Industry survey: Pay hikes seen but fewer firms hiring more
MANILA, Philippines — If you’re working in the consumer goods, energy, or high-tech industries, there’s good news you can look forward to in the coming year.
Employees in those three industries will see the highest salary increases in 2020, according to the 2019 Philippines Total Remuneration Survey (TRS).
The annual survey by international consulting firm Mercer identifies key remuneration trends and makes hiring and pay increase predictions. This year, 433 companies across various industries in the Philippines participated in the survey.
The survey also anticipated a “salary increase in the Philippines across industries… at 6 percent in 2020.”
This forecast is higher than the 5.5-percent forecast in 2019. Moreover, inflation is expected to drop to 3.3 percent next year, from 3.8 percent.
Mercer conducts regular pulse surveys to keep up with the impact of the rapidly changing business environment and compensation and workforce trends.
Drop in hiring
On the other hand, a drop in the addition of new hires is expected next year in the Philippines. The survey showed that only 45 percent of companies intend to add to their headcount in 2020, lower than the 50 percent that had such plans in the previous year’s poll.
The survey showed that most organizations are focusing more on retaining new talent and improving their skills. It also found that 65 percent of these companies don’t have a formal retention policy in place.
According to Floriza Molon, career business leader of Mercer Philippines, the TRS results indicated that as many as 55 percent of Filipino companies are already reviewing or changing their benefits package, with 43 percent considering to increase the budget for employee salaries, and 21 percent increasing the budget for employee benefits.
Molon said companies should also take into account new challenges facing today’s workplaces: a multigenerational workforce (not just boomers, but also millennials, Gen X and Gen Z), plus the rise of the gig economy.
“These emerging realities challenge companies to have more compelling and differentiated value propositions, increase pay transparency and rethink pay for performance, so they can attract, retain and manage talent,” she said.
Attrition rate
The report also said the voluntary attrition rate across all industries was 6.2 percent in the first half of 2019.
The country’s logistics industry has the highest involuntary turnover rate at 7.1 percent for the second quarter.
The full-year attrition rate in 2018 was 10.9 percent. The shared services and outsourcing industry had the highest voluntary turnover rate at 14.6 percent, with an average years of service of three years.
According to the Mercer Asia Pulse Survey and the 2019 Global Talent Trends Study, the top three reasons for leaving an organization identified by employees are: competitive pay; manager interaction; and a lack of clear career path and job security.
The report said companies must take a more holistic approach when it comes to employee rewards, focusing on the overall pay experience and going beyond base pay to include career growth, incentives and recognition.
Diversity also helps, the report further pointed out.
Mercer’s research has found that both HR and employees agree that offering a wider variety of incentives and differentiating rewards for high performers will make a difference, especially now that job roles are constantly being redefined by tech developments.
“As the pace of change accelerates and we enter into this new world of work, companies should rethink how they can be future fit by putting their people at the heart of the change,” says Puneet Swani, senior partner and career business leader for the international region at Mercer.
“Whether embracing digitalization, building competencies and skills needed for future competitive advantage, or creating the right work environment and culture, changing the way organizations invest in their employees will yield a greater return for the business far into the future.”
