Philippine companies are entering 2026 amid what experts call a growing ‘retention crisis,’ as the country faces one of the highest employee turnover rates in Southeast Asia.
British-American consulting firm Aon’s 2025 Salary Increase and Turnover Study projects a 20% attrition rate in the Philippines next year-meaning one in five skilled Filipino workers will likely leave their current jobs.
The attrition rate measures how many employees exit a company without being replaced over a given period. The figure surpasses Singapore’s projected 19.3% and Malaysia’s 18.2%, suggesting that many Filipino professionals are actively pursuing higher pay and faster career growth in a competitive market.
The mass movement of workers is prompting employers to treat competitive pay not merely as an expense but as a strategic investment to keep top talent, Aon said.
“As capital deployment in technology and strategic investments accelerate across Southeast Asia, organizations are increasingly focused on retaining top talent and highly skilled employees,” said Rahul Chawla, Aon’s partner and head of Talent Solutions for Southeast Asia.
Despite the high turnover, government data show continued improvement in employment.
The Philippine Statistics Authority (PSA) reported in August that 2.03 million Filipinos were unemployed, down from 2.59 million in July.
Meanwhile, 5.38 million workers said they wanted more hours or better jobs-a sign of underemployment that continues to affect large segments of the labor force.
Aon’s regional study, which surveyed more than 700 businesses across six Southeast Asian countries from July to September 2025, found that average budgeted salary increases across the region are expected to reach 5.3% in 2026.
Where turnover hits hardest
Attrition remains highest in sectors that rely on specialized skills. The consulting, business and community services industries posted a 22.6% turnover rate, followed by retail at 21.6%.
Among specific job functions, employees most likely to switch employers work in:
Despite the retention pressures, Aon said most businesses remain ‘cautiously optimistic.’
“To navigate an uncertain business landscape, firms are prioritizing productivity gains, streamlining management layers and adopting targeted hiring strategies and salary increases to engage top performers and build resilient, future-ready teams,” said Evon Lock, Aon’s head of data solutions for Southeast Asia.