College grads can’t find work, jobs can’t be filled–what gives?

SCENE from an Inquirer job fair INQUIRER PHOTO

Where are the jobs? That’s the question college graduates are asking. Where are the qualified applicants? That’s the question industries with vacancies to fill are asking.

Students and parents who think that a degree diploma is all that is needed to be hired for work are in for a rude awakening. Of the 2.94 million Filipinos who are unemployed, 34 percent are college graduates or college trained, according to statistics from the Asian Development Bank (as of April 2014).

These job seekers do not have the skills required by the industries that are hiring. The business process outsourcing (BPO) sector alone, which has been showing an annual growth of up to 46 percent since 2006, generates almost a million jobs. It is expected to hire 1.3 million employees by 2016 to be able to realize its projected revenue of $16 billion, according to the Business Processing Association of the Philippines. Only 5 to 10 percent of job applicants are hired, however.

BPO executives have been complaining of the slim pickings. And yet this lackluster labor market is littered with degree holders.

The graduates of our top universities are overqualified, but they are taking BPO jobs anyway. The graduates of diploma mills, which is the only way to describe a good number of our tertiary schools (you know who you are) are not qualified, period. One BPO company, frustrated that their applicants were not good enough, reportedly ran a free three-month boot camp where college graduates, college dropