Expansion plans of most local privately held businesses are held back by the shortage of skilled workers, according to an international business report.
A survey conducted for the 2009 Grant Thornton International Business Report shows that 63 percent of Filipino business leaders polled cited the scarcity of skilled workers as the topmost constraint to expansion here, up from 58 percent of respondents who deemed so last year.
“Companies still continue to complain about lack of skilled manpower,” said Greg Navarro, Punongbayan & Araullo chief executive officer and managing partner. “This is true particularly in the business process outsourcing industry, where the hiring rate is still around 4 percent to 6 percent of applicants, and in the construction industry, which is always in demand for highly skilled welders and electro-mechanical workers. This mismatch of demand and supply needs to be addressed by a serious collaboration between industry [demand], schools [supply] and the government [policy maker and regulator].”
Punongbayan & Araullo, an accounting, tax and business advisory firm and a member-company within Grant Thornton International, released the local results of this year’s International Business Report.
Cost of money
Next to the dearth of skilled workers, cost of finance is another hindrance to expansion these days, according to 61 percent of local business leaders surveyed, compared with 45 percent in the previous year.
Meanwhile, 60 percent of Filipino respondents said their companies’ expansions are being hampered by the shortage of orders or reduced demand, up from 40 percent in the 2008 report.
On a global scale, the 2009 report noted that 49 percent of all private businesses polled worldwide cited the reduced demand as the foremost constraint on expansion, compared with 31 percent in 2008. Also, 25 of the 36 economies covered by this report have put shortage of orders as the leading roadblock to business expansion. This in first time in six years that such constraint led the concerns of business leaders worldwide, Punongbayan & Araullo said.
For instance, accounting firm cited that giant chip manufacturer Intel Corp. shut down its facility in the Philippines reportedly because of the steep declines in orders.
“PHBs [privately held businesses] in various markets have been affected differently by the economic downturn, but clearly, no one is immune from this slowdown,” Navarro said. “PHBs face a big challenge in staying competitive during these uncertain times. Business leaders have to be proactive by paying close attention to their operations, looking at where they can plug leaks or make savings. They have to study the specific issues affecting their business and develop strategies that will allow them to respond quickly to transformative changes in the market place.” –Ben Arnold O. De Vera, Reporter, Manila Times