Solving the jobs-skills mismatch puzzle

ASK human resource practitioners and they will swear the jobs are there but employers are having a difficult time finding the right kind of people. The problem, they say, is a mismatch between jobs offered and the skills provided by the country’s educational system, a weird sort of scarcity amid plenty that is being accentuated by the rapid growth of business-process outsourcing, and the globalization of the Philippine labor market.

But how could we bridge this widening chasm? First, we need to bridge our understanding of the jobs-skills mismatch and objective condition on the ground.

Many policymakers seem to assume that schools tend to produce ivory-tower intellectuals and artists who will starve because they are not what employers need. The schools, they say, should encourage “employable skills”—short hand for worker bees trained in vocational and technical (VocTech) education; warm bodies who fiddle, tinker and produce concrete saleable products and not those woozy-headed thinkers who agonize over the meaning of life. The schools, they say, should cut emphasis on liberal education and focus on “hard” physical sciences and VocTech.

These views stem from our martial- law hangover when Ferdinand Marcos imposed the National College Entrance Examination to screen out and channel more people into one- or two-year courses. But do these old notions about the skills-jobs mismatch still stand?

The answer is no. BusinessMirror’s job ads monitoring (JAM) project, now on its fifth month, shows that the world is no longer what it used to be. This much is obvious in the October JAM report, where employers in three major national newspapers and three major online jobsites posted almost 35,000 advertisements for jobs.

The top 20 advertisers, from the highest to the lowest, are: cyberservices; construction and engineering; human resource/manpower firms; manufacturing; wholesale and retail; hotels, restaurants and resorts; financial intermediation; transportation, storage and communication; health and social work; education; personal, community and social services; real estate and renting; business consulting; mining and quarrying; advertising and promotions; extraterritorial bodies; and agriculture, fishery and forestry.

And what sort of skills do they require? Again, in descending order: professional and technical, clerical, production and related workers, administrative and managerial, sales workers, and service workers.

These numbers indicate that employers require skilled people, most of them highly schooled. Data seem to suggest that employers need both those who tinker and produce concrete stuff and those who think and produce intangible knowledge-rich products and services.
The recent study by the Personnel Management Association of the Philippines (PMAP) supports this paper’s JAM findings. In a study that covered fast-growing industries like pharmaceuticals, banking, consumer goods, hotels and restaurants, semiconductor, information technology, telecommunications, retail, and call centers, employers say they want people who have good communications skills, with strong analytical and conceptual skills, and have initiative.

These preferred basic competencies perfectly sound like those “soft” skills from a good liberal education. Certainly, the country needs more programmers, engineers, architects, physicists, welders and pipe fitters, but the workplace these days demands no less than a good liberal or general education for these people of the hard sciences to make a difference.

This new information on skills mismatch suggests that universities don’t have to junk their liberal and social sciences. In fact, the real issue seems to be how to strengthen it to compliment the hard sciences and the VocTech.

Gone are the days when all that engineers or chemists had to do was dazzle people with designs, numbers and formulas. Now they need to have leadership and social sophistication as well. They need to have self-confidence, assertiveness, flexibility and maturity; a global perspective and awareness of their social milieu, in contrast to the old notion of technical guys as introverted, remote number crunchers.

So, do our schools have what it takes to produce the workers demanded by the new, transformed and globalized workplaces? The evidence so far is mixed. While we have several centers of excellence providing quality education, the overall verdict seems to say the schools don’t produce enough “employable” graduates. Not even the VocTech school, according to PMAP, as their graduates are not doing good in the labor market either despite the rising demand for workers here and abroad. In the last six months, 80 percent of the job advertisements in construction and engineering were for overseas placements. Yet, according to the POEA, the Philippines could only fill half the job orders each year, a proof that those VocTech schools are not providing the required skills either.

What we see here therefore is not just a problem of mismatch, but a complete disconnect of the educational system with the dynamics of the labor market.

Solutions? Experts in the last tripartite human resource summit hosted by PMAP suggested greater industry-academe tie-up, especially in curriculum development. That’s fine, but it may not be enough to bring this country out of its low-growth equilibrium. If we want world-class education that could make this country the dragon economy we always dreamt of, we need a strategic look at how we fund the education of our children; and to look at education as an investment on the country’s future.

