Philippine-based companies are optimistic about their businesses next year as employers plan to expand the average salary budget by 5.6 percent by 2022, the latest survey of global advisory, broking, and solutions company Willis Towers Watson said.
The projected salary increase in the country next year is higher than the forecast average increment in the Asia Pacific at 5.3 percent.
The estimated hike rate in the Philippines is higher than the rates of salary increase in Asia Pacific economies such as Japan at 2.5 percent, Australia at 3.4 percent, Taiwan at 3.5 percent, Hong Kong at 3.6 percent, Singapore at 3.7 percent, South Korea at 4.1 percent, Thailand at 4.6 percent, and Malaysia at 5 percent.
Companies in China are expected to further increase salaries to employees by 5.9 percent, Indonesia by 6.5 percent, Vietnam by 7.4 percent, and India by 8.8 percent.
“Pay rises are making a comeback. Companies in the Philippines plan to give employees higher increases next year as they recover from the economic fallout of the pandemic and face mounting challenges in attracting and retaining employees,” Willis Towers Watson said in a statement Monday.
The company cited industries that reported the highest average salary budget increments which include medical technology, business support services including business process outsourcing, and manufacturing.
“On business outlook, close to 51 percent of companies in the Philippines expect their business performance to be in line with target while 43.8 percent expect it to be ahead of target this year,” it added.
Of the surveyed firms, 65.3 percent said they plan to maintain their headcount for the next 12 months, 25.8 percent said they will add employees, and 8.9 percent will reduce the number of their employees due to the impacts of the pandemic on their businesses.
The survey showed that firms are likely to create more jobs in functions such as sales, information technology, and engineering in the next 12 months.
“Companies recognize the need to boost compensation, especially in sectors where there may be a manpower crunch. This situation has driven organizations to explore alternative options to fixed pay increases, including sign-on, retention bonuses, functional and skill premiums, mid-year adjustments or pay increases,” Willis Towers Watson Philippines Rewards, Data & Software Practice Leader Chantal Querubin said.
Querubin said the work condition amid the pandemic pushes employers to deliver “a sound employee value proposition” and provide a total rewards program.
“Beyond competitive salaries, which are table stakes at the moment, companies also need to focus their spending on a diverse set of benefits, wellbeing, and upskilling programs to drive employee engagement,” she said.