MANILA, Philippines – Salaries across the Philippines are expected to rise by an average of 6.8 percent this year despite challenges in workforce retention, according to a survey conducted by professional services firm Towers Watson.
Towers Watson’s 2013-14 Asia-Pacific Salary Budget Planning Report showed that in the Philippines, higher salary increases are expected in the ranks of the middle management due to a shortage of that specific skills mix.
The report noted, however, that retaining skilled staff not only in the Philippines but in the whole Asia-Pacific region remains a challenge for companies.
“While the Philippines’ salary increase rates have stabilized at a single digit level—between 6 and 7 percent in the past couple of years, workforce retention is an issue that continues to haunt employers,” Towers Watson Philippines data services manager Vangie Daquilanea said.
Daquilanea an increase in new businesses and expansions due to economic growth and stronger investor confidence contributed to the retention issues.
“This contributes to the war for talent and feeds on the young workforce’s preference for being mobile and dynamic. This has becomes quite a big issue with employers, challenging the effectiveness of their current retention programs,” she said.
Towers Watson Asia Pacific data services chief Sambhav Rakyan, meanwhile, said finding and retaining skilled staff is also a challenge for companies in China, Hong Kong, India, Indonesia, South Korea and Thailand.
“We hear from large-scale employers – often manufacturers – in these markets that staff hiring and retention is a constant challenge,” said Rakyan.
For the whole Asia-Pacific region, salaries are expected to rise an average of 6.9 percent this year.
Pakistan (13 percent) and India (10 percent) are expected to see the biggest increases, while New Zealand (3 percent) and Japan (2.3 percent) will see the lowest.
Salaries in China and Cambodia are expected to jump 8 percent jump before inflation is taken into account.
Salaries in Vietnam are set to rise 11.5 percent and Indonesia 9.6 percent, while salaries in Hong Kong and Singapore are forecast to go up 4.5 percent and 4.3 percent, respectively.
The Towers report drew on approximately 2,000 sets of responses covering 18 countries in the Asia-Pacific region.
The survey included about 400 companies, some of which responded for multiple countries where they have a presence.
The survey was set against a regional backdrop of annual inflation at 4.1 percent, stronger economic growth, and a decline in the overall unemployment rate.