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STATE OF TALENT SUPPLY AND DEMAND IN THE PHILIPPINES

For much of the last 40 years, the Philippines has been gearing its national economy towards

industrial and technological pursuits; and with this, demanding that the labor force transform from

being primarily rural and agrarian to increasingly urban and industrial. Employers are also increasingly

requiring professionals with the appropriate skills set, which local educational institutions have failed to

supply. Recruiters, such as business process outsourcing (BPO) firms, are concerned that Philippine

college and university graduates who enter the workforce are inadequately prepared, as exemplified by

the low English proficiency levels, stated by the Universal Access to Competitiveness and Trade (UACT),

and poor communication skills and critical thinking.

Back in 1997, an analysis on the state of human resources in Southeast Asia showed that the

Philippines, contrary to Indonesia, Malaysia and China, was facing an employment surplus rather than a

shortage. Amidst the economic growth, employment opportunities were not sufficient for the relatively

well-educated workforce. Unemployment and emigration of professional workers was prevalent.

Professionals prefer to be overseas workers in developed countries because of higher salaries and better

employment opportunities. However, at the turn of the millennium, educational systems can no longer

produce enough highly trained workers to fill the positions created by rapid economic growth and

shifting economic goals.

Statistically speaking, the National Statistical Coordination Board (NSBC) revealed that although

the number of graduates has been generally increasing, the ratio of graduates to enrolees stands only at

16% to less than 18% and a 0.08% negative growth during the Academic Year (AY) 2004-2005. Also,

enrolment in vocational courses has skyrocketed to 116.6% in AY 2002-2003 due to the introduction of

the Technical Vocational Education and Training (TVET), however, followed by a drop in 2004-2005, but

has increased significantly thereafter by a factor of 14% and 25% in AY 2004-2005 and AY 2005-2006,

respectively. The Filipino youth seem to opt for vocational rather than a college or university degree,

primarily due to financial and time constraints. Similarly, the survival rate of students in vocational

courses is higher by 68.6% than in college or university degree programs. Furthermore, educational

institutions have restructured their course offerings in order to give way to more marketable and in

demand courses such as medical and allied courses, namely nursing, and dissolved unpopular courses

such as philosophy.

The increasing matriculation fees of tertiary education and restructuring of tertiary educational

institutions has resulted to a mismatch of talent supply and demand in the Philippines. Lesser high

school graduates proceed to earn a degree and even lesser get to graduate, thus, further limiting the

pool of Philippine college and university graduates that can be chosen from. While highly industrialized

multinational companies require highly engaged, skilled and productive workforces, 50% of the nations

employment force is composed of unskilled labor workers and farmers. The remaining 50% is subdivided

among managers and supervisors, service workers and shop and market sales workers, traders and

related workers, and plant machine operators and assemblers. The present state of our educational,

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economic and technological development is not cognizant of the highly specific and technical jobs that

the emerging global economy presents.

While recruitment challenges are nothing new, employers have greater difficulties attracting

and retaining the required workforce because the talent supply and talent demand gap is growing. Firms

that aspire to hire skilled professionals have three alternatives: (1) hire local; (2) hire returnees; and (3)

hire expatriates.

Local employees are recruited via classified ads placed in newspapers or in job fairs. Inadequate

number of skilled hires obliges firms to provide on the job trainings, however, due to competitive

employers, the possibility of industrial poaching, wherein well-equipped workers are bribed by another

firm via higher wages and better benefits. The repercussions of such actuations reverberate further into

the economy by causing wage inflation and encouraging unreasonable expectations from employees in

terms of benefits.

Hiring returnees and expatriates is also another strategy to acquire skilled professionals.

Nationals who have overseas experience are familiar with both Western and local business practices.

Language barrier, housing and visa requirements are also not a problem for returnees. Expatriates or

foreign nationals, on the other hand, are affected by more stringent restrictions such as visa

requirements and higher income taxes. Both returnees and expatriates require way higher salaries than

local employees and often demand for greater benefits.

Having established the increasing gap between talent demand and talent supply, the question

now is: what can we do?

University grounds are prime recruitment sites for companies. Establishing a sustainable

partnership between the industry and the academe could result to an environment within university and

college campuses that is conducive for talent development. Curriculum designs could be modified to suit

the varying demands of the industry.

Furthermore, with greater access to the campuses, on-site marketing can be done strategically,

drawing in talents, who have the skill, yet hesitate to join the local workforce. In achieving this goal, the

students attitudes towards entry-level jobs and overseas jobs should be changed maybe via workshops

and seminars sponsored by the firms.

Bridging the gap between the educational system and employment market would require the

cooperation and collaboration of the industry, government agencies and educational institutions. The

main goals of the collaboration should be to draw in talent into the national industry and establish a

partnership of the industry and the academe.