Metro Manila labor turnover stabilizes in Q3

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A worker operates a machinery at a Toyota manufacturing plant in Laguna. Photo taken on July 8, 2013. -- BW FILE PHOTO

By Christine J. S. Castañeda, Senior Researcher
and  Mark T. Amoguis, Researcher

LABOR TURNOVER in large Metro Manila enterprises declined to its slowest pace since early 2016, the Philippine Statistics Authority (PSA) said.

According to a PSA quarterly survey, labor turnover in the National Capital Region (NCR) decelerated to 1.1% year on year in the third quarter of 2017, from 3.67% a year earlier and 2.1% in the second quarter of 2017.

The reading was the lowest since the 0.96% turnover rate in the first quarter of 2016.

Turnover rate is the difference between those hired (accession rate) and those who left or were terminated (separation rate). In the third quarter, the accession rate in large Metro Manila firms was 8.91%, down from 14.1% a year earlier, while the separation rate was 7.81%, down from 10.43% a year earlier.

For every 1,000 employed, a net 11 were added to Metro Manila’s work force with 89 new hires against 78 either laid off or resigned.

Ruben Carlo O. Asuncion, chief economist at the Union Bank of the Philippines, said the indicator is a “good sign.”

“It means that reduced departures in [the third quarter] of 2017. It could be a general sentiment of job satisfaction and a feeling of stability with one’s current employment. This is generally a positive picture of the labor force,” he said.

Security Bank Corp. economist Angelo B. Taningco attributed the slowdown in labor turnover to a sharp decline in the services sector “that was partly offset by an increase in the industrial sector.”

Industry contributed the most to job generation with a labor turnover rate of 1.38%, as the accession rate of 8.35% outstripped the 6.97% separation rate. Top performers in this sector were mining and quarrying (2.34%) and manufacturing (2.22%).

Meanwhile, Metro Manila’s accession rate was driven up by the expansion in services of 9.07%. However, it also had a high separation rate of 8.02%, bringing the sector’s labor turnover rate to 1.05%. Much of the employment growth in this sector was seen in financial and insurance activities (3.08%); information and communication (2.73%); transportation and storage (2.53%); and real estate activities (2.25%).

On the other hand, the agriculture sector work force fell with the separation rate (4.12%) exceeding the accession rate (3.42%).

“This negative figure [in the agriculture sector] implies the difficulty of job mobility in this particular sector. It is known that sometimes jobs in agriculture are part-time and seasonal, and agriculture workers sometimes are left with no choice but to remain in the sector due to lack of other opportunities and lack of necessary access to training for higher level of labor,” UnionBank’s Mr. Asuncion said.

Mr. Asuncion added: “With eight quarters of above 6% economic growth, I expect that labor opportunities will increase and the quality of these opportunities to increase as well. Thus, labor turnover may remain at a minimum moving forward.”

Security Bank’s Mr. Taningco concurred: “I think labor turnover in the NCR may have rebounded in the fourth quarter, and I expect this to accelerate in the succeeding quarters especially with more business investment and public infrastructure spending expected to intensify this year.”

Separately, the 2016 Occupational Wages Survey showed a P12,013 median for monthly basic pay in 2016, up 2.2% compared with 2014 for time-rated, full-time workers.

The survey, conducted every two years, covers both agricultural and non-agricultural establishments employing at least 20 workers. The coverage is wages of time-rated workers, or those being paid on the basis of a time unit of work such as an hour, a day or a month.

Among major occupation groups, 10 out of 18 saw their median basic pay exceed the national average. Workers in information and communications received the highest median basic pay of P21,399 in 2016, down 3.9% from two years earlier.

The electricity, gas, steam and air-conditioning supply occupations came in second with a median basic pay of P20,400, up 13.6%; followed by professional, scientific and technical activities; financial and insurance activities; real estate activities; education except public education; water supply, sewerage, waste management and remediation activities; administrative and support service activities; and transportation and storage.

On the other hand, agriculture, forestry and fishing recorded the lowest median basic pay at P7,927, down 6.2% from two years earlier.

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