By Carmina Angelica V. Olano
THE PHILIPPINES’ ability to develop, attract and retain highly skilled professionals improved in 2019, buoyed largely by increased capacity in matching existing talent pool with the demand of the labor market, according to an annual survey of Switzerland-based business school International Institute for Management Development’s (IMD) research arm.
The Philippines placed 49th out of 63 economies in the IMD World Competitiveness Center’s World Talent Ranking 2019 report published on Monday, up six places from 55th in 2018.
The 2019 report takes into account three equally weighted talent factors to determine placement of these economies. The “investment and development” factor measures how much resources were invested to cultivate “home-grown” talent, the “appeal” factor evaluates the extent to which an economy “attracts and retains” foreign and local talent, while the “readiness” factor looks at the “availability of skills and competencies” in the labor force.
The Philippines saw the largest improvement in the readiness factor, rising to 26th in 2019 from 37th in 2018. Its placement in the appeal factor rose to 31st from last year’s 38th place. At the same time, the Philippines saw marginal improvement in the investment and development factor, albeit remaining near the bottom at 61st from 62nd previously.
The report cited the Philippines’ overall strengths such as availability of skilled labor (ranked third overall), percentage of graduates in the sciences (13th), availability of language skills (16th), cost-of-living index (15th) and effective personal income tax rate (8th).
“Other contributors to the country’s improvement include the prioritization of employee training (27th), level of the motivation of the workforce (29th) and availability of competent senior managers (21st),” the report further read.
On the other hand, the Philippines’ overall weaknesses include its government expenditure on education per student in the secondary level (56th), total public expenditure on education per student on all levels (61st), student-teacher ratio in the primary (59th) and secondary (57th) levels and the inbound mobility rate (56th), which is measured as the foreign tertiary-level students per 1,000 inhabitants.
Responding to queries via e-mail, IMD World Competitiveness Center Director Arturo Bris said the Philippines has “shown an amazing improvement” in terms of its capability to “match the existing talent pool with the needs of the private sector.”
“In particular, attraction and retention of talent has become a more important priority for companies, and in fact this has been achieved through a reduction in the cost of living index, as well as an increase in the average remuneration of management,” Mr. Bris said.
“Consequently, our indicator of ‘readiness,’ which measures the ability of the system to match the existing talent pool with the needs of the private sector, has also improved significantly. This is reflected in our indicator of whether ‘Skilled labor is readily available’ in the country, where the Philippines jumps from No. 7 to No. 3 in the world.”
Despite this, Mr. Bris also noted that the Philippines “continues to show an underperforming education system” as its investment in education is “still well below average.”
“As a percent of GDP (gross domestic product), the Philippines only invests 3.5%, lower than the average 4.1% for all the countries in our sample“ [O]n a per-student basis, the Philippines ranks No. 61 out of 63 countries [at $376 per student],” Mr. Bris said.
Asked on what the Philippines should do to maximize its strengths to further improve its ranking, Mr. Bris responded: “It is paramount for the country to stop the flow of talent abroad. Therefore retention of talent should be a priority of policy.”
“Besides general economic improvements that induce talent to stay at home, the country should implement other policies that increase quality of life, access to services, higher salaries and better labor conditions,” he added.