Fresh graduates may need to adjust salary expectations amid economic uncertainty: Analysts
Around one in three university graduates rejected job offers as the wages were too low, according to a survey conducted by the manpower ministry in 2025.
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SINGAPORE: Fresh university graduates may need to moderate their salary expectations as wage growth this year is expected to vary across sectors amid global economic uncertainty, said analysts.
This comes after findings from the Ministry of Manpower (MOM)’s School-to-Work Transition Study showed that graduates across most disciplines earn less than they had expected when entering the workforce.
The survey, conducted in 2025, polled about 2,500 Singapore resident graduates aged 22 to 28 who held at least a bachelor’s degree.
It examined employment outcomes and early career experiences, including salary expectations, to better understand how graduates transition from education to employment.
According to the study, the most common reason university graduates turned down a job offer was low pay, with 30.6 per cent of respondents saying so.
Meanwhile, about a quarter – or 26.7 per cent – said they were waiting for a better offer.
Other reasons included a lack of interest in the role, an unsuitable work environment, and limited opportunities for career advancement.
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Analysts said the findings reflect the priorities of young jobseekers today.
“I think it speaks of the fact that they are all very pragmatic – in other words, quite realistic overall,” noted Professor Lawrence Loh from the NUS Business School.
He added that the rising cost of living may be influencing graduates’ expectations.
“Also, for graduates, it is very important to start at the point as high as possible, because sometimes wages are sticky … To get (an) increment is quite difficult, so when your starting point is high, it’s easy to move upwards,” said Prof Loh.
EARNING LESS THAN EXPECTED
Graduates in most fields earned less than they had anticipated, the MOM survey found.
Among information technology graduates, their median monthly salary was S$5,150 (US$4,020), compared with an expected salary of S$6,000.
Engineering sciences graduates earned a median of S$4,450 – below their expected S$5,000.
The gap was also significant in business and administration, where graduates earned a median salary of S$4,000 against expectations of S$5,000.
For natural and mathematical sciences graduates, median wages stood at S$3,700, compared with an expected S$5,000.
Only graduates in law, education, as well as fine and applied arts reported salaries that met or exceeded expectations.
In response to CNA’s queries, an MOM spokesperson said the salary expectations data was collected directly from respondents, then presented alongside observed median salaries, to “provide context on how expectations compare with actual outcomes across different fields of study”.
“The comparison against median salaries also reflects updated salary trends. From 2024 to 2025, median salaries have generally increased in most fields,” the spokesperson added.
Nevertheless, Prof Loh said he expects the gap between graduates’ expected and real salaries will be reduced in the coming years due to the more challenging job environment.
“(Now), even getting a job is difficult, particularly with the broader uncertainty in the global economy and with … artificial intelligence,” he pointed out.
“I think our graduates have no choice but to be more realistic and have their expectations match what is actually being offered in reality.”
MORE CHALLENGING HIRING ENVIRONMENT
While MOM expects wages to continue rising this year, it has cautioned that employers are likely to be more conservative with salary increases due to global uncertainty and inflationary pressures.
Nominal wages of full-time resident employees grew at a slower pace in 2025 than in the previous year, according to the latest MOM data released last Thursday (May 28).
Analysts said this could require graduates to recalibrate their expectations or risk prolonging their job search.
According to Mr Anurag Garg, country lead at recruitment firm Michael Page Singapore, unrealistic salary expectations could create challenges for both jobseekers and employers.
“On the candidate’s side, they may feel a little bit more frustrated because the job search is longer, they may risk missing out on an opportunity if their expectations are unrealistic. They may not get a second chance at this opportunity.”
“And from the employer side, they are all trying to go after the best candidates, so they may suffer from higher offer rejection rates, they may have a frustration that it’s taking them longer to hire.”
Mr Garg added that prolonged mismatches between expectations and available opportunities could contribute to underemployment, where workers take on roles that do not fully utilise their skills.
This could have implications for hiring timelines and how quickly young workers enter the workforce, noted Mr Garg.
“This is slightly concerning, because it signals a structural expectation gap and not something which is temporary. Employers may feel (they) are quite competitive … but candidates clearly don’t agree. So, this may lead to longer job searches,” he cautioned.
“It may lead to misunderstanding between the employer and the candidate, and also talent misallocation.”
Source: CNA/lt(dn)
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