Study predicts PH salary hikes in 2023
ANY MORE IN THERE? A man withdraws cash as the cost of goods increase in the country. — INQUIRER PHOTO
Salaries in Southeast Asia, including the Philippines, are expected to increase slightly next year, as high attrition rates put pressure on employers to tackle hiring and retention rates.
According to a study done by British-American multinational financial services firm Aon PLC, a median salary budget increase of 6 percent was seen for the Philippines next year, the third highest among six other Asian countries in the survey.
The study, covering more than 700 companies across Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam, was conducted during the third quarter.
For Indonesia, it is seen at 6.8 percent; Malaysia, 5.1 percent; Singapore, 4.7 percent; Thailand, 5.1 percent and Vietnam, 7.9 percent.
Aon said that high attrition rates in 2022 across the region are putting pressure on firms to use compensation measures to tackle hiring and retention challenges.
Attrition rates
The Philippines logged an attrition rate of 18 percent, the second highest among the six countries, next to Singapore which had a 19.6 percent attrition rate.
The attrition rate was 15.9 percent in Indonesia, 14.9 percent in Malaysia, 15.4 percent in Thailand and 15.2 percent for Vietnam.
Rahul Chawla, Aon partner and head of Human Capital Solutions for Southeast Asia, said organizations must stay agile as they rethink their pay principles, even as these remain critical for businesses to define and adapt compensation for different worker types and nature of work.
“Businesses need to shape their strategies toward long-term drivers of pay and performance by making changes in a phased manner to optimize pay effectiveness,” Chawla said.
“In addition, companies must define their 2023 salary increase approach in the context of the competitiveness of their current salary levels and employee value proposition. Companies that adopt a skill-based compensation program will help ensure they can continue to build future skills for their organization’s resilient workforce,” he added.
Jobs in demand
Meanwhile, Alina Cheng, a senior consultant at the same division in Aon, said roles in areas, such as risk, compliance and talent acquisition, were in demand with the rise of fintech and digital banks in the region.
“Firms are paying a premium to attract new talent at the junior and middle management levels for these roles. As a result, over the past two years, we have seen compensation structures shifting toward lesser variable and pay at risk and an increased focus on salaries,” she said.
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