Philippines salary increases slowing down, bonuses slightly up

Employee salaries in the private sector increased only by 5% year-on-year, on average, according to a report released today by leading global advisory, broking and solutions company Willis Towers Watson (NASDAQ: WLTW).

In the recently completed Philippine Total Compensation Survey, the 5% increase is a little lower compared to what companies have been budgeting for merit increase every year for their employees, which is at 6%. The 1% differential exists because companies were not able to spend as they are now more careful in allocating this budget, making sure that they use it to reward their high performing employees. The budget has been going down historically, and if that pattern continues in 2017, actual increases will be well below the 6% forecast by the companies surveyed.

Figure 1: Historical Salary Increase vs Inflation Rate

“Employees are now looking at some flexibility in their benefits packages, something more attuned with their needs. Companies need to listen more to their employees and to be open in adopting a more holistic approach and consider total rewards factors such as career development opportunities, recognition, transparency and open communication, as well as flexible work arrangements,” Daquilanea added.

More details of the report as well as other trends will be shared by Willis Towers Watson on March 8, 2017 at Makati Shang-ri la Hotel, during their HR Annual Conference, Business Agility for the Digital Age.

About the Survey

The Total Compensation Survey Report is an annual survey compiled by Willis Towers Watson’s Data Services Practice. The survey, aimed to address organisation’s most challenging pay questions, such as how their pay strategy measures up to their competitors or if companies are overpaying or underpaying their employees, looks at a range of industry sectors and job grades from factory shop floor to executive suite, and focuses on salary data, HR programs and practices as well as benefits programs.

The survey was conducted in July 2016. Approximately 400 responses were received from companies across 12 industries in the Philippines. Click here to learn more about the annual Compensation Surveys.