Salary increase in the Philippines across industries seen at 6% in 2020

5, December, 2019

Kuala Lumpur, Malaysia



  • Consumer Goods, Energy and High Tech industries will have the highest salary increases
  • 45% of companies plan to add headcount in the next 12 months across industries with the SSO industry the highest (77% of companies plan to add headcount)
  • Retention remains a challenge with a 6.2% voluntary turnover rate across industries during the first half of 2019


Manila, November 2019 - Mercer today announced the results of its annual ‘2019 Philippines Total Remuneration Survey,’ a study which identifies key remuneration trends and makes hiring and pay increase predictions for 2020. According to the findings, the 2020 salary increase is forecast to grow to 6% from 5.5% in 2019 while the inflation rate is projected to drop to 3.3% from 3.8% in 2020. The Consumer Goods, Energy and High Tech industries are predicted to have the highest salary increases at 6%.


Figures and forecasts are based on the Total Remuneration Surveys (TRS) - Mercer’s flagship annual compensation and benefits benchmarking study that identifies key remuneration trends and predicts hiring and salary increase. This year the total number of companies participating in this survey across various industries in Philippines increased to 433. In addition, Mercer also conducts regular pulse surveys throughout the year to keep up with the impact of the rapidly changing business environment and compensation and workforce trends.


Evolving shape of the workforce and hiring outlook


The hiring trend in the Philippines in 2020 is expected to drop with 45% of organizations planning to add new hires compared to 50% in 2019. Given the stabilizing voluntary turnover rate, the focus of most organizations is turning to upskilling and retaining key talent. However, 66% of companies in the Philippines don’t have a formal retention policy in place.

“While the country’s population is young with a median age of 24 years, workplaces are increasingly becoming multigenerational, as Generation Z steps into their first jobs and joins Millennials, Generation X, and Baby Boomers at work. At the same time, the rise of the gig economy is growing demand for flexible work arrangements. These emerging realities challenge companies to have more compelling and differentiated value propositions, increase pay transparency, and rethink pay for performance, so they can attract, retain, and manage talent,” said Floriza Molon, Career Business Leader, Mercer Philippines. 

“Based on Mercer’s TRS Results as much as 55 percent of Filipino companies are already reviewing or changing their benefits package, with 43 percent considering to increase budget for employee salaries, and 21 percent increasing budget for employee benefits,” added Floriza.


Voluntary attrition trends


Across industries, the voluntary attrition rate is at 6.2% in the first half of 2019. The logistics industry in the Philippines has the highest involuntary turnover rate at 7.1% for the second quarter. In 2018, the full-year attrition rate stood at 10.9% with the SSO (Shared Services and Outsourcing) industry having the highest voluntary turnover rate of 14.6% with the average years of service at 3 years. 


While the top reasons cited for employees leaving their organization in Asia varies by age group and gender, the top three reasons for employees leaving their organization are competitive pay, manager interaction, and a lack of clear career path and job security. [Source: Mercer Asia Pulse Survey 1H 2019 and 2019 Global Talent Trends Study]. 


Shift to agile rewards


As new roles are created and existing roles change with automation and AI, it is becoming more difficult to keep up with employee pay expectations and market values. According to Mercer’s 2019 Global Talent Trends Study, the top workforce rewards priority is offering more diverse rewards. Both HR and employees agree that offering a wider variety of incentives and differentiating rewards for high performers will make a difference. Investments in rewards should, however, reflect a company’s strategic focus in order to align with business objectives. In many cases, this means taking a step away from market norms and moving towards more differentiated offerings to satisfy both changing employee needs and the demand for new skills. Leading firms are focusing on the overall pay experience and expanding the focus beyond base pay to include career growth, incentives, and recognition.


Puneet Swani, Senior Partner and Career Business Leader for the International Region at Mercer said, “As the pace of change accelerates and we enter into this new world of work, companies should rethink how they can be future fit by putting their people at the heart of the change. Whether embracing digitalization, building competencies and skills needed for future competitive advantage or creating the right work environment and culture, changing the way organizations invest in their employees will yield a greater return for the business far into the future.”


For more data and insights from the Philippines 2019 Total Remuneration Survey please see here.


About Mercer


Mercer delivers advice and technology-driven solutions that help organizations meet the health, wealth and career needs of a changing workforce. Mercer’s more than 25,000 employees are based in 44 countries and the firm operates in over 130 countries. Mercer is a business of Marsh & McLennan Companies (NYSE: MMC), the world’s leading professional services firm in the areas of risk, strategy and people with 76,000 colleagues and annualized revenue approaching $17 billion. Through its market-leading businesses including Marsh, Guy Carpenter and Oliver Wyman, Marsh & McLennan helps clients navigate an increasingly dynamic and complex environment. For more information, visit Follow Mercer on Twitter @Mercer.


Reference Sources:

1. IMA Asia, Asia Pacific Executive Brief, October 2019