MANILA, Philippines – Salary increase budgets in the Philippines remain stable at 7% across all industries, according to the 2015 Asia-Pacific Salary Budget Planning Report by Towers Watson, a global professional services company.
Vangie Daquilanea, Towers Watson Philippines office data services manager, said that amid all the growth projections in the business sector, reflected and evident in the historical gross domestic product growth of the Philippine economy, salary increase budgets remain stable at 7% across all industries in the country.
She added that the real challenge for companies is to be able to distribute this salary increase budget to employees as a tool and measure for the “pay for performance” philosophy that most companies are advocating for.
Top performers
The study also found that across all industries, almost 80% of respondents said they plan to allocate a larger portion of their budget to high performers.
A similar trend is seen in the 3 core industries in the survey – financial services, technology, and healthcare/pharmaceutical.
“Our survey showed that 80% of respondents will hire new employees in the next 12 months, suggesting a sunny outlook for employees in the region,” said Sambhav Rakyan, data services practice leader for Asia-Pacific, at Towers Watson.
But the greatest rewards go to the top performers, who are seeing salary increases of approximately 1 1/2 that of average performers.
“In the current war for talent, driving a strong linkage between pay and performance is critical if employers want to retain this crucial skill set,” Rakyan said.
Predictably, in the markets where overall salary increases tend to be higher, good performance is also better rewarded. In India, increases for the highest-performing employees average 12%, nearly twice the regional average.
“This shows the urgent need for these emerging countries to recruit and retain top talent. Given the talent shortage is becoming more acute, companies are carefully evaluating their spending,” Rakyan added.
Across Asia-Pacific
For the Asia-Pacific region, salaries are projected to rise 7% this year. While this is in line with 2014, it represents a significant jump in real terms, owing to lower inflation in 17 of the 19 Asia-Pacific economies examined in the survey, Towers Watson said.
In real terms, average salaries are set to rise 4.3% in 2015, compared to 3.3% last year.
In East Asia, the highest increase is seen in mainland China (7.4%), while Hong Kong will see the smallest (1.3%).
In 2016, nominal salary increases across the region are forecasted to dip slightly to 6.7%.
“This is good news for employees, who are finally seeing the results of the post-financial crisis pick-up in economic growth and in receiving more cash in hand,” Rakyan said.
As the oil price bottoming out, the sharp fall seen last year will start to work its way out of the inflation calculation. Thereafter, it may go back up. “Companies may want to allow for such a recovery when budgeting for 2016, despite the current lower inflation rate,” Rakyan added.
Hong Kong and Singapore, meanwhile, are both set for overall increases of 4.5% in 2015, unchanged from 2014. But after inflation, Singaporean employees will see far more of that increase. In real terms, salaries will rise 1.3% and 4.4% respectively.
“The Singapore government has been sticking to a tight monetary policy to keep the lid on inflation. Its policy to stabilize property prices has also helped curb inflationary pressures,” Rakyan said.
He added that in Hong Kong, at least employees will receive higher real increases than last year (0.1%), thanks to a modest fall in inflation.
Salary increase budgets for 2016 in Hong Kong and Singapore are forecasted to rise 4.6% and 4.5% respectively.
The 2015 Asia-Pacific Salary Budget Planning Report is a bi-annual survey compiled by Towers Watson’s Data Services Practice, released to coincide with companies’ compensation planning for 2015. It looks at a range of industry sectors and job grades from factory shop floor to executive suite, and focuses on salary movement and review practices.
The survey was conducted in February 2015, and results were released June 1. Approximately 2,000 responses were received from companies across 19 countries in Asia-Pacific. – Rappler.com
Folders with the label employees and salaries image from Shutterstock
There are no comments yet. Add your comment to start the conversation.