Building supplies firm M Metal is grappling with tough trade-offs familiar to many small and medium-sized enterprises (SMEs). Revenue is down, but managing director John Kong does not want to retrench staff amid the tight labour market.
Sales fell 15 per cent in the first quarter of the company's current financial year, compared with a year ago.
To cope, M Metal has budgeted for a lower 3.5 per cent salary increment for employees this year, down from 4.5 to 5.5 per cent in previous years.
However, if it makes losses this year, even these lower increments might have to be deferred, Mr Kong said.
"We want to keep costs down and survive in this tough market, while also retaining employees," he added.
Mr Kong holds monthly meetings with his staff of about 40 to update them on the company's performance - an approach which he hopes will give them a sense of ownership over the firm's growth, and incentivise them to work harder for more sales.
Many employers are facing the same challenges, as economic growth slows and already-thin margins come under greater pressure.
Government forecasters expect growth of between 1 and 2 per cent for the full year, in what could be the slowest year since 2009.
Despite the weaker outlook, wage growth has remained firm. Real total wages grew by 5.4 per cent last year, compared with 3.9 per cent in 2014.
Many firms, especially SMEs, already have a very lean staff count and "do not have much to retrench", said Association of Small and Medium Enterprises president Kurt Wee.
Sectors like marine and oil and gas, where takings have plunged on the back of the slump in global oil prices, have already seen significant layoffs.
But companies in most other industries are still holding on to staff.
"The situation is not as bad as during the Sars period or the financial crisis - companies are not carrying out mass retrenchments," said Mr Alvin Ang, who runs recruitment firm Quantum Leap Career Consultancy.
"But they are more selective when they hire, and are being more cautious on the whole.
"There's also fear among employees - they don't want to quit their existing jobs given the poor sentiment."
RETAILERS NOT REHIRING
Some companies - retailers in particular - have been coping simply by not replacing staff when they quit, said Mr Ang.
The sector has been one of the hardest hit by lacklustre consumer sentiment.
"The turnover for retail frontline staff is typically high. When retailers see tourist numbers are sliding, for example, they will not rehire," he noted. The staff who remain have to take on more work.
Mr Ang's own business has also been hit by the slide in hiring activity - volumes have fallen 20 to 30 per cent since January compared with the same period a year ago.
"If companies are not hiring, it directly affects my bottom line and revenue," he added.
Another sector where hiring sentiment has been hit hard is financial services, including banks, asset managers and hedge funds, said Ms Lynne Roeder, managing director of recruitment giant Hays in Singapore.
"A lot of the bigger organisations within this sector are hiring fixed-term contractors to ensure their businesses keep moving, while management wait and see what will happen to the industry over the medium term," she added.
Even as the economic slowdown weighs on hiring activity, financial institutions are also experiencing structural changes altering the way they use manpower, Mr Ang said.
Technology can help improve productivity so "two people's jobs can become a one-person job, without an increase in workload".
Ms Roeder also pointed out that not all sectors are faring badly.
"Technology and life sciences has been one of the more resilient industries. Many organisations see Singapore as a hub for growth with a large talent pool in which to hire candidates from," she noted.
More firms are also turning to freelancers or contract workers.
"Hiring contract employees to deliver immediate value, bringing proven expertise for a designated period of time is becoming a trend," said Ms Roeder.
"Recruiting temporary employees to complement permanent counterparts is seen as an effective strategy to improve productivity while keeping teams as lean as possible."
Mr Kong, meanwhile, intends to ride out the storm together with his staff. "SMEs are under tremendous pressure. We don't have financial resources. To survive in the long term, we need to look at staff as future assets, and be honest with them about how the company is doing."