NextGen Day

According to the latest study conducted by global consulting, broking, and solutions firm Willis Towers Watson, Philippine-based businesses are confident about the next year, as employers intend to increase the average wage budget by 5.6 percent by 2022.

The country’s anticipated wage rise for next year is greater than the Asia Pacific average of 5.3 percent.

The estimated salary increase rate in the Philippines is higher than the rates of salary increase in Asia Pacific economies such as Japan, which is at 2.5 percent, Australia, which is at 3.4 percent, Taiwan, which is at 3.5 percent, Hong Kong, which is at 3.6 percent, Singapore, which is at 3.7 percent, South Korea, which is at 4.1 percent, Thailand, which is at 4.6 percent, and Malaysia, which is at 5 percent.

Employee wages in China are projected to rise by 5.9 percent, in Indonesia by 6.5 percent, in Vietnam by 7.4 percent, and in India by 8.8 percent.

“Wage increases are making a return.” Companies in the Philippines intend to offer larger raises to workers next year as they recover from the economic impact of the pandemic and face increasing difficulties in recruiting and keeping personnel,” Willis Towers Watson stated in a statement dated October 18, 2021.

Medical technology, business support services, including business process outsourcing, and manufacturing were among the sectors that recorded the largest average salary budget increases, according to the firm.

“In terms of business outlook, almost 51 percent of businesses in the Philippines anticipate their company performance to be in line with a goal this year, while 43.8 percent expect it to be ahead of target,” it said.

Sixty-five percent of the companies polled indicated they intend to retain the current workforce for the next 12 months, 25.8 percent said they would recruit workers, and 8.9 percent said they will decrease the number of employees owing to the pandemic’s effects on their operations.

According to the study, businesses are expected to add positions in areas such as sales, information technology, and engineering during the next 12 months.

“Companies understand the need to increase pay, particularly in areas where there may be a labor shortage.” This situation has prompted organizations to look into alternatives to fixed pay increases, such as sign-on bonuses, retention bonuses, functional and skill premiums, mid-year adjustments, or pay increases,” Willis Towers Watson Philippines Rewards, Data & Software Practice Leader Chantal Querubin explained.

According to Querubin, the work environment in the midst of the epidemic forces businesses to offer “a solid employee value proposition” as well as a complete incentives program.

“Aside from competitive wages, which are now table stakes,” she added, “businesses must also concentrate their expenditure on a broad range of perks, wellness, and upskilling programs to promote employee engagement.”

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