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(First of
five parts)
When the
management of Fairchild Semiconductors, a global
electronics firm, offered industrial engineer Manuel
Villa, 32, a management job in Singapore three years ago,
he didn’t hesitate to grab the offer. Not only was the pay
great—five to six times higher than what he is earning in
the Philippines—moving to Singapore, he believed, could
also open doors for future career advancement.
“The No. 1
factor [for my decision] was exposure—the opportunity to
work and be trained in a different culture, in a
headquarter-corporate level setting, which should open a
lot of other doors for me in the future,” Villa explains.
“It will greatly help my marketability should I decide to
pursue a position in our US office or other companies,
either in
Singapore, other
countries, or even back home in the
Philippines.”
Fairchild
has multiple operations in the region, including South
Korea, Penang in Malaysia, Suzhou in China and Cebu in the
Philippines. Since most of the sites are in Asia, the
company decided it was time to set up a regional office.
“Singapore
is the central and best location. A group was formed, by
picking out specific individuals already working for the
company, to form the pioneer team. I was one of those
picked and endorsed from the
Cebu site,” boasts Villa.
Villa is a
typical beneficiary of what human-resource experts
describe as the intensifying global “war for talent,” as
companies—both local and foreign—fight tooth and nail for
skilled workers all over the world. And while the stiff
competition for talents is benefiting Filipino
professionals, private companies are concerned that the
loss of local talent would hamper the competitiveness of
the domestic economy as companies find it hard to match
the offers from multinationals.
A growing
concern
In a study
by Grant Thornton International released by the accounting
firm Punongbayan & Araullo (P&A), 43 percent of Philippine
companies picked the scarcity of skilled labor as the
“major roadblock” to their expansion plans. Last year,
only 15 percent of Philippine companies complained of the
same problem.
With the
steady exodus of the country’s best and brightest, it was
only a matter of time, the study warned, before local
businesses would begin to show signs of strain over the
brain drain.
“The
results this year clearly reflect the problem that
employers across industries are experiencing, which is the
draining of our local talent pool,” says P&A’s managing
partner and chief executive Greg Navarro. “Even in the
accounting practice, we are struggling to compete with
foreign firms that see the Philippines as a good resource
for highly trained, English-speaking certified public
accountants.”
Indeed,
official statistics from the Philippine Overseas
Employment Administration shows that the country has been
practically bleeding talents. Since 2000, the Philippines
has been sending an average 79,000 professional and
technical workers, 500 managers, 4,000 clerks and 70,000
production workers a year, many of whom are college
graduates.
Within the
same period, 10,000 nurses have left the country each year
for Saudi Arabia, the United Arab Emirates, the United
Kingdom, Ireland, the US and other destinations. On
average, close to 13,000 caregivers, many of whom have
nursing backgrounds, have left the country annually, many
of them going to Taiwan, Israel, Canada and the United
Kingdom. Japan and South Korea were the favorite
destinations for performing artists, averaging 55,000 a
year, while IT workers have been leaving at the rate of
300 a year to countries like Saudi Arabia, the US,
Malaysia, Singapore and the United Arab Emirates.
The actual
deployment of IT workers should be higher as most of them
who are now working in countries like
Singapore
and Malaysia were directly recruited by their would-be
employers. Others simply packed their bags and applied
directly to companies. It’s so easy to do so because
Singapore, being a member of the Association of Southeast
Asian Nations, does not require visas from travelers from
the Philippines.
“There are
many Filipinos here [in Singapore], especially the
professionals, middle-income class,” says Villa. “They are
into IT and other fields as well, like management,
restaurants and hotel-related, engineering, and logistics.
Besides domestic helpers, I have met Filipinos working as
waiters, department-store personnel, clerks, engineers,
managers, academicians, church workers, airline personnel
and others more. The Filipino population here has already
reached 120,000, and still rising.”
Affecting
all sectors
Analysts
used to think that the diaspora of professionals only
affected a few sectors of the Philippine economy, like
seafaring, aviation, engineering, construction and
nursing. But in the last three years, it has started to
affect almost every sector of Philippine society. The
Philippines is sending journalists to Singapore, Saudi
Arabia and the United Arab Emirates; engineers and oil-rig
workers to Nigeria, Russia and the Gulf states; speech and
physical therapists to the US; and mining engineers and
geologists to Australia and China. There are now Filipino
accountants in
Silicon Valley in
California, and some are heading for Australia.
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.
“In just
12 months, we lost about a dozen human-resource officers
to other companies,” says a human-resource officer for a
pharmaceutical company.
Even the
public sector is increasingly being affected by the war
for talent. The country’s weather bureau and the Mines and
Geosciences Bureau are losing weather forecasters and
geologists to the private sector here and abroad. The
Department of Science and Technology (DOST) is hard hit as
well. Sources from the DOST reveal that out of almost
3,000 scientists with PhDs in various scientific
disciplines, almost 500 have already left the country in
the last few years.
Even the
military has not been spared from this phenomenon. Sources
from the Philippine Army say the Australians are currently
recruiting Filipino soldiers.
“They [the
Australians] know that Filipino soldiers are well-trained
in the different occupational specialties—infantry,
cavalry, armor, signal, engineer, etc.—which makes them
competent and efficient and can communicate or verbalize
very well,” says an Army officer who doesn’t want to be
identified. “The Armed Forces of the
Philippines
is using American military doctrines, and it is compatible
with Australian military doctrines.”