We are not talking of giving more money to the Commission on Higher Education. The idea is to set up a huge fund for a student loan program similar to those in the United States and Australia. Australians, for instance, have the so-called Higher Education Contribution System (HECS), lately renamed HELP or Higher Education Loan Program, where students borrow money from the government to be repaid once they are gainfully employed.

They could use such money to enroll in whatever school they want. To ensure that schools provide quality services—and weed out diploma mills—independent bodies should develop and provide benchmark information to the public, like a school ranking index to denote quality, to guide students’ decisions. This information system will pressure schools to innovate and improve as the annual ranking or index would penalize lousy providers by not enrolling in their schools.

Sometimes, policymakers wonder why it’s so easy for the best and brightest to leave for foreign shores. Economics certainly is the reason. But it’s also because many of them feel “the system” doesn’t care enough to invest in their future. A student loan program could meet this problem. And bridge the gap between the rich and the poor that, over history, has been causing their deep social fissures and hampering our efforts toward progress.

The clue is in Leyte

WE have found some vital answers to the constant dilemma over the country’s poor educational system and they’re not in the glitzy, expensive, air-conditioned rooms of exclusive schools here in Metro Manila and other urban areas. It’s in the remote town of Tomas Oppus in Southern Leyte where visitors have to travel hours of unpaved roads just to get to Rizal National High School that recently topped the National Achievement Test for Freshmen Students.

Based on the story of this paper’s reporter Rommer Balaba, Rizal National High School (RNHS), being a public school, has nothing to show in terms of fancy gadgets and technology. But its teachers, parents and community leaders have the will and concern to ensure that students get to school and are taught properly despite the limited resources they have.

Asked about the reasons for the school’s success, Violeta Merin-Alocilja, Leyte’s division superintendent, had a short, self-explanatory answer: “Stakeholder participation, which includes the barangay leaders, parents, and local government executives, coupled with teacher dedication. There is a strong linkage between the school and the community. Parents, in particular, realized they have to give support either technically or financially so that teachers can focus on teaching.”

Now that—“stakeholder participation”—is really nothing. We often hear this word being mouthed by do-gooders and people who dream for change. The only difference is that people in Leyte took it seriously and voila, they got the high scores in areas such as English, mathematics, science, Filipino and social studies. It helped that the Asian Development Bank (ADB) provided soft loans in terms of teacher’s training, textbooks and new learning interventions. But that simply proves the point that given a little more resources and a lot of innovative community involvement, it’s possible for any school in the Philippines to raise its quality of education. There must be a way for the Department of Education to distill the lessons from this social experiment and upscale the efforts to the larger educational system so we could achieve drastic improvements in the quality of education in the Philippines.

We say we need drastic improvements in the country’s educational system because the Philippine economy, nay the entire world, is changing fast. In the last three years, the Philippine economy has been growing quite decently at 5 percent to 6 percent and there are indications it might yet achieve 7 percent a few years from now, and yet unemployment rate in the country has remained high at more than 8 percent. Why?

The usual reason is about “jobless growth” or the inability of the economy to generate enough jobs for the new entrants to the labor force, despite expansion in economic activities. Others say we are producing overqualified college-degree holders when all the economy needs is an army of skilled labor trained from vocational and technical schools.

Sounds valid enough but recent trends in the economy tend to show that these assumptions are no longer valid. Human-resource practitioners these days swear that jobs, whether abroad or within the country’s borders, are being created fast but employers are finding a hard time finding the people “with the right package.”

Main drivers of growth (like electronics and cyber services) these days require more flexible-knowledge workers that are not being provided by the country’s school system in greater numbers despite the rising number of students entering and leaving the school system. It’s not only that we are running short of skilled welders and pipe fitters; we are also running short of call-center agents, accountants, mining engineers, doctors, nurses, teachers, information-technology professionals, among many skills that require four or five-year college degrees or training.

The country will increasingly feel this problem as the Philippine economy goes up the value chain toward the “five-star outsourcing,” which includes analytics, market research, valuation research, investment research, online teaching, patent filing and media content supply.

