Opportunities for RP seen in global work force changes

THE PHILIPPINES is poised to gain from the diminishing work force abroad but top managers will have to adopt key strategies to retain local talent in the meantime, an expert yesterday said.

Tailored incentives to keep young employees and also defer the early retirement of more senior workers are needed alongside stronger links between leaders and team members, Towers Watson regional managing director Bob Charles said at the Management Association of the Philippines (MAP) International CEO Conference.

These were similarly cited by other speakers to address global shifts such as China’s growing economic clout and the increasing complexity of the world economy.

“There is a changing face of demographics around the world. This will have profound implications on business,” Mr. Charles said, adding: “The Philippines will have a big advantage over parts of the world with older populations.”

He pointed to decreasing birth rates around the world and noted that here, there are still more births than the global average.

“By 2020, we will see the total population in OECD (Organization for Economic Cooperation and Development) countries to flatten out and possibly start to decline. It’s thus not possible for the lion’s share of economic activities to still take place [in those parts of the world],” Mr. Charles said.

As such, investments to outsource operations to Asian countries with young and large workforces will be an increasing trend.

But brain drain could be a short-term risk as valuable labor will be enticed to migrate to developed countries where the center of global activity will remain for the meantime, Mr. Charles said.

To address this, business leaders would do well to ensure their young talent remains engaged in their respective companies, he added.

“The primary drivers of engagement for ‘Generation Y’ is career advancement, genuine concern that the company is making a difference, and opportunity to give input,” he said.

And — in the longer term — as increased offshoring into the Philippines may put a strain on the labor supply, companies would also do well to retain their more senior employees as well.

“Are you really sure you’re not losing talent unnecessarily, pensioning off talent too early?” Mr. Charles said.

This segment could be enticed to stay by offering them the option to shift to part-time work, avail of extended sabbaticals and ease some responsibilities to apprentices, he said.

Retention strategies should also include “relationship building and communication” which is “ultimately critical,” he added.

So far, many Philippine companies are already adopting these prescriptions, local experts said.

“A lot of firms are already conducting succession management. They’re beginning to realize the shift to an aging population,” MAP President Eusebio V. Tan said on the sidelines of the conference.

Towers Watson Philippines managing director James G. Matti noted that many companies, specially in the business process outsourcing sector, have been preparing by working with government and the academe to increase the ranks of skilled labor.

“We’re also noticing that the challenge for retention is at the team level. The team leader [can influence attrition rates],” Mr. Matti added.

Other MAP conference speakers similarly emphasized the significance of leadership to address other changes firms have to deal with, such as China’s growth and increasing volatility caused by globalization.

“Creative leadership” will be needed to stay ahead as well as quick decision making and simplified operations, Grace Chopard, vice-president at IBM Growth Markets said in her speech.

Heads of local firms Shopwise and Seaoil likewise attested that a strong relationship between leaders and their team members were key to their success.