PH employers hiking 2022 salary budget by 5.6%

6.1% salary increase seen for BPOs

Employers in the Philippines are expected to increase their budget for salaries in 2022 by an average of 5.6 percent, the local unit of a global advisory firm said.

This was according to a statement from Willis Towers Watson, citing its 2021 Salary Budget Planning Survey across Asia-Pacific earlier this year. The 2022 projected increase was slightly higher than the 5-percent salary hike seen in the country this year.

It did not say how many respondents were from the Philippines, but a total of 1,405 companies were surveyed in the report across 13 markets in Asia-Pacific.

Employers in medical technology projected the highest increase at 7.3 percent, followed by construction, property and engineering with 6.2 percent. Business support services, which include call centers, are budgeting a 6.1-percent increase increase. These are based on Willis Towers’ graph on salary increases by industry in the Philippines.

The 2021 Salary Budget Planning Survey was conducted by Willis Towers Watson Data Services between April and June 2021. A representative has not yet responded to a request for further information as of press time.

Apart from the number of Philippine respondents, it also remains to be seen if the average increase could translate to a significant boost for employees, who also struggled during the pandemic.

The estimated 5.6 percent average increase in salaries for 2022 is lower than the government’s projected economic growth rate of 7-9 percent for the same year. On the other hand, the Bangko Sentral ng Pilipinas is projecting the country’s inflation rate to average at 3.3 percent next year.

Not just the money

“Although there is a positive outlook among businesses, companies are also monitoring the Philippine economic landscape, hence, organizations may further adjust their 2022 salary budget forecast in the later part of this year,” said Chantal Querubin, Rewards, Data & Software Practice Leader at the local unit of Willis Towers.

“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,” said Querubin.

“Attracting and retaining employees remains a major challenge for employers. In fact, the current environment makes these challenges even more difficult,” Querubin added, noting that employers have to go beyond competitive salaries and focus on a diverse set of benefits, well-being and upskilling programs.

In line with goals

The advisory firm said companies were also going through extensive planning in 2021, wherein they would be experimenting with hybrid models that better fit employees’ lifestyles.

This, it said, may also result in long-term business savings. The job market and the challenge of engaging employees outside of an office environment mean that companies will need to pay a premium to hold on to their top talent.

On business outlook, close to 51 percent of companies surveyed in the Philippines expected their business performance to be in line with target, while 43.8 percent expected to perform ahead of target this year, Willis Towers said.

Organizations are also seen likely to create more jobs in functions such as sales, information technology and engineering in the next 12 months.

The survey further showed that 65.3 percent of companies planned to maintain headcount in the next 12 months, with 25.8 percent looking to add more workers. On the other hand, 8.9 percent planned to cut headcount.

Almost all companies surveyed, or 98.1 percent, expected to proceed with their 2022 regular salary review.