And why this new trend? It’s because globalization has significantly transformed the workplace. Employers these days are increasingly dealing with global clients in a business environment that is changing fast and has become so diverse. Customers, most of them well-informed, are demanding. Organizational structures are flat, meaning that employees are expected to engage or get involved in decision making as corporate organizations compete and innovate.
That is why—according to the Personnel Management Association of the Philippines (PMAP)—the standards by which employers make hiring decisions have increased significantly. At the very least, they need three core competencies including excellent and written English, analytical and conceptual thinking, and initiative.

Employers, according to PMAP, need people who can write and speak excellent English with confidence, employees who can make presentations, and can understand foreign accents. They need people who can break down problems systematically, process large amounts of information, see consequences and implications, connect the dots, and make logical conclusions. In a highly competitive and fast-changing world, they need staff who persist in problem solving—people who do more than what are expected of them, and address problems before they are asked to.

In short, employers these days increasingly need dynamic-knowledge workers which the country’s school system is not providing in adequate numbers. For long, this country has suffered underinvestment in education. That’s the reason why we can’t seem to address unemployment amid economic expansion.

It is within this context that the Sogod experiment in Leyte is very important. Certainly, we need more schools with sophisticated facilities and highly trained teachers. But that takes a lot of resources and time. But we could still fast track the upgrading of the country’s educational system by learning what the people of Southern Leyte have done and take them to heart the way they did.

Broken English, broken buildings

IT was a perfect killer quake. Just when people thought the danger lies up ahead at grumbling Mount Merapi, the quake suddenly came like a thief in the night, claiming the lives of 5,400 people, and still counting. It happened in Indonesia; it could happen in the Philippines. The question now is—is the Philippines ready?

The Philippines practically suffers a quake each day, almost all of them harmless temblors. The website of the Philippine Institute of Volcanology and Seismology (Phivolcs), however, lists about a dozen destructive earthquakes since the 60s. Among the most prominent of these were the magnitude 7.3 quake in Manila that destroyed Ruby Tower and killed 200 in 1968; as well as the 7.9 Moro Gulf quake that unleashed tsunamis and killed more than 6,000 people. In 1990 another killer quake leveled the summer capital of Baguio City and toppled a school in Cabanatuan City. Is the Philippines ready for another for another big temblor like these ones?

Supposedly, local government units have their disaster coordinating councils tasked to prepare for these disasters and mitigate their impact should they arise. But the recent list of buildings that are considered highly at risk from earthquakes are no cause for comfort. The list indicates that 99 percent of those in the list are school buildings, specifically public school buildings. The list covers Metro Manila, only; we could assume that the situation could be as worse in other densely populated cities outside the National Capital Region. Should another Magnitude 7 temblor—God forbid—occur, school children, most of them sons and daughters of poor families, are the ones that are likely to be affected.

Certainly, addressing natural disasters means that the county should improve its capability for disaster preparedness, mitigation, relief and rehabilitation. The government should also review the country’s building code to determine its relevance to account for changes in urban land use and development. The local government units should play an important role in this process as they are mandated to do comprehensive land use and development planning. But given the situation in the country’s public school system, its rickety buildings and structures, it might be necessary for the government to look at the country’s budget for education from the view of disaster mitigation. This is important considering that the Senate is currently deliberating the 2006 budget.

In its present form, the proposed budget allocates only P5.86 billion for basic educational resources, such as classrooms, teachers, seats, and textbooks. Senator Mar Roxas has noted that this amount is inadequate to close the gaps of 41,197 in classrooms, 10,517 in teachers, 1.5 million in desks, and 41.32 million in textbooks—gaps which DepEd estimates would need P22.88 billion more to complete. Meaning, what is proposed in the budget is just a little over a fourth of what’s needed.

Lately, Sen. Mar Roxas has pushed for the realigning of P9.18 billion from the slashed items to increase the budget of the Department of Education (DepEd), insisting that education and human resource development should take precedence over other State priorities. He said the additional P9.18 billion should go to basic educational resources, teacher training and private school subsidy. The senators would be doing a signal public service, and prove critics wrong that they are an overpaid, useless bunch, by heeding the realignment proposal. It would serve justice if they would also provide specific amounts necessary to refurbish those rickety school buildings.

