by Ramon Royandoyan – Philstar.com, 18 Oct 2021
MANILA, Philippines — Local employees are set to bag wage increases next year as companies continue to recover from the pandemic and invest in retaining talent, a new survey released Monday found.
A survey of 1,405 companies in Asia Pacific between April and June this year by insurance broker Willis Towers Watson showed employers in the Philippines plan to give workers salary hike of 5.6% on average next year, slightly bigger than 5% average wage increase that employees received this year.
The planned pay hike of Philippine companies for next year is also bigger than the projected average salary increase of 5.3% for the entire Asia Pacific, which is forecast to see the highest salary increases in 2022 among regions.
At home, Willis said employers may still tweak the size of salary increases for next year depending on how the economy would perform as the health crisis drags on. But survey results showed 98.1% of Philippine companies polled are expecting to proceed with their regular salary review in 2022.
“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,” Chantal Querubin, a consultant at Willis, said.
“This situation has driven organizations to explore alternative options to fixed pay increases, including sign-on, retention bonuses, functional and skill premiums, mid-year adjustments or pay increases,” Querubin added.
The Duterte administration enacted the Corporate Recovery and Tax Incentives for Enterprises (CREATE) law in a bid to help pandemic-hit companies recover by reducing corporate income tax rate (CIT) while slowly dismantling their tax perks. With CREATE, the government is hoping that companies will use their tax savings to stay afloat and hire more people.
But it seems CREATE is not fulfilling its promise as millions remain jobless in the country while companies are not using their savings to recruit more talent. Government data showed there were 3.88 million people who were either unemployed or out of business in the Philippines in August, up from 3.07 million in July.
According to Willis, employers are instead investing their resources in making their compensation packages more competitive to hold on to their top talents. Survey results showed 5.3% of Philippine companies plan to maintain their headcount in the next 12 months, while 25.8% said they might hire more people in functions such as sales, information technology and engineering.
Meanwhile, 8.9% are planning to let go some of their workers “largely due to the negative impact of the pandemic on their businesses,” Willis reported.
On business outlook, close to 51% of local companies expect to meet their business targets while 43.8% expect to beat their goals this year.