On rise in pay, PH in step with rest of Asia

MANILA, Philippines–Salaries in the Philippines are expected to increase by an average of 7 percent in 2015, the same as the projected average pay rise across countries in the Asia Pacific, a survey conducted by professional services company Towers Watson showed.

However, as inflation picks up across the region, the salary increases in real terms may drop slightly or will be lower for 12 of the 20 Asia-Pacific economies covered in the survey.

“Philippine companies’ salary increase for 2015 is similarly placed with how the rest of the countries in Asia Pacific are budgeting the salary increase at 7 percent…. [As] foreign investments continue to flow in, companies are able to justify a good salary increase for their performing employees,” noted Vangie Daquilanea, Data Services manager at Towers Watson Philippines.

But the country’s attrition rate “is on the high side at 15 percent, compared to our neighboring countries in Southeast Asia, where the average is only at 9 percent,” Daquilanea said. “While companies aspire for market competitive salaries to be able to attract key talent, equal importance should also be placed on … retaining them. Availability of the opportunities for career progression is considered a top retention factor by the employees, hence, programs that will support this should be in place.”

The 2015 Salary Budget Planning Report, which was compiled by Towers Watson’s Data Services Practice (TWDS), was conducted in July 2014. It covered approximately 2,900 sets of responses from companies across 20 countries in the Asia-Pacific.

China and Vietnam are expected to lead the way in East Asia for salary hikes in 2015 at 5.2 percent and 4.1 percent, respectively, when adjusted for inflation.

Across the region, from factory floor to senior management, employees will have pay raises equal to or higher than last year in percentage terms, with the exception of Taiwan, where the rate of increase will drop to 1.7 percent after inflation, from 2.8 percent.

“We’re seeing a pick-up in economic growth in Asia-Pacific in the coming year against a backdrop of declining unemployment, which will create inflationary pressures,” said Sambhav Rakyan, Data Services practice leader at Asia Pacific at Towers Watson. “The challenge for companies is to keep employees engaged and turnover down, while not getting caught up in a pay-inflation spiral. From our research, we know that, whatever people say, salary is the number one driver for attracting and retaining highly skilled staff, so a fine balance needs to be found.”