An increase in regular rank-and-file employees’ salaries is projected for 2023, due to the tight labor market and rising inflation concerns in the Asia Pacific, a report by Willis Tower Watson (WTW) revealed.
Private companies are allocating an average median increase of 5.7 percent in salaries for 2023, slightly higher than the usual 5.5 percent annual increase.
WTW also said that 52.5 percent of the 385 employers polled in the Philippines had increased their salary increase budgets this year, making the Philippines fifth out of 14 countries to have the largest increase in salary budget raises for 2023.
The Philippines is also fifth globally for actual pay raise this year.
"When asked whether they have changed their 2022 salary increases from their original projections, only 32.5 percent have made further adjustment from what they have initially planned for, while 51 percent have maintained the pay budgets they set at the start of 2022,” WTW said.
India topped the ranking, with a projected increase in salary raise budget at 10 percent, followed by Vietnam at 8 percent, Indonesia at 7 percent, and China at 6 percent.
In a statement, WTW spokesperson Patrick Marquina cited compounding economic conditions and new ways of working for the revised salary budgets.
"Although higher salary increases are expected, various industries are showing different developing rhythms. With such a dynamic environment, it’s imperative for organizations not only to have a clear compensation strategy but also a keen understanding and appreciation of the factors that influence compensation growth."
The most cited factors for a higher pay raise budget are labor market (59 percent); cost management such as inflation and rising cost of goods in the market (58 percent); and employee expectations for higher salary increases due to inflation (44 percent).
The study also revealed that due to inflation concerns, 65 percent of respondent companies said that they would not have more frequent salary increases, while others said they already have or are planning to increase the frequency of their salary raises, with 98 percent of them saying that they have already adjusted, or will adjust, salary raises twice a year.
Marvin Joseph Ang is a news and creative writer who follows developments on politics, democracy, and popular culture. He advocates for a free press and national democracy. Follow him on Twitter at @marvs30ang for latest news and updates. The views expressed are his own.