September 10, 2024 | 12:00am
MANILA, Philippines — Despite the country’s strong economic performance, 34.6 percent of organizations in the Philippines have lower salary budgets for this year compared to last year, according to a report from global advisory and solutions company WTW.
The firm’s Salary Budget Planning Report showed the overall median pay increase for 2024 in the country is at 5.6 percent, slightly lower than the previous year’s 5.7 percent.
Conducted from April to June this year, the survey had 440 participating companies from the Philippines.
WTW said organizations in the Philippines attributed the lower salary budgets for this year to inflationary pressures, concerns related to cost management and tighter labor market, as well as weaker financial results.
For next year, salary budget increases are expected to be flat at 5.6 percent.
The report found strong demand for digital talent, with salaries for technology-related roles increasing by 10.28 percent last year from 2022.
Management roles with the highest salaries are those in the functional or business area, information system and cyber security development and information technology architecture.
As for intermediate professionals, the top-paying positions are those in systems software development, functional or business area and database design and analysis.
Companies are offering a 10 to 20 percent skills premium in order to attract digital talent.
“Digitalization has an effect on compensation, with tech roles such as those in AI (artificial intelligence) machine learning seeing double-digit salary growth in many markets. The transformation potential of AI has made it the most sought-after technology discipline in the global talent market,” said Chantal Querubin, rewards data intelligence leader for the Philippines at WTW.
As such, she said organizations intend to invest heavily in skilled professionals who can drive innovation and growth in the AI space and give them an advantage in the market.
“As AI and other technologies become more prevalent, employers need to consider how they can leverage these for their business and whether they ought to train their workforce for it or recruit digital talent to facilitate digital transformation,” she said.
WTW also found that the average voluntary attrition rate over the last 12 months stands at 12.5 percent, with involuntary attrition at 8.2 percent.
In the coming year, 24.4 percent of companies in the country plan to increase headcount, particularly those engaged in business services, leisure, banking, technology as well as energy and natural resources.
On the other hand, 6.1 percent are looking to reduce their staff, while 69.5 percent plan to maintain their current headcount.
While attrition remains high in certain areas, WTW said many employers in the Philippines are reporting that the intense wave of resignations and turnover has stabilized and become more manageable.
For now, organizations are focusing on talent retention.
Organizations are also taking steps to address the changing market conditions and employee needs in the post-pandemic era by enhancing the overall employee experience, placing a stronger emphasis on diversity, equity and inclusion, as well as offering more training opportunities.
Based on WTW’s study, millennials and Gen Zs accounted for the majority of the workforce at 77 percent last year, followed by Gen Xs at 22.3 percent and Baby Boomers at just 0.7 percent.
Having to deal with different generations, Querubin said it is important for employers to have programs tailored for their workforce’s specific needs.
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