Is the Philippines winning in the ‘war for talents’?

By Rene E. Ofrene, Businessmirror, Jun 28, 2017

The “war for talents” refers to the fiercely competitive environment in the recruitment and retention of talented and highly-skilled employees.

The term entered the vocabulary of human resource managers at the turn of the millennium. It was ignited by the rise of ICT and knowledge-intensive industries. In America and Europe, the war was deepened by the changing demographics — the declining supply of skilled workers to replace the retiring baby boomers. The ICT success of Silicon Valley in California was partly due to the influx of highly-educated and talented migrants from India, Taiwan and other countries.

The war for talents is not really new. Well-capitalized companies which enter existing industries usually start doing business by pirating the tested talents and skills from other competitor companies. It takes time and lots of training investment to nurture talented new graduates from the university. This situation has given rise to the executive search business of the head-hunting companies such as John Clements, Manpower of Milwaukee, Monster, Inc., and so on.

In the Philippines, the piracy or poaching of skilled managers, supervisors and skilled workers was common in the electronics industry during the boom years of the 1990s. When the garments industry collapsed in the 2000s, the footloose garments investors who transferred manufacturing business to Bangladesh, Cambodia, Sri Lanka and other cheaper production sites brought with them their Filipino supervisors and line leaders. Today, employee poaching is a major headache for HR managers in the call center-business process outsourcing industry despite so many past efforts of the industry players to institute an anti-poaching Code of Conduct.

However, the war for talents is a global one. The Philippines happens to be one of the largest exporters of skills and talents. Filipino middle-level managers, professionals and skilled workers are everywhere in the war-torn Middle East. Schools at home are complaining that they have been losing their English teachers to the non-English-speaking countries of the Asean. For a while, in the mid-2000s, registered nurses were on top of the American “hot job” list; this prompted a number of Filipino doctors to switch to nursing profession.

With the Asean countries further liberalizing trade in services and visa requirements for the highly educated, the exodus of Filipino professionals, talents and other skilled workers is likely to continue and grow despite the failure of the Asean Mutual Recognition Arrangement (MRA) program on professional equivalency to take off (see previous column).

Is the Philippines then a winner in the war for talents in the Asean and across the globe?

For the individual talents who are able to land well-paying and secure jobs overseas, the answer is yes. But the bigger question is: what happens to the industry and the country that nurtured their talents?

The truth is that the Philippines has been suffering from a brain and brawn drain since the 1970s, when the program of “manpower export” was launched by the martial-law government in response to the demand for workers by the petro-dollar states of the Middle East. A number of manufacturing industries then loudly complained about the drain, citing the problem of maintaining business when companies lose expert electricians, plumbers and construction workers. In the 1980s, the industry complaint on the exodus was somehow stilled by the decade-long economic crisis at home.

Then lately, a bigger problem has cropped up: the loss by industry of “mission-critical personnel”. These are the most talented workers occupying sensitive or strategic positions whose absence can paralyze the operations of the entire business or factory, for example, manufacturing will grind to a halt if there are no production engineers. Some of the most affected industries by the migration of mission-critical personnel are aviation, power, mining, steel, telecoms and manufacturing.

The exodus decades of the 1970s to the present happen to be the decades too of industrial stagnation. Hence, an argument can be raised that the brain drain contributed to the failure of Philippine industry to move up the ladder from the 1980s onward. On the other hand, it can also be argued that the failure of industry to take off is precisely the reason for the exodus of the skilled workers.

So what is the right policy approach to the exodus? Can one really prevent the war for talents and the ensuing piracy of talents by the head hunters?

If the war is confined within the national borders like in the case of the call center-BPO sector, the government probably can maintain its usual let-the-market-take-care attitude. The competition to get the better and more experienced workers even helps increase wages and improve working conditions in the call center-BPO sector across the board.

But if the outflow of talents goes cross-border and the number is huge, the exodus will obviously impact on the ambition of the government to revive Philippine manufacturing and modernize agriculture. There is, therefore, a clear need for the government, industry, education sector and the associations of professionals to sit down and draw up a program on how to develop a balanced approach to the migration of talents. The preoccupation of the Professional Regulatory Commission and the education bodies to meet the various MRA requirements of the Asean, alongside with the so-called Asean Qualifications Referencing Framework, should give way to the bigger challenge of how to craft a talent development program in support of accelerated industrial development and agricultural modernization at home.

In this regard, the case of Singapore is worth citing here. At least 40 percent of the workforce of Singapore are migrants. Most of these migrants are subject to strict visa requirements and reportorial monitoring. However, Singapore has a relatively lenient policy, if not an open one, when it comes to the entry of high-skill workers, even for those who come to Singapore as tourists and yet apply for jobs upon arrival.

Also, as early as the 1980s, Singapore had adopted a policy of recruiting the best and the brightest outside Singapore in order to sustain its program of continuous upward development. In the early 2000s, it also launched a program to recruit leading scientists from around the world to take up positions in research institutions and/or serve as university professors. The whole idea is to enhance Singapore’s capacity for innovation and transform Singapore as the region’s center for research and development.

In contrast to the low-skill workers who are given ordinary but strict “Work Permits”, highly-skilled workers are given “personalized employment permits” (EPs). The EPs are given a variety of benefits such as monthly income of at least S$3,000.00, housing privilege and permit to bring in their families. Singapore also set up “Contact Singapore”, jointly managed by the Ministry of Manpower and Economic Development Board, for the purpose of attracting the best talents outside the country. Contact Singapore advertises vacancies in Singapore firms and the benefits that await qualified talents outside Singapore.

Clearly, for Singapore and other countries with similar skills-oriented migration policy, e.g., Australia and Canada, the issue is how to get the best and the brightest in order to enhance further their own development. Posting the “hot jobs” list for those seeking jobs overseas is the least of their priority. Their must-do task is to find out what are the talents needed to spur higher growth at home and how to secure those talents wherever in the world they are.