This is the least that the government could do. If the country’s school system is so challenged fiscally and manpower-wise it cannot teach children proper English—or guarantee basic proficiency needed for today’s jobs, at least the schools should ensure they are not maimed, bruised or killed should another perfect killer quake—heaven’s forbid—happen.

Job creation: every thing starts with the schools!

MEMBERS of the Employers Confederation of the Philippines, closing their national conference on Tuesday, vowed to work with the Philippine government to “improve the match between jobs and skills” in the country. Specifically, Ecop proposed that both parties conduct an inventory of skills critically needed by the nation and identified priorities as certain job-rich industries including cyberservices, agribusiness, health services, mining, creative industries, hotels and restaurants, medical tourism, aviation and maritime sectors.

This is the best thing both parties could do to address joblessness in the country. For far too long, analysts have been crying about jobless growth in the country, until it recently became apparent that jobs are being created yet there are few takers because graduates don’t have the qualifications. Ecop, however, should go beyond skills inventory to address the problem. That effort only addresses the question of labor supply. Ecop has access to information on labor requirements of companies all over the country. The group, therefore, should complement this effort by providing information on labor demand. The idea here is the setting up of an efficient labor market information system down to the regional level so that parents and students would be guided in making career decisions. Right now, high school students don’t have any idea what to take up in college. They rely largely on the advice of their parents, neighbors, and relatives who are themselves ignorant of the labor market conditions.

We suggest that the private sector work more with the schools and universities. Lacking a good labor market information system to guide them, most schools are also at a loss as to what sort of disciplines and curricula to offer—part of the reason why most of them end up as diploma mills. The best thing the employers could do is sit down with these schools, examine their course offerings and tell them what exactly are the skills needed by the work place so that graduates would not have a hard time doing their transition from school to work. The country’s telecommunications and cyberservices industries have started to do this with selected schools in Metro Manila and Calabarzon. We suggest that the government help institutionalize these linkages between work places and the universities down to the regional level as well.

For its part, the government—especially the Department of Education and the Commission on Higher Education—should take a hard look at the country’s educational system, especially in view of the rapidly globalizing world. Is the country’s educational system attuned to the demands of the brave new world?

We suspect the contrary because of the continuing weakness of most graduates in the sciences, mathematics and the English language. These kinds of disciplines require lots of lecture hours, laboratory work and focus to ensure mastery. But mastery our students couldn’t achieve because of the often crowded curricula.

Elementary and high school students, for instance, have more than a dozen subjects each day. Students, therefore, end up too pressured to cope with so many subjects, and often barely have the time or energy for those subjects that really matter in the real world. Added pressures are the tendency of school officials to use students as props and mass dancers during fiestas, visits of dignitaries, and athletic events. Ditto the practice of mobilizing teachers to perform election-related duties and responsibilities. Do we want a lean and mean school system? We start with a lean and mean school curriculum for elementary and high schools.

We need to do all these measures quick because globalization suggests that the world now is the market place for skilled Filipinos. Right now, skills in certain industries like aviation, nursing, caregiving, mining, aircraft mechanics are getting scarce because of strong global demand. Many employers in these sectors are now so desperate some have suggested a ban on the export of skilled labor from these industries. But we know that these measures are not going to work. The only surefire formula is producing enough workers both for the local and global job markets and the first step is the country’s school system.

If you have any doubt about this, check out the latest special report by the New York Times on why America, while cracking down on illegal immigration, is throwing wide open the doors to nurses from foreign countries, with development experts worrying about the impact of these on countries like the Philippines and India.

For the longest time many of us nurtured the well-worn notion that “whites like brown nurses because white young men and women don’t like to clean ass.” Well, it turns out that smart-alecky, not to mention insulting (to both races) generalization is debunked by the NYT finding that America is seriously in short supply of nurses because its leaders have for years ignored advice to support nursing schools and the teaching of nursing. Each year, the US’s nursing schools turn away hundreds of thousands of applicants, indicating that many youths over there are interested in the profession but there’s no conscious effort to provide the schools and teaching hospitals for them. Many end up taking courses in the Carribean or some such similar destination. On the other extreme, Filipinos are so eager to produce nurses for the world that our computer and engineering schools have reinvented themselves as nursing schools.

