In poll, pandemic-stricken employers found willing to hike pay
MANILA, Philippines — A big majority of Philippine firms are looking to reward employees with a pay hike this year, counting on a fragile economic rebound to restore operations and swing back to profits.
Such were the findings of a regional survey of Willis Towers Watson, a global advisory firm, which also showed domestic firms willing to grant an average of 5.6% increase in annual salaries to their workers. This was slightly down from 5.7% last year when the pandemic upended the business climate.
“After a difficult year for employers and employees— battling lockdowns, employee safety issues, working from home and declining revenues— many employers are finding ways to handle the crisis better,” Patrick Marquina, head of talent and rewards, at the local WTW office.
Yet at least for now, the survey appears to hardly reflect reality. On the ground, employers are rejecting any pleas for a minimum wage hike this year, a position supported by the government over fears smaller companies would not be able to afford them and just shut down. At least one petition for a P100 hike in daily minimum wage is currently being heard.
In WTW survey held from October to November last year, 82% of 233 Philippine companies polled supposedly plan to increase workers’ salaries this year, up from 61% in 2020. Only 13% indicated no change or implementing only “statutory” increases, down from 28% a year ago. A smaller 5% of companies would likely cut wages in 2021.
In Asia Pacific, Philippine firms are also offering a competitive salary hike this year. At an average of 5.6% increase, pay in local companies will go up faster than their counterparts in Singapore with just 3.5% increase, Malaysia (4.7%), Thailand (5%) and Cambodia (5.5%).
On the flip side, salaries in Vietnam, with projected 7.7% increase, Indonesia (7%) and China (6%) were among those likely to fare better than local wages. Thirteen of 20 surveyed markets indicated lower salary adjustments planned for the year.
Marquina said “cautious optimism” is driving willingness of companies to compensate their employees better. This is good news, at least for those who managed to hold on to their jobs after last year’s record disruption that saw joblessness swell to 10.3%, the highest in 15 years.
More broadly, any form of wage augmentation will be a welcome boost to consumption activity vital to resuscitate a weakened economy. Reluctant to fund a costly fiscal package, the state has relied on the central bank’s easy-money policy as fresh wind to local enterprises shut down by the health crisis. This however has yet to bear fruit through more lending.
If any, businesses’ pandemic pain was captured by the varying magnitude of salary increases projected across sectors. Findings showed a pay hike would likely be “modest” for retail, power and natural resources, as well as financial services this year— interestingly, sectors which suffered the brunt of the crisis.
Meanwhile, pharmaceutical and health sciences, high tech, as well as electronics manufacturing and business support services, including big dollar-earner outsourcing firms, would most likely offer bigger pay hikes.
“While there is certainly more optimism this year in both employers and employees alike, the recovery for many hard-impacted businesses would not be smooth sailing. Companies will continue to experience smaller salary budgets this year,” Marquina said.
“Therefore, it is important for employers to differentiate their allocation of pay rises, so that they can provide meaningful salary increases for their best and most valuable talent, and prioritize spending on jobs that are likely to contribute the most to the success or survival of their businesses,” he added.
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