salary increase survey

Philippine Salaries Increase Amidst Economic Uptrend

Summary

Philippine companies anticipate a 6.2 percent median salary increase in 2024, driven by the demand for skilled professionals and the need to stay competitive in a fierce job market, as reported by Mercer's Total Remuneration Survey. This surpasses the Asian average and underscores the country's resilience and growth potential despite global uncertainties.

In response to the persistent challenges posed by inflation and an increasingly competitive job market, Philippine companies are gearing up to implement a median salary increment of 6.2 percent for their employees in 2024. This projection comes from a comprehensive survey conducted by global professional services firm Mercer, as reported on January 5, 2024.

Mercer’s Total Remuneration Survey 2023 highlighted several factors contributing to the projected salary increase. Firstly, the rising demand for skilled professionals, the need to attract and retain top talent. This is particularly in industries such as shared services and outsourcing, retail, and the consumer sector, as they are key drivers. Mercer Philippines Business Leader, Floriza Molon, noted that despite global headwinds, the Philippines is poised for economic growth.

Energy sector likely to see highest increase

Industries such as energy, high tech, retail & wholesale, and consumer goods are expected to lead in salary increases, with the energy sector projected to experience the highest increase at seven percent. Mercer emphasized the importance for companies to reassess their total rewards programs, focusing not only on compensation but also on employee benefits and work experience.

Interestingly, the 6.2 percent median salary increase in the Philippines exceeds the average in Asia, reflecting the varying pay progression between emerging and developed economies in the region. India, Vietnam, and Indonesia are expected to have the highest median salary increments for 2024, while Japan, Taiwan, and Hong Kong SAR are anticipated to have the lowest.

5.7% median salary increase projected overall for 2024

Building on this, a recent compensation survey by WTW, a global advisory, broking, and solutions company, reported additional insights into the salary landscape in the Philippines. The survey emphasized the competitiveness of annual base salaries in industries such as BioPharma and Life Sciences, Financial Services, and Shared Services & Outsourcing, outperforming those in Real Estate, Construction & Engineering.

As companies in the Philippines project an overall median salary increase budget of 5.7 percent for 2024, concerns over a tight labor market and inflationary pressures persist. WTW’s survey underlines that employers face significant talent challenges, with voluntary turnover and attrition reaching 15.9 percent in 2023. Key reasons for employee turnover include better pay and growth opportunities, relocation or family migration, and flexible work arrangements.

Patrick Marquina, Head of Work & Rewards, Philippines, WTW, stressed that winning the talent race demands a holistic approach to rewards, both monetary and non-monetary. With millennials and Gen Z forming a significant portion of the workforce, employers are urged to adapt to changing work dynamics, optimize organizational structures, and forecast people resources needed to operate.

Companies need to address evolving workforce dynamics going forward

As employers grapple with these challenges, WTW’s research points to actions taken or planned, including digitalization, flexible working conditions, and tapping into alternative talent sources. The survey indicates that organizations effectively managing these changes are more likely to outperform their peers in terms of financial performance, employee retention, and productivity.

In conclusion, the convergence of survey insights points towards a dynamic and competitive landscape in the Philippines, where companies are not only adjusting salary structures but also adopting strategic measures to address evolving workforce dynamics. The challenge for employers is not only to attract talent but also to retain it by aligning with the changing needs and preferences of the workforce in the years to come.

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