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Job
advertisements are on the decline in November, but that
doesn’t worry Noel de Leon, president and chief
executive of Mercer Human Resource Consulting. What
bothers him is the raging “war for talent” that has
lured skilled professionals and managers away from the
Philippines in rising numbers, a phenomenon that many
local companies seem to be oblivious to.
In
November, BusinessMirror’s Job Ads Index declined by 7
percentage points from its base in June, dragged by
broad-based declines from practically all sectors of the
economy. Sectors that posted double-digit declines
include agriculture, manufacturing, electricity, gas and
water, and business consulting. Sectors like engineering
and construction, cyberservices, public administration
and defense, education, health and social work; and
international organizations posted positive growth but
they were not able to prevent a wholesale slide of the
index.
BusinessMirror has been tracking down job advertisements
since June as a way to monitor short-term business
confidence as well as help determine the dynamics of
labor demand. The assumption is that companies are
likely to post advertisements for jobs if they expect
higher volumes of business in the months ahead. That is
why job advertisements tend to rise prior to the peak of
business activity in a given period. Conversely,
business managers go slower on seeking manpower when
purchase orders are not rising.
In
November the total job advertisement posted in three
leading print media and three leading online job sites
ranked by Alexa.com reached 24,354, a 7-percent decline
from its base in June. The top advertisers includes
cyberservices, construction and engineering, human
resource companies, manufacturing; wholesale and retail,
hotels, restaurants and resorts, financial
intermediation, transportation, storage and
communication, and health and social work. These sectors
comprise more than 88 percent of the total job
advertisements.
In terms
of skills demanded, more than 60 percent of the job
advertisements were for professional and technical,
clerical and related jobs, and administrative and
managerial. The rest is shared by production and related
workers, sales and service workers. To the extent that
these advertisements reflect the formal economy, the
labor demanded seems to show that the labor market is
still primarily looking for “knowledge workers.”
Seasonal
factors
On a
month-on-month basis, the total number of job
advertisements peaked at more than 35,000 job
advertisements in July. It went down slightly in August
and rose continuously to reach almost 34,000 in October,
then plunged to more than 24,000 in November. But
Mercer’s de Leon is not worried.
“You
have to consider that people are not leaving their jobs
because it’s the time for Christmas bonuses. That’s one
critical factor why companies are not posting job
advertisements,” said de Leon.
“Even
executive search firms know they can’t get people
because normally companies give bonuses on or after
Christmas. Some companies still have to compute and here
in Mercer this is true especially for top management.
Our performance bonuses are given March 2007. So if you
want to hire me, you have to consider that,” he added.
Many
employees, he explained, could not even express any
intention to leave the company prior to the release of
their performance bonuses because that would
automatically disqualify them from receiving such
windfall.
“On the
day I have to receive the bonus, I should still be with
the company,” de Leon said.
“In the
Philippines, performance and Christmas bonuses are given
in December so normally, recruitment for executive
positions, as well as professional and technical people,
is done after December. So they lie low in November and
December,” he added. “Besides, it’s the Christmas season
and people are busy preparing for Christmas and New Year
to bother about leaving or looking for a new job.”
De Leon
expects the job ads to pick up in March and April. “So
that trend is natural and we should not worry about it,”
he said of the seasonal decline.
What
worries de Leon is what he calls “the war for talent”
that is raging in the Asia-Pacific region that is luring
away a lot of skilled professional, managerial and
technical people in the Philippines that are needed by
the local economy.
“Poaching” for talents, he explained, is particularly
acute in the information technology and information
technology-enabled sectors as well as engineering and
construction. Too bad, he said, that it is occurring
right at the very moment when the country’s
cyberservices industry is trying to grow and mature.
In
November, more than 30 percent of the job advertisements
were for overseas placements. Economic sectors with
higher shares of posted job ads for overseas placements
included mining and quarrying, electricity, gas and
water; construction and engineering, hotel, restaurants
and resorts, transportation, storage and communications,
and health and social work.
Aging
population
“There’s
a war for talent out there because China is growing so
fast and its population is aging,” explained de Leon.
“Japan also has an aging population. If you look at the
demographic profile, its working population has been
going down since five years ago. But the trend for
rising demand for skilled workers is really
Asia-Pacific-wide.”
In a
regionwide survey by Mercer Consulting this year, de
Leon revealed that 50 percent to 77 percent of companies
in Japan, South Korea, China, Hong Kong, Taiwan,
Singapore, Malaysia, Thailand, Indonesia, Vietnam,
Australia and New Zealand have expressed hiring
intentions even as many of them are experiencing
double-digit attrition rates.
“And
where are they going to get new talent? Naturally, many
of them would recruit from the
Philippines,”
de Leon said.
In terms
of skills, the results of BusinessMirror’s job
monitoring in November indicate that the poaching for
skilled workers was actually more acute in production,
clerical and related skills, and services workers. While
overseas demand for professional and technical and
managerial were within the 9 percent to 15 percent
range, about 45 percent to 59 percent of the job ads for
production, clerical and service workers were for
overseas placements.
But de
Leon believes that the low percentage shares for
professional and technical could be understated as
foreign recruiters most of the time simply approach
potential recruits directly.
