Despite plans of the current administration to scrap contractualization, the Philippine labor force is still expected to keep its slot among the most desirable work forces globally.
The Philippine labor market was ranked third out of 75 countries/economies worldwide in the 2016 Contingent Workforce Index (CWI) released by ManpowerGroup Solutions.
The country’s labor force was also the top market for contingent workforce cost efficiency in the entire Asia and the Pacific region.
“While ending contractualization could make the Philippines less competitive for employers seeking a less-skilled, lower-cost work force, the overall impact on the contingent labor pool will likely be insignificant if organizations have the right mix of contracted, freelance and project-based labor,” the report stated.
Countries are ranked on their overall environment for contingent work-force engagement across four categories, namely, availability, cost efficiency, regulation and productivity. The report stated that each category can be weighted differently depending upon the strategic priorities of an organization.
In the 2016 round, the Philippines and India both benefited in the adjustment in the computation of the weights for the categories, particularly in availability, which was given a higher weight.
Availability of the work force pertains to the size of the labor market. The Philippine labor force is 41.342 million-strong as of the 2015 Annual Labor Force Survey data.
“The Philippines rose to third due in part to moderate regulatory considerations, a large work force and high-cost efficiency. While English proficiency and the availability of skilled labor remain an important metric in regard to the CWI, weighting of the availability metrics shifted to allow a higher ranking for markets where a large work force is available,” the report stated.
If the Duterte administration ends contractualization, ManpowerGroup Solutions said 30 percent of the Philippine work force, which subscribe to contract labor, will be affected by the measure.
ManpowerGroup Solutions said the most affected will be the construction sector with 71 percent of workers are considered end-of-contract workers. However, overall, ManpowerGroup Solutions said the impact will be minimal, especially if employers have the “right mix” of workers in their company.
“The Philippines remains one of the world’s largest and most cost-effective contingent labor pools, especially with regard to skilled IT and call-center workers. While [President Duterte’s] proposed new law requiring all new hires who have worked continuously for six months to be ‘regularized’ is worth monitoring, his vow to put an end to the ‘contractualization of labor’ will have a minimal effect on most industry segments,” the report stated.
In the new report, New Zealand leads for the second consecutive year, demonstrating an optimal environment for use of contingent labor.
Other countries that make up the top 5 apart from the Philippines are Singapore (2nd), Israel (4th) and India (5th) moved to the top of the leaderboard in 2016.
The United States and Canada fell from the top five global markets, dropping to sixth and seventh from second and third, respectively.