New report reveals hiring plans, salary budget for 2025
Nearly a quarter of organisations in the Philippines plan to increase their workforce in the next year, according to the latest report by WTW.
The 2024 Salary Budget Planning Report revealed that 24.4% of companies in the country are preparing to ramp up recruitment, marking one of the highest rates of planned headcount expansion in the region.
Sectors leading the hiring push include Business Services, Leisure, Banking, Technology, and Energy and Natural Resources. According to WTW, the renewed focus on recruitment reflects a broader trend of businesses looking to capitalise on the recovering economy and secure the talent they need to support future growth.
However, while many employers are gearing up to increase their workforce, the report also noted that 69.5% of organisations intend to maintain their current headcount, and a smaller percentage, 6.1%, are planning to reduce staff.
High attrition in Philippines labour market
The findings come as the Philippine labour market begins to stabilise after a period of high attrition and uncertainty, according to the report.
It revealed that the average voluntary attrition rate over the last 12 months was 12.5%, with involuntary attrition at 8.2%.
But it also pointed out that the intense wave of resignations and turnover that many businesses experienced in previous years has begun to stabilise.
"While attrition remains high in certain areas, many employers in the Philippines are reporting that the intense wave of resignations and turnover has stabilised and become more manageable," WTW stated. "Organisations are now focusing on retention strategies and workforce planning with greater confidence."
The WTW report also pointed to shifts in the workforce composition, with millennials and Gen Z now making up the majority of employees in the Philippines at 77%.
Chantal Querubin, Rewards Data Intelligence Leader Philippines, WTW, underscored the importance of having the "right HR metrics" to design programmes that meet employees' specific needs.
"Data-driven insights ensure strategies are aligned with organisational goals, ultimately driving sustained growth, long-term success, and competitiveness," she said in a statement.
Salary budget for 2024 cycle
Meanwhile, the report also revealed that 34.6% of businesses in the country reported lower salary allocations for this year compared to 2023, despite an overall economic recovery.
It revealed that the median pay increase for 2024 stands at 5.6%, a slight decrease from last year's 5.7%. The projected salary increase is also estimated to remain at 5.6% for 2025.
Inflationary pressures, cost management concerns, and a tight labour market were cited as key factors driving these reductions, according to the report.
Digital skills in demand in Philippines
The report further highlighted that salaries for technology positions have risen by 10.28% between 2022 and 2023, reflecting a strong demand for critical digital skills.
The highest-paid roles in management include positions in Functional/Business Area, Information Systems (IS) and Cyber Security Development, and IT Architecture (Systems Design).
Intermediate professionals in Systems Software Development, Functional/Business Area, and Database Design and Analysis are also among the top earners.
To attract top talent, companies are offering a skills premium of 10% to 20%, often targeting the 75th percentile in market positioning.
"Digitalisation has an effect on compensation, with tech roles such as those in AI and machine learning seeing double-digit salary growth in many markets. The transformation potential of AI has made it the most sought-after technology discipline in the global talent market," Querubin said.