The
military officer adds that the Australians are luring
Filipino soldiers with citizenship offers. Filipino
soldiers are also being recruited because of their
exposure in asymmetrical warfare or counterinsurgency
operations. “For several decades, our soldiers have been
fighting the NPA [New People’s Army], secessionists and
terrorist groups. The Australians do recognize this
Filipino talent,” the officer says, adding that Filipino
soldiers who once served as United Nations peacekeepers
“established connections during their tour of duty and
after they retire or resign, they join the US or UN as
civilian contractuals.”
Peter
Goellnicht, principal migration officer of the Australian
embassy here in Manila, however, denies that Australia is
recruiting soldiers from the Philippine Armed Forces. In
an interview, however, he admits that he is aware of “a
couple” of former Filipino soldiers who were granted visas
on the strength of their professional qualifications as
soldiers.
Drivers of
the global talent war
Noel de
Luna, country manager of Mercer Consulting, a global
human-resource company, attributes this increasing
competition for workers in the Philippines to demographic
changes in the US and the Asia-Pacific.
“There’s a
war for talent out there because China is growing so fast
and its population is aging,” says 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 about rising demand for
skilled workers is really Asia-Pacific-wide.”
In a
region-wide survey by Mercer Consulting this year, de Leon
reveals 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 talents? Naturally, many of them
would recruit from the
Philippines,”
says de Leon.
Besides
demographic factors, the larger forces of globalization
seem to be the bigger explanation. In a paper entitled
“Global Competition for Skilled Workers and Consequences,”
Manolo aAbella, a Bangkok-based labor-migration expert
formerly connected with the International Labor
Organization, says that the raging war for talent results
from the growth of global supply chains as liberalization
of trade policies has made it possible for transnational
companies to move production to cheaper locations.
“The
emergence of these global production structures have been
everywhere, accompanied by greater movements or transfers
of technical and managerial personnel,” says Abella.
“Another important development has been the growth of
informal as well as flexible forms of employment, opening
markets for foreign workers willing to enter occupations
or sectors abandoned by natives.”
Still
another factor is the rapid expansion of the knowledge
economy and the demand it has created for a ready supply
of young IT professionals, he adds.
According
to economist Dieter Ernst, senior research fellow of the
East-West Center based in Honolulu, the trend towards
“downsizing” among American firms, is also a major factor.
Ernst explains that because many American companies
operate on a very lean staff, they have to scramble for
specialized skills once demand from buyers shifts to new
products that require new technologies.
“For many
high-tech companies, competing for scarce global talent
has become as major concern,” says Ernst. “As a result,
global sourcing for knowledge workers now is an important
global manufacturing and supply chain strategies. The goal
is to diversify and optimize a company’s human-capital
portfolio through aggressive recruitment in global labor
markets.”
But what’s
adding fire to the global talent war is that countries,
especially those suffering from low population and
labor-force growth, are engaged in systematic recruitment
in response to the growing skills scarcity. The US,
Canada, Australia and Singapore are among the most
aggressive.
Canada
and Australia have been offering permanent residence and
citizenship as incentives for skilled migrants. Through
its H1-B visa, Americans have been luring IT workers to
Silicon Valley. Middle-East countries like Saudi Arabia
and the United Arab Emirates have been giving temporary
admission to skilled engineers, welders, pipe fitters,
accountants, journalists, and advertising people from the
Philippines and other Asian countries. Australia has also
been using its universities as “academic gates” for
attracting skilled migrants from all over the world.
Singapore
has an office, Contact Singapore, that actively recruits
talents from all over the world, offering incentives to
would-be immigrants to become permanent residents and
eventually become citizens.
“The
government does encourage permanent residents with good
standing to stay,” says Villa. “They extend all of the
basic services they offer to their citizens, including
medical services, wherein the social system will help you
pay only a fraction of the medical costs. There are tax
exemptions—tax rebate payouts—if the government performs
well and has a budget surplus.”
Winners
and losers
Certainly,
skilled workers like Villa are the main beneficiaries of
this global competition. Because of the increasing
scarcity of talents, vulnerable companies are upgrading
pay scales for their skilled workers in an effort to stave
off staff piracy from other companies.
Patrick
Marquina, an associate consultant for Watson Wyatt, a
human-resource firm, notes that this year, 148 companies
in manufacturing, business-process outsourcing, banking
and other industries operating in the Philippines have
raised their pay scales by an average of 9.21 percent,
almost three times over the country’s inflation rate.
Rising pay scales, Marquina explains, are particularly
high in outsourcing and IT-related businesses.
Mercer-Philippines, another human-resource outfit,
confirms the trend in a similar survey. Floriza Molo,
information product solutions business leader, said 180
companies involved in the consumer, computer and
telecommunications, pharmaceutical and other industries
have, in the past year, increased their pay scales by an
average of 8.13 percent and forecasted an 8.34-percent pay
hike in 2007.
“In the
Philippines, the scarcity of skilled workers has led to
continuous increase in compensation and benefits for all
the industries,” says Molon. “Though most companies remain
conservative in giving increases, overall national
competitiveness has driven local companies to compete with
multinationals to be more aggressive in terms of base pay
and giving premium to the employee.”
Analysts
and corporate executives are worried that the continuing
diaspora may hurt the country’s prospects for development.
A critical mass of native people, Abella explains, is
necessary to create new knowledge and technologies that
are essential for progress.
“Experience has richly shown that human capital, rather
than natural-resource endowments, is the key to economic
development,” says Abella. “The current competition for
the highly skilled has naturally raised alarms that it
will further aggravate the problems of developing
countries in creating a critical mass of professionals and
technical workers needed to raise productivity.”
(To be
continued) |
