PHL companies projected to raise worker salaries by 5.6% in 2022
Companies in the Philippines are expected to raise the salary of employees by an average of 5.6% next year, as the economy is seen to rebound from the coronavirus pandemic, according to a Willis Towers Watson report.
In its latest Salary Budget Planning Report, Willis Towers Watson said companies in the Philippines are looking to hike salaries of employees amid challenges hiring new workers and retaining the current workforce.
Next year’s projected pay rise of 5.6% will be higher than the 5% average salary increase actually implemented this year.
This is also above the 5.3% average salary rise projected by companies in the Asia-Pacific for 2022, while countries in Western Europe and North America expect salaries to remain flat.
Willis Towers Watson data showed Philippine firms involved in medical technology (MedTech) are seen to give the biggest average raise at 7.3% in 2022, after raising wages by an average of 5.7% this year.
Construction, property and engineering companies are projected to increase salaries by 6.2% versus 4.8% this year.
Firms involved in pharmaceutical and health services, and business support services, including business process outsourcing, are looking to hike salaries by an average of 6.1%.
On the other hand, firms in energy and natural resources are only expected to raise salaries by 4.7% in 2022, while insurance firms will increase pay by 4.8%.
“Although there is a positive outlook among businesses, companies are also monitoring the Philippine economic landscape, hence, organizations may further adjust their 2022 salary budget forecast in the later part of this year,” Rewards, Data and Software Practice Leader of Willis Towers Watson Philippines Chantal Querubin said.
Nearly half of companies in the Philippines expect their business performance to be in line with targets this year, the report showed.
Organizations are also looking to create more jobs in sales, information technology and engineering in the next 12 months, Willis Towers Watson said.
The survey also showed 65.3% of companies will keep their headcount in the next 12 months, while 25.8% are planning to add more employees and 8.9% are seeking to cut jobs.
“Companies are between a rock and a hard place when it comes to compensation planning. On the one hand, employers need to continue effectively managing fixed costs as they rebound from the pandemic. On the other hand, companies recognize they need to boost compensation, especially in sectors where there may be a manpower crunch,” Ms. Querubin said.
Foundation for Economic Freedom President Calixto V. Chikiamco said the projected pay increase is possible for some companies “which did well during the pandemic” such as those in the telecommunications, information technology companies, and food and beverage industries.
With inflation hovering near 5% with fuel and food prices expected to escalate, Mr. Chikiamco said some companies may feel compelled to give workers an increase to just keep up with inflation.
However, enterprises that were badly hurt by the pandemic “would likely be unable to increase pay, or even 13th month pay,” he added.
Willis Towers Watson conducted the survey between April and June this year, covering 1,405 companies representing a cross section of industries from 13 markets in the Asia-Pacific region. In the Philippines, 266 companies participated.