EMPLOYERS in the Philippines expect to raise salaries by an average of 5.6% this year — the slowest pace in over a decade — as companies remain cautiously optimistic amid the coronavirus crisis, global advisory company Willis Towers Watson (WTW) said in a report.
Citing its latest Salary Budget Planning Survey report released on Monday, WTW said 82.4% of 233 companies surveyed in the Philippines will be raising their employees’ salaries this year.
This year’s projected average 5.6% pay rise will be lower than the actual 5.7% hike in 2020 and the 6% increase in 2019.
For the past 10 years, the average salary increase hovered around 6%, but the pandemic forced companies to be more “modest in budget planning” this year, Patrick V. Marquina, head of talent and rewards for the Philippines at WTW said in an e-mail.
“While some businesses may be picking up, most companies remain cautiously optimistic hence are more modest in their salary budget planning.”
In Asia-Pacific, companies in 13 out of the 20 markets have lowered their 2021 average salary hike projections.
The findings were based on a survey of 233 firms in the Philippines as part of a broader survey across 130 nations worldwide to track the latest salary movement and review practices of companies. The responses were collected online from October to November 2020.
Fewer firms will implement a salary freeze this year according to WTW. Only 13% of companies surveyed said they will suspend any wage increases for the time being, against the 28% seen last year.
WTW said the survey results indicated the private sector’s “cautious optimism” for 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,” Mr. Marquina was quoted as saying in a press release.
Firms that increased their salary budget forecasts for the year are in the health, technology, electronics and outsourcing sectors, which experienced a surge in demand amid the global health crisis.
WTW noted companies in pharmaceutical and health sciences, high-technology, electronics manufacturing and business support services, which include business process outsourcing, gave an at least 5% increase in their salary budget forecasts for the year.
Meanwhile, businesses related to consumer products and retail; energy and natural resources; and financial services were more “conservative in their salary budget plans” than the rest, according to Mr. Marquina.
“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,” he said.
“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,” he added.
Business closures and quarantine protocols last year forced companies in hard-hit sectors to cut wages and lay off employees. — Beatrice M. Laforga