Despite the economic fallout from the coronavirus pandemic, salaries in the Philippines are projected to rise in 2021, latest findings of asset management firm Mercer showed.
Mercer’s Philippines Total Remuneration Survey said that overall, companies are seeing a 5.6% increase in salaries for next year, slightly higher than the 5.3% in 2020.
The increases, however, come as recruitment efforts are expected to remain tepid next year.
A big majority or 69% of companies surveyed said they imposed a hiring freeze in 2020, which is expected to drag on in 2021. Meanwhile, 10% implemented layoffs due to the coronavirus crisis. (READ: Unemployment eases to 8.7% in October 2020, but workers looking for more jobs)
A closer look at the responses also showed that more than half of the 416 companies polled expect delays or changes to salary increment levels.
Moreover, 14% of companies expect lower bonus payouts for 2021, while one in two companies said it is too early to tell.
The mixed results, Mercer said, reflects the cautious stance of companies.
“Due to the uncertainty, more than half of the companies have indicated that they will delay the increase of salaries or revise salary increment levels,” said Floriza Molon, Mercer’s career business leader for the Philippines.
“With sustained pressure on businesses to keep costs down, we see that companies are taking a cautious approach with regards to salary budgets.”
The chemical industry is expected to see the biggest rebound in salary increments at 5.5% next year. The consumer, life sciences, energy, and retail and wholesale industries are expected to “slightly” go up.
“While the salary increase budget remains stable in spite of the pandemic, what we are seeing is that companies are increasingly prudent with their compensation policies as well as the allocation of the salary budget,” Molon said.
“Some of the considerations include how business-critical the roles are, the potential and performance of the employees, flight risk, and availability of jobs in the market.”
As for bonuses, 14% of companies said they expect payouts to go down in 2021, while 50% said it is too early to tell. Only 8% of companies expect higher bonuses next year.
Working from home
Mercer’s survey also revealed that 67% of companies have successfully implemented remote working arrangements, with 58% projecting that they are likely to continue the arrangement even post-pandemic.
Some 14% of companies stated a decrease in productivity levels.
“We foresee more employers embracing flexible working arrangement which provides an opportunity for companies to review their compensation and total rewards packages more holistically to adopt variable pay and other reward initiatives such as work-from-home allowances to recognize and retain critical talent,” said Teng Alday, Mercer chief executive officer for the Philippines.
Alday advised companies to “adopt strategies that balance economics and empathy as employee engagement and retention will be critical in their road to recovery.” – Rappler.com