Projections this year show 82.4% of companies in the Philippines increasing salaries with fewer implementing salary freezes, signaling employers optimism for this year
As countries in the Asia Pacific continue to navigate the COVID-19 pandemic, employers in the Philippines are projecting pay rises this year at an average of 5.6%, according to Willis Towers Watson (WTW)’s latest Salary Budget Planning Survey report.
Last year, companies were forced to revise down their pay rise budgets, leading to an average increase of 5.5% in 2020 (compared to 6.0% of actual salary increase in 2019). This is the lowest average salary increase for the Philippines in more than a decade. In the Asia Pacific, companies in 13 out of the 20 markets have also decreased their 2021 average salary increase forecasts
“After a difficult year for employers and employees – battling lockdowns, employee safety issues, working from home and declining revenues – many employers are finding ways to handle the crisis better, manage their businesses, and help their employees with a more focused work and reward strategy,” said Patrick Marquina, Head of Talent and Rewards, Philippines, at WTW.
The number of companies expecting to freeze pay is expected to decrease sharply this year, in a further sign of cautious optimism for 2021. Last year saw over a quarter (28%) of private sector companies in the Philippines freeze pay increases as they were curtailing costs. This is expected to fall to 13% of companies this year with 82.4% of companies expecting to conduct a salary review (vs 61% in 2020).
Different industries have experienced differing fortunes during the pandemic, and that is reflected in anticipated pay rises for 2021. The most optimistic industries are Pharmaceutical and Health Sciences, High Tech, Electronics Manufacturing, and Business Support Services, including Business Process Outsourcing with a 2021 salary budget increase forecast of 5% or more. These industries will continue to see an increase in demand for talent as employers in these sectors prepare for growth and development opportunities in 2021.
“While there is certainly more optimism this year in both employers and employees alike, the recovery for many hard-impacted businesses would not be smooth sailing. Companies will continue to experience smaller salary budgets this year. Therefore, it is important for employers to differentiate their allocation of pay rises, so that they can provide meaningful salary increases for their best and most valuable talent, and prioritize spending on jobs that are likely to contribute the most to the success or survival of their businesses”, added Patrick.
ABOUT THE REPORT
The Salary Budget Planning Report is compiled by Willis Towers Watson’s Data Services Practice. The survey was conducted online in October/November 2020, receiving over 18,000 sets of responses covering over 130 countries worldwide. In the Philippines, a total of 233 companies participated across different industries. The report summarises the findings of Willis Towers Watson’s annual survey on salary movement and reviews practices as a means of helping companies with their compensation planning for 2020 and beyond.
ABOUT WILLIS TOWERS WATSON
Willis Towers Watson (NASDAQ: WLTW) is a leading global advisory, broking, and solutions company that helps clients around the world turn risk into a path for growth. With roots dating to 1828, Willis Towers Watson has 45,000 employees serving more than 140 countries and markets. We design and deliver solutions that manage risk, optimize benefits, cultivate talent, and expand the power of capital to protect and strengthen institutions and individuals. Our unique perspective allows us to see the critical intersections between talent, assets, and ideas — the dynamic formula that drives business performance.