Amid higher inflation, PH firms eye 5.7% pay hike to keep talent

Philippine companies are setting aside a chunk of their budgets in 2023 to increase employees’ salaries by an average of 5.7 percent to keep talent amid rising inflation and a tighter labor market.

Results of a survey by Willis Towers Watson (WTW) showed that the projected salary increase for next year is slightly higher than the 5.5% rolled out this year. This is the fifth highest projected pay raise among 14 Asia-Pacific countries, the consulting firm added.

“Compounding economic conditions and new ways of working are leading organizations to continually reassess their salary budgets to remain competitive,” Patrick Marquina, Philippines leader of Work & Rewards for WTW, said in a statement.

Based on the survey, 84% of private firms found it hard to attract talent this year, which is expected to drop to 49% in 2023.

Meanwhile, the threat of another round of COVID-19 lockdowns and runaway inflation could dissuade companies from raising wages.