Either way, this mismatch of demand and supply between First World and Third World isn’t good for both in the long term. One (USA) can be so dependent on foreign workers that, who knows, the day will come the supply of workers will be treated much like a commodity, say, like the gas pipelines that Russia cut off to the Ukraine earlier this year in a bitter dispute over pricing and transit terms. Conversely, the labor-supplying countries can also be held hostage to threats of rejection of their workers if they can’t agree with host governments on certain terms.

From a globalist viewpoint, that’s a “function of the market.” But from the national interest of each country, it’s clear both the labor supplier and labor importer need to rationalize their internal job matching systems: and for either one, schools hold the key to good business.

Skills-jobs mismatch

WE have been talking about “jobless growth,” about how the economy has been growing decently at 5 percent or higher in the last few years and yet the country couldn’t seem to lick joblessness.

Each analyst has his or her explanation: high population growth, the concentration of new jobs in the services sector requiring stringent qualifications, the capital intensity of investments owing to a fiscal incentive regime that cheapens capital vis-à-vis labor, the economy’s inability to grow enough to produce more jobs, etcetera. All these explanations make sense and for decades, the practitioners of the dismal science (the economists) have been pontificating about them in their “empirical studies.” The recent job fairs in Davao, however, seem to indicate that the real reason might be job mismatch. The country’s college and universities are not producing graduates that the industries and institutions needed.

Consider this: In the April 28-May 1 jobs fair in Davao City, companies offered 10,000 jobs, yet the DOLE got only 5,000 applications. Out of 10,000 jobs offered, 7000 were overseas jobs and the rest local jobs. Yet only 1,800 applied for those jobs abroad. We thought all along the problem was lack of jobs!

The Davao job fair results very possibly mirror the national situation. From the 2006 to 2010, for instance, the Commission for Information and Communications Technology (CICT) projects that the country’s “cyberservices” industry—comprising call centers, medical and legal transcription, software development, engineering design, animation, and back-office operations—projects a labor supply shortfall of 273,000 unless the government and the private sector can do something drastic to address it soon. In a country perennially suffering from severe joblessness, this labor supply shortfall is almost criminal.

It’s so easy to blame the parents or the schools for this problem. It’s so easy to figure out how parents are not providing enough guidance to their children as to what sort of career would ensure a better life for them. It would be so convenient to blame schools, nay diploma mills, for mass-producing poorly trained hordes of quasi-educated graduates like the Model T Ford. After all there are too many of these schools around, offering accountancy degrees for graduates that couldn’t pass the board exams, engineering graduates who don’t know engineering, and lawyers who can’t write decent pleadings. Certainly, these schools should shape up and fast. We think, however, that this issue is just one side of the coin.

The other side lies in the failure of the government, specifically the Department of Labor and Employment, to provide adequate job market information by which parents and their children make career decisions. Certainly, greed among diploma mills and the overpriced schools are a scourge but if school administrators have adequate labor market information to guide their course offering and school curricula, the problem of job mismatch would be solved. Besides, students who are well aware of the job market are going to enroll in courses that would land them the hot jobs that they desire, thereby forcing the schools to offer the right mix of disciplines. In sum, the interaction of supply and demand for labor is not functioning well in the country for lack of job market information.

And whose job is it to provide this information? The mass media comprising print, broadcast and online, should help and indeed it’s playing this function well through the regular classifieds sections. In the Philippine context, however, the reach of mass media is still limited, especially for print and online media. Broadcast may have the potential to reach a wider audience but these institutions whose revenues are determined by advertising hours are not likely to offer systematic and processed information about the job market. Only the government, therefore, given its powers and resources, should be able to provide this information and yet it’s not doing it systematically. But how could the government perform this function?

There are many ways, besides the usual job fairs, skills development, training, and upgrading of the educational system. In the United States, for instance, the Department of Labor provides an “Occupational Outlook Handbook” that provides details of jobs available in the US and their prospects. Specifically, the handbook describes the nature of work; working conditions; training, other qualifications, and advancement, job outlook, earnings, related occupations, and sources of additional information. This handbook is widely available to all Americans, and is regularly updated such that Americans can derive inputs in making career decisions as times and trends change. Certainly, the Philippines, which sets great store on its people as a major economic resource making up for lean capital, should have something like this. The better the DOLE considers doing this, the better.