Philippine employers are likely to increase their budget for pay increases next year amid a tight labour market and rising prices, reports Business World Online citing research from Willis Towers Watson. Private companies are allotting an average median increase of 5.7% in salaries for 2023, higher than the actual 5.5% increase this year and at any time during the Covid-19 pandemic. “Compounding economic conditions and new ways of working are leading organisations to continually reassess their salary budgets to remain competitive,” Patrick Marquina, Work and Rewards Leader at Willis Towers Watson Philippines, said.

Willis Towers Watson said 52.5% of 385 employers in the Philippines who participated in the survey had increased their salary increase budgets this year from last year. When asked whether they have changed their 2022 salary increases from their original projections, 32.5% made further adjustment from what they have initially planned for, while 51% have maintained the pay budgets they set at the start of 2022. The most cited reasons for the higher actual pay raise this year were a tighter labor market (59%), cost management such as inflation and rising supply costs (58%) and employee expectations (44%). Meanwhile, Willis Towers Watson said 86% of companies said they were experiencing difficulties attracting talent this year, but only 38% expect the same next year.