By Jochebed B. Gonzales
Senior Researcher
NET WORK FORCE turnover at large firms rose to 1.7% in the second quarter from 1.6% a quarter earlier due to hiring activity in the industry and services sectors, the Philippine Statistics Authority (PSA) said.
According to the PSA’s Labor Turnover Survey for the three months to June period, labor turnover rate — or the difference between accession and separation rates within firms — accelerated between quarters.
The indicator means that for every 1,000 persons employed, large firms hired an additional 17 workers on a net basis during the second quarter.
The accession rate, or the rate of hiring by employers to either replace former employees or expand their work force, increased to 11% from 9.3% in the preceding quarter.
The rate of separation — which covers terminations and resignations — was 9.3%, rising from 7.7% previously.
The net labor turnover rate was highest in the industry segment, at 3.9%, following an accession rate of 13.3% and a separation rate of 9.4%.
Net hiring was also seen in services, where the net work force turnover rate was 1.1%. This sector posted accession and separation rates of 10.5% and 9.4%, respectively.
Asked for comment, Ruben Carlo O. Asuncion, chief economist at Union Bank of the Philippines (UnionBank), attributed the positive turnover in industry and services to their “robust and solid” expansion in the second quarter as a result of increased expenditures from the private and public sectors.
“Overall, each of the said sectors is continuously expanding due to increasing government spending and rising private investment,” he said.
“The continued interest in the Philippine economy by foreign and local investors has fueled labor demand for both the industry and services sectors.”
Rizal Commercial Banking Corp. (RCBC) economist Michael L. Ricafort, concurred: “The positive labor turnover in industry and services sectors may be attributed to the continued pick up in manufacturing and export activities and also amid the continued growth in real estate and construction, partly due to the sharp increase in government spending on infrastructure since the start of 2018.”
However, more people left their jobs in agriculture, forestry and fishing which posted a negative turnover rate of 1.3% after recording a separation rate of 6.4%, compared to its 5.1% accession rate.
RCBC’s Mr. Ricafort pointed to higher wages offered particularly in the construction sector.
“The negative labor turnover in the agriculture sector of some agriculture jobs over the years to industry and services may partly reflect higher pay in construction jobs amid some tightness in construction jobs especially over the past 2-3 years, the conversion of some agricultural areas/farmlands to industrial areas, residential, and commercial areas (that also reduced employment in adversely affected agricultural areas),” Mr. Ricafort said.
UnionBank’s Mr. Asuncion added: “Neglect and the lack of political will to deal with market inefficiencies, I think, have rendered the (agriculture) sector helpless and languishing in weakness amidst meager expansion and the threat of climate change.”
Data from the survey also showed 219,022 job vacancies in the three months to June, 2.2% lower than the first quarter level.
These vacancies were highest in the services sector with a 76.1% share equivalent to 166,713 openings. The share of the industry sector stood at 19.9% (43,536) while that of agriculture, forestry and fishing was 4% (8,773).
In terms of major occupation group, employers mostly looked to fill in positions for service and sales workers (accounting for 18.4% of job vacancies), technicians and associate professionals (16.3%), elementary occupations (16%), professionals (15.9%) and clerical support workers (15.7%).
Meanwhile, out of the 9.3% separation rate, 5.6% were employee-initiated while 3.7% were employer-initiated. Being “hired by another company” was the top reason for employee-initiated separations, as cited by 32.6% of the respondents who left their employers on their own initiative.
Some 18.3% left due to “family considerations,” 14.4% said they would work overseas while 10.7% went absent without official leave (AWOL).
On the other hand, project completion accounted for 44.8% of employer-initiated separations. It was followed by those who went AWOL, at 20.5%, while those who were separated from the company because of retirement, reorganization/downsizing and termination comprised 8.0%, 4.7% and 3.6%, respectively.
Moving forward, the economists are optimistic that hiring will be sustained in the next quarters.
“I still see positive numbers from the industry and services sectors, while agriculture will remain the growth laggard,” UnionBank’s Mr. Asuncion said.
RCBC’s Mr. Ricafort said, “Philippine hiring/employment growth could still improve amid continued growth in both local and foreign investments, as a major economic growth driver in recent years, especially new record high foreign direct investments (FDIs), with the shift of more FDIs from China to other ASEAN countries such as the Philippines amid the trade war (i.e. higher tariffs) between the US and China.”
“The pick up in manufacturing, including exports (as some investments/FDIs are completed/become operational), would also help create more job opportunities.”