“Because
of the information technology these days, it’s so easy
for recruiters to get to their potential recruits. We
were in Bicol visiting relatives when my son, an IT
professional, got a call from abroad. They negotiated
right at that moment and in a few weeks’ time my son
left the country,” said de Leon.
This
competition for talents has affected almost all sectors
of the economy. According to the Personnel Management
Association of the Philippines (PMAP), industries
suffering from high turnover rates these days include
pharmaceuticals, banking, consumer goods, hotels and
restaurants, electronics and semiconductors, and
telecommunications and computers. About 33 percent to 59
percent of employees leaving their jobs in these
industries, according to a PMAP survey, went abroad.
This
trend was recently confirmed by Watson Wyatt’s Total
Rewards Survey of 148 companies in the
Philippines
engaged in manufacturing, business process outsourcing,
banking, and other industries.
“Eighty-two percent of these 148 companies reported an
average turnover rate of 12 percent [in 2006],” said
Patrick Marquina, associate consultant for Watson Wyatt
Philippines, a human resource company.
Retention tools
As such,
companies are seeking innovative ways to attract and
retain employees.
“Retention now is the major issue among companies
operating in the Philippines,” said Ging Igual, a growth
leader at Watson Wyatt Philippines in an interview with
BusinessMirror.
It’s a
particularly serious problem for electronics companies
that are not willing to pay for talent, added Fred
Blancas, vice president for corporate communications of
International Microelectronics Inc., a global
electronics company belonging to the Ayala group.
“What I
think electronics companies should do to retain their
excellent workers, especially the engineers and other
technical workers, is to compensate them well and, more
important, provide them a fair share of challenges,” he
said.
When
asked about their strategy to retain people, Blancas
replied: “First, we ensure that our managers and
engineers get the right compensation package. Second, we
try to give them challenging opportunities for growth.
Lastly, we try to provide a favorable working
environment. We also inculcate in them a sense of pride
in being an employee of a Filipino company that has gone
global. We tell them that our being global offers plenty
of advantages to them and they just have to take more
responsibility upon themselves—be innovative, flexible,
agile—to reap the rewards.”
According to Igual, however, retaining good people is
not all about giving higher pay. Among call centers and
outsourcing companies, an important part of their
retention tools, she said, include providing good
cafeterias and pantries and gyms. Most companies could
only pay so much so they had to devise “creative rewards
systems” that provide more incentives for greater
productivity, she said.
“There
is a saying which goes like this: People join a company
but leave a boss. In a survey that we did several years
ago, the boss is the No. 1 reason for leaving. Lack of
career path, lack of feedback, lack of recognition, no
learning or training development programs, unchallenging
work, etc., are higher on the list. Pay was, I think,
No. 9 or 10 from the top 10 reasons why employees
leave,” explained de Leon.
According to de Leon, retention tools are a mix of a
competitive base pay, benefits, career, culture, working
environment and even the brand or prestige of the
company.
“People
are attracted to successful companies. People want to
become a member of a winning team. [Charismatic]
leadership also plays a major role in attracting and
retaining people. Salary increases must be dictated by
the market and the company policy on where they want to
position themselves relative to the market,” de Leon
said.
Another
strong retention tool is providing housing, Igual said.
Some companies also link up with top universities to
provide MBA degrees to top managers and high performers,
she added.
“For IT
people, they are focused on training while research and
development companies provide continuous exposure to
what’s new in the business,” she said.
Igual
explained that in many cases, the retention tools
employed by companies would depend on the age and
responsibilities of workers. Younger ones, or those who
are in 20 to 25 years old, usually go for cash options
as well as opportunities for travel and training. Those
in the 30s who are married with children would rather
have security and medical benefits, as well as
educational opportunities. Those in their 40s care about
loans and housing. And those 50 and above usually want
golf shares, good retirement insurance, longer vacation
days and burial assistance.
“If you
are targeting the X and Y generations, you must design
your compensation and rewards based on the need of these
types of people. They want cash and they want it now—not
after 20 years in the form of retirement benefits. These
people don’t intend to retire in your company. They are
in transition to a better paying job,” de Leon said.
He
added: “If you are a research and development company,
you want your scientist to stay and work in your company
until they die—they have your technology, patents,
proprietary knowledge, etc. in their heads. When they
leave your company, they carry it with them and can
share them to their next employer. If you want your
people to consider you as their first and last company,
you must have a very attractive retirement and other
long-term benefits package.”
De Leon
also suggested making these key employees part-owners by
offering them company stocks.
For
Intel Philippines, a leading electronics firm, its
retention strategy is enhancing industry level supply of
technical experts and engineers.
“We
recognize this difficulty of getting and maintaining
talent. Toward this end, we have our higher education
programs as a means to ensure a steady pool of qualified
talent,” said Maria Teresa Pacis, external
communications manager of Intel
Philippines.
“These programs are geared toward encouraging more
people to obtain Masters in Science and other higher
qualifications like PhDs. Last year, we launched the
University of the Philippines’ degree program, an online
program to encourage working people to work toward a
masteral degree.”
As Igual
stressed: “Creativity matters because you can’t always
raise your pay.” |
