THE Aboitiz group is preparing 11 fifth-generation family members as its next set of leaders within the next two years when a number of senior officials retire, people handling the conglomerate’s leadership training said.

On Jan. 19, companies under holding firm Aboitiz Equity Ventures (AEV) are to send their top officials to what will become an annual leaders conference, which is one of many initiatives geared at preparing young family members for their future roles.

“We wanted to bring together all the 180 leaders across the Aboitiz group to start to think of leadership as a collective effort,” said Mia B. Zamora, AEV assistant vice-president for talent optimization.

“We want to promote that awareness of collective leadership and we also want it to be a learning experience for them, that’s why we brought in Bob Anderson,” she said, referring to Robert L. Anderson, chairman and chief development officer of The Leadership Circle.

Mr. Anderson said leadership training for corporate leaders needs “a more comprehensive approach,” which he said involves a process of transformation that requires them to make a “profound shift to gain a deeper understanding of themselves, the world, and their relationship to others.”

Participants in the conference are the top officials of Aboitiz-led companies, from chief executives and presidents down to vice-presidents.

The Aboitiz group is probably the “most ready organization I’ve encountered here and coming at it in a way which is much more like what you’d see in a first world country,” said Cliff Scott, director of The Leadership Circle, a consultancy.

Ms. Zamora said the fifth generation Aboitiz family members fall within an age range of 25 to around 43 years old. They have completed their college studies, worked previously in non-Aboitiz companies, or joined the conglomerate as management trainees.

“There is one who is joining us very soon, like in a few days. He will be the youngest. His name is Julian Aboitiz. Usually, they start out with us as management trainees, so we don’t know yet where he will be assigned,” she said.

Management training with the human resources department gives the newcomer a chance to be assigned to various projects and departments. His eventual role depends on discussions with the organization’s leaders, which will also cover his educational background and “the best fit” for him.

“They will give them [trainees] six months to a year to rotate,” she said. “Their preference is considered but it’s really a collaborative decision… They can’t pick any job.

Previously the youngest of the group was Jaime Moraza, 27, who works as market risk manager for SN Aboitiz Power, the joint venture of SN Power of Norway and Aboitiz Power Corp.

The eldest at 44 years old is Cebu-based Anton Perdices, chief operating officer of Visayan Electric Co.

Ms. Zamora listed the rest as Carlos Aboitiz in power generation, Rafa de Mesa and Eduardo Aboitiz in real estate, Danel Aboitiz in the oil business, Ana Aboitiz-Delgado in banking, William Paradies and Jokin Aboitiz in the food group, and Sandro and Tristan Aboitiz in corporate finance.

Jaime is the son of Antonio R. Moraza, president and chief operating officer of AboitizPower. A child of Erramon I. Aboitiz, AEV president and chief executive officer, has yet to enter the business.

“Usually what happens is they finish college. They work first in different companies [outside the Aboitiz group], sometimes abroad, they join the company and some years later they can go to graduate school. They have those options,” Ms. Zamora said.

Asked about the next vacant position to be filled by a fifth generation Aboitiz, she said there was “no definite move yet, but we’re experiencing — like many other companies in the Philippines — what we call an executive retirement stage where a large number of them are all retiring at the same time.”

Ms. Zamora said several executives are nearing 60 years old in the next two years “so there’s a greater demand to develop from within our talent.”

“It doesn’t matter where in the group we get them as long as we are able to accelerate leadership, that’s why we’re investing in these efforts in leadership development,” she said.

She said the organization “is very objective” when it assesses the chances of a non-Aboitiz to move up the ladder, adding that family ties are not a factor.

“Of course, they do have development plans for the fifth [generation] but when choosing a successor for a role, it’s all fair, it’s all objective,” she said.

The highest position currently filled by a non-Aboitiz is chief financial officer for AEV, held by Manuel R. Lozano, and executive vice-president and chief operation officer of AboitizPower’s power generation group, held by Emmanuel V. Rubio. — Victor V. Saulon

HIGHER across-the-board wages run the risk of limiting the employment prospects of less experienced workers and women, according to a paper published by the Philippine Institute for Development Studies (PIDS).

In “The Impact of Legal Minimum Wages on Employment, Income and Poverty Incidence” by researchers Vicente B. Paqueo, Aniceto C. Orbeta, Jr. and Leonardo A. Lanzona, it was found that increases to the legal minimum wage adversely affect the very groups the government is trying to help.

According to the authors, a higher legal minimum wage is likely to reduce the work hours of the average worker, can be disadvantageous against the very groups that [the wage is] intended to protect, decrease the employment probability of the young, inexperienced, less educated and women laborers and tends to ironically reduce average income and raise household poverty rate.

In the Philippines, the number of work hours fell and an 8-22% decline in the probability of gaining or retaining employment was seen following an increase in the legal minimum wage.

“Hours of work significantly declined, and the probability of gaining/retaining employment fell by about 8% to 22%, following an increase in the legal minimum wage, “PIDS said.

Meanwhile, disadvantaged groups particularly the young, the inexperienced, the less educated and women showed lower productivity compared to their older, more educated, experienced and male counterparts for jobs.

“Using the fixed effects model alone, an increase in the legal minimum wage of 10% would lead to declines in labor participation rate (negative elasticities) by -6.36% (for all workers), by -5.97% and -3.64% (among teenagers and young adults relative to 50 years old and over), and by -2.36% (no schooling relative to college educated)” said PIDS.

“Further along, larger increases in the legal minimum wage tend to reduce average household income and raise the prevalence rate of poverty.”

“The total income of a household with just one minimum-wage earner is likely to be smaller than a household where the wife, and perhaps the older children too, can also work but at lower, market-determined wages,” said PIDS.

It was also found that quicker hikes in the legal minimum wage increase poverty incidence by 1.7 to 3.0 percentage points. PIDS said government policies to increase the minimum wage cause firms to lay off some of its workers because continuing to employ them would cost the firms more than the revenue they are expected to bring in and thereby have a negative consequence on employment.

Currently the average daily minimum wage ranges from P235-P491, according to the Current Labor Statistics January 2017 Issue of the Philippine Statistics Authority (PSA).

Moreover, the authors noted the adverse effects of increases in LMWs on employment by firms with average assets below P1.1 billion to be higher compared with larger corporations with an asset size above P1.1 billion.

PIDS called for a policy review to temper both demands for larger increases in the legal minimum wage and its effects by decentralizing the setting of minimum wages to regional authorities to take into account differences in regional conditions.

Furthermore, the government should also address the discriminatory impact of the legal minimum wage on the poor, the young and inexperienced, the less educated and the women by developing and testing compensatory interventions that would reduce, if not completely reverse, the discriminatory effects… to promote greater inclusiveness.

Equally important is the need to study empirically the impact of tightening the design and implementation of the current six-month regularization law and labor contractualization as the government still lacks data to review the impact of the legal minimum wage on employment opportunities and the disadvantaged. — Danica M. Uy “The Impact of Legal Minimum Wages on Employment, Income and Poverty Incidence, ” it was found that increases to the legal minimum wage adversely affect the very groups the government is trying to help. — BW File Photo