It is often believed that private sector employers pay significantly higher than international public sector employers such as embassies, NGOs and international organizations, especially in large labor markets. However, this is not always true, especially in developing markets such as the Philippines.
Many multi-national private companies have been established for a long time in the Philippines, and it is also home to one of the largest and fastest growing commercial outsourcing/call center industries in the world. One would expect that compensation levels for local talent would be more attractive in the private sector rather than the international public sector, but market survey data tells a different story.
According to recent market data from the Birches Group compensation and benefits survey (updated April, 2015), the international public sector is more generous in setting pay levels for support staff compared to the private sector.
For professional roles (below the executive level), the private sector has a wider range of pay and is generally higher at the maximum, and lower at the minimum. The two charts below illustrate the differences.
As you can see, for support staff, the international public sector (red area) is well above the private sector (blue area) at both the minimum and maximum of the range up to Birches level 7, the most senior support staff position.
For professionals at levels 9-11, the core professional workforce, private sector pay ranges (blue area) are more dynamic, especially at the maximum, but nearly coincide with public sector employers at level 11. Of course, private sector companies have positions above level 11, but within international public sector organizations, those senior roles are generally encumbered by expatriates, so there is insufficient data for a comparison at those levels.
The competitive level of compensation amongst international public sector organizations may come as a surprise to many in the private sector. We recommend that employers always consider a combination of leading employers from all sectors when benchmarking their compensation and benefits.
For more information about Birches Group surveys in the Philippines or other high-growth and developing countries, or to be included in the next survey update in July, 2015, please contact us.