Most Philippine employers are more focused on retention and retooling initiatives as they are not interested in expanding their current workforce, according to a survey by global advisory and broking firm WTW.
In its latest report, WTW said that beyond salary budgets, domestic firms have trained their sights on workforce stability as they navigate an uncertain business environment.
The report showed that 71.9 percent of businesses surveyed intend to maintain their current headcount levels over the next 12 months, while 17.5 percent expect to increase headcount and 10.5 percent anticipate workforce reductions.
WTW also said compensation planning continues to be shaped by factors, such as inflation, business performance and labor market dynamics.
As such, companies are looking beyond broad-based salary increases and are leveraging a wider mix of reward strategies to attract and retain talent while managing costs effectively.
‘In the Philippines, employers are taking a more deliberate approach to compensation planning as they manage rising business costs while staying competitive for critical talent,’ WTW Philippines Rewards Data Intelligence Practice Leader Chantal Querubin said.
‘While salary increases have moderated slightly, the market remains resilient, and organizations are increasingly using data-led reward strategies to target pay investments where they will have the greatest impact on retention, skills and performance.’
The WTW said domestic companies project a moderate salary increase of 5.1 percent in 2027, slightly higher than the actual increase of 5 percent in 2026.
This reflects a balance between the need to remain competitive for talent and ongoing cost management considerations, it added.
Meanwhile, WTW said the more targeted approach to talent and rewards is also reflected in salary administration.
Citing its 2025 WTW Total Compensation Survey report on General Industry, the firm said median annual base salaries by employee category and years of service show that pay does not always rise in line with tenure. In some employee groups, those with one to two years of service have similar, and in some cases higher, median pay than employees with six to eight years of service.
Clearer pay differences tend to appear only among employees with nine or more years of tenure, particularly in sales roles, it added.
‘With compensation budgets remaining constrained, organizations have limited ability to differentiate broadly across the workforce,’ WTW Philippines Work and Rewards Senior Director Patrick Marquina said.
‘As a result, pay investments are increasingly being concentrated on critical roles and key talent segments, while compensation decisions for the wider employee population become more standardized.’