PHL employee turnover seen hitting 20% as workers seek more than pay — AscentHR

MANILA, 13 AUGUST 2026 —

**Philippine Employee Turnover May Hit 20% as Workers Prioritise Growth, Well-being Over Pay**

The projected rate exceeds estimates for Singapore at 19.3% and Malaysia at 18.2%, while attrition in some segments of the business process outsourcing (BPO) industry could surpass 30%, underscoring the intensifying competition among employers for skilled talent.

Sreenivasaiah described the shift as a “fundamental change in workforce expectations,” driven by a widening gap between what employees seek and their daily workplace experience. While companies continue to invest heavily in recruitment, workers are now evaluating employers based on factors beyond salary, including career progression, flexible work arrangements and mental health support.

The Philippines’ highly skilled, English-proficient and digitally fluent workforce makes it particularly vulnerable to these pressures, as Filipino professionals are increasingly sought after by global remote employers and the IT-BPM sector. Yet, this global demand coincides with local challenges, including high stress levels among Filipino workers despite their strong psychological attachment to their roles.

For younger employees, salary increases alone are proving insufficient as a retention tool. More than half of Filipino Gen Z professionals cite career growth as their primary reason for staying with an employer, according to Sreenivasaiah. This reflects a broader trend where continuous skills development, transparent career pathways and workplace flexibility are becoming decisive factors in job satisfaction.

“When employees encounter slow legacy processes and unclear career roadmaps, financial incentives only delay resignations rather than prevent them,” Sreenivasaiah said. He urged companies to shift from “transactional retention”—relying solely on pay raises—to “relational retention,” which involves leveraging HR technologies to reduce administrative burdens and provide clearer advancement opportunities.

The BPO and shared services sectors face heightened attrition risks due to operational pressures such as demanding schedules, rigid performance metrics and fragmented HR systems. Sreenivasaiah recommended strengthening frontline management by equipping supervisors with better coaching tools and integrating workforce systems like payroll, leave management and performance tracking.

“When employees feel supported by efficient infrastructure and see clear pathways for skill progression, they are far more resilient to the inherent demands of the sector,” he said.

Work arrangements are also emerging as a critical retention factor. In Metro Manila, flexibility is increasingly viewed not just as a benefit but as a necessity for economic and well-being reasons. Mandatory return-to-office policies can lead to prolonged commutes, reducing take-home pay and quality of life amid rising living costs. Sreenivasaiah advised employers to avoid framing remote and office work as mutually exclusive and instead adopt well-governed hybrid models that balance collaboration with employee needs.

“When flexibility is embedded into a well-governed, compliant HR framework, it directly strengthens talent retention without compromising operational oversight,” he said.

Beyond policy adjustments, companies can use workforce data to detect early signs of attrition. Traditional indicators like exit interviews and monthly turnover rates often come too late. Instead, Sreenivasaiah suggested monitoring changes in participation in upskilling programs, attendance patterns, overtime trends and employee sentiment surveys to identify at-risk employees before they resign.

“Resignation is not an isolated event, but the culmination of subtle, observable workforce signals over time,” he said.

While corporate wellness programs and mental health initiatives have gained traction, Sreenivasaiah cautioned that these measures alone cannot address underlying stressors such as unclear processes, excessive workloads and inefficient technology. True well-being, he argued, requires addressing root causes by streamlining workflows, setting realistic expectations and training managers to foster psychologically safe environments.

For companies successfully retaining talent, a common strategy is treating talent management as an ongoing priority rather than a periodic HR task. Sreenivasaiah highlighted data-driven compensation management, clear internal career pathways and digital-first HR services as key practices. Digital HR platforms, for instance, can provide employees with faster access to payroll, benefits and personal information, reducing administrative friction that contributes to dissatisfaction.

Looking ahead, Sreenivasaiah advised Philippine employers to focus on building agile HR systems over the next 12 months. This includes modernising fragmented HR infrastructure, investing in training on digital and AI tools, and elevating frontline leaders from administrative supervisors to career coaches who understand and respond to employee needs.

“HR can no longer be viewed merely as an administrative support function,” he said. “In a competitive regional landscape, an agile, data-ready HR ecosystem is a direct driver of strategic business performance and long-term enterprise value.”

Related: Manila