Philippines faces 20% staff turnover as workers demand more than pay

MANILA, 13 AUGUST 2026 —

Employee turnover in the Philippines may reach 20% this year as workers prioritise career growth, flexibility and well-being over pay, according to AscentHR chief executive Subramanyam Sreenivasaiah.

“There’s a fundamental shift in workforce expectations,” Sreenivasaiah said. He cited a widening gap between what employees expect and their daily workplace experience, despite heavy recruitment spending by companies.

Filipino workers, highly skilled and digitally fluent, face global competition for remote roles, but local friction erodes loyalty. Prolonged workplace stress can outweigh attachment, making retention a balance between regional labour competitiveness and local realities.

For younger staff, salary alone is no longer enough. More than half of Gen Z professionals in the Philippines rank career growth as their top reason to stay, Sreenivasaiah said, pointing to a broader shift where continuous skills development, clear pathways and flexibility matter more.

“When employees hit slow processes and unclear roadmaps, financial incentives only delay resignations,” he added.

He urged companies to move from “transactional retention” to “relational retention,” using HR technologies to cut administrative friction and clarify advancement opportunities. BPO and shared services sectors face extra strain from operational demands such as rigid metrics, weak frontline leadership and disjointed HR systems.

Sreenivasaiah recommended stronger coaching tools for supervisors and integrated workforce systems covering payroll, leave and performance tracking. “Supportive infrastructure and visible skill progression make employees more resilient,” he said.

Work arrangements now weigh heavily on retention, especially in Metro Manila. Flexibility is seen less as a benefit and more as an economic necessity amid rising living costs. Mandatory office returns add commute hours that cut take-home pay and quality of life.

Employers should avoid rigid remote or office choices and design well-governed hybrid models, he said. Structured in-person sessions can preserve culture while remote work eases commute stress. “Flexibility within a compliant framework strengthens retention without losing oversight,” Sreenivasaiah said.

Data can also flag attrition risks before resignations occur. Traditional metrics like exit interviews miss early signals; changes in learning participation, attendance patterns, overtime and employee sentiment provide earlier warnings, he added.

“Resignation is the end of a series of subtle signals, not a single event.”

Well-being programmes have grown, but gaps remain. Sreenivasaiah noted that wellness initiatives often fail to address root causes of stress such as unclear processes, excessive workloads and inefficient technology. “Well-being needs systemic fixes, not periodic check-ins,” he said.

Companies that retain talent treat HR as an ongoing strategy, not a periodic task. Data-driven pay and benefits, transparent career pathways and digital-first HR services help employees see advancement without leaving. Digital platforms that speed access to payroll and benefits reduce daily friction that fuels dissatisfaction.

Over the next 12 months, Sreenivasaiah advised Philippine employers to modernise fragmented HR systems, train staff on AI and digital tools, and strengthen frontline leadership. Managers should become career coaches who understand and respond to employee needs.

“HR can no longer be just administrative support,” he said. “In a competitive regional market, an agile, data-ready HR system drives business performance and long-term value.”

Related: Manila