singapore’s “chronically low engagement” may increasingly become a “strategic liability” that inhibits the economy’s future competitiveness.
This is even more important for Singapore as its economy is highly services-oriented, and the impact of worker engagement is greater in service-intensive industries, the report said.
Disengagement at work likely costs Singapore’s economy billions of dollars annually, added the report. It cited a cost of US$10 trillion (S$13 trillion) to the global economy from lost productivity due to low engagement in 2025, or about 9 per cent of global GDP.
Mr Dinesh stressed that good jobs and engaged workplaces are built deliberately.
The dimensions of good jobs set out strategic directions for organisations, while measures of employee engagement allow firms to find opportunities to do more to bring out the best in their workers, he said.
Engagement benefits both workers and employers, and for Singapore, an engaged workforce can be a powerful engine of sustained economic growth and social cohesion, he said.
Gallup’s 2025 survey of employee engagement in Singapore was conducted through phone interviews with about 1,000 workers between June and July last year.
Singapore’s workplace engagement numbers were calculated on a three-year rolling average, while the global and regional figures are based on a single year.
GENERATIONAL DIVIDE
A generational gap is also evident in Singapore as younger employees under 35 felt less engaged and more negatively at work than older employees aged 35 and above.
While global generational differences follow a similar pattern, the generational split in Singapore is greater, with a six percentage point difference in engagement.
“Singapore’s generational discussions often give rise to unhelpful character generalisations. Younger employees are frequently described as entitled, fragile or insufficiently committed to their employer and career progression,” said the report.
Under-35 workers lagged behind older workers in levels of thriving at work. More of them experienced negative emotions, including a 16 percentage point lead over older workers when it came to stress on a daily basis.
Late millennial and Gen Z employees are sometimes labelled the “strawberry generation”, but the reality is more complex, the report added.
“The generational split is real and not imagined, and consequently, Singapore’s employers need to respond to the unique needs of younger employees.”
The report also included insights from up to 17 senior leaders of public and private sector organisations in Singapore.
Most of them described the generational differences in terms of reactions to structural economic and labour market conditions, rather than differences in character.
“For example, some leaders mentioned factors that impact young people more than older, established employees, like Singapore’s high cost of living, national service obligations, growing job and career uncertainty, and a new perspective on personal and professional success,” said the report.
But a “large minority” of the leaders were concerned about what they saw as reduced ambition among younger employees.
This was expressed most strongly by executives in logistics and professional services, where long hours and weekend availability have in the past been “non-negotiable employee requirements”, the report said.
REASONS FOR LOW ENGAGEMENT
Researchers interviewed the senior leaders about how they view artificial intelligence. Most were confident that their organisations can realise the value of the technology while managing its risks.
“However, leaders were less optimistic about the future direction of Singapore’s workforce, perhaps indicating low confidence in the preparedness of the country’s employees to adapt to disruptive forces such as AI adoption,” said the report.
The leaders also expressed concern about the friction that arises when employees are asked to use generative AI tools, but at the same time believe that successful deployment of these tools could reduce the need for their roles.
“In this context, the rational response is to resist AI rather than embrace it,” said the report.
Many of the senior leaders attributed low employee engagement to external factors like global market forces, challenging economic conditions or labour market policy, said the report.
Some also attributed it to the high proportion of family-owned small- and medium-sized enterprises (SMEs) in Singapore.
SMEs employ about 70 per cent of Singapore’s workforce.
“If you look at the employment landscape, it’s largely SMEs and family-owned companies. Sixty-two per cent or so of our listed companies in Singapore are family-owned … If you have a tycoon or some first- or second-generation guy, he’s not going to have all these best practices,” one unnamed executive was quoted as saying.
