MANILA – Salaries in the Philippines are seen to grow at a stable 7 percent this year driven by the country’s economic growth, professional services company Towers Watson said in its latest report.
“Amidst all the growth projections in the business sector, reflected and evident in the historical GDP growth of the Philippine economy, salary increase budget remains stable at 7 percent across all industries in the Philippines,” said Vangie Daquilanea, data services manager at Towers Watson Philippines.
Daquilanea added that the real challenge for companies in the Philippines is to be able to distribute this salary increase budget to employees as a tool and measure for the “pay for performance” philosophy that most companies are advocating for.
Towers Watson’s 2015 Asia Pacific Salary Budget Planning Report also said that salaries across Asia Pacific will likewise rise 7 percent in 2015, representing a significant jump in real terms, owing to lower inflation in 17 of the 19 Asia Pacific economies examined in the survey.
In real terms, average salaries are set to jump 4.3 percent this year compared to the 3.3 percent increase last year.
The highest increase in East Asia is seen in mainland China (7.4 percent), while Hong Kong will see the smallest (1.3 percent).
Rewarding top performers
The study also found that across all industries, almost 80 percent of respondents said they plan to allocate a larger portion of their budget to high performers.
A similar trend is seen in the three core industries in the survey: financial services, technology and healthcare/pharmaceutical.
“Our survey showed that 80 percent of respondents will hire new employees in the next 12 months, suggesting a sunny outlook for employees in the region,” said Sambhav Rakyan, Data Services practice leader, Asia Pacific at Towers Watson.
“However, the greatest rewards go to the top performers, who are seeing salary increases of approximately one and a half times that of average performers. In the current war for talent, driving a strong linkage between pay and performance is critical if employers want to retain this crucial skill set,” he added.
Good performance is also better rewarded in markets where overall salary increases tend to be higher. In India, for example, increases for the highest-performing employees average 12 percent, nearly twice the regional average.
“This shows the urgent need for these emerging countries to recruit and retain top talent. Given the talent shortage is becoming more acute, companies are carefully evaluating their spending,” he said.
The 2015 Asia Pacific Salary Budget Planning Report, conducted in February 2015, is a bi-annual survey compiled by Towers Watson’s Data Services Practice (TWDS). Approximately 2,000 responses were received from companies across 19 countries in Asia Pacific.
The survey looks at a range of industry sectors and job grades from factory shop floor to executive suite.
In 2016, nominal salary increases across the region are projected to drop to 6.7 percent.
“This is good news for employees, who are finally seeing the results of the post-financial crisis pick-up in economic growth and in receiving more cash in hand,” Rakyan said.
Rakyan added that with oil price bottoming out, the sharp fall seen in 2014 will start to work its way out of the inflation calculation.
“Companies may want to allow for such a recovery when budgeting for 2016, despite the current lower inflation rate,” he said. –ABS-CBNnews.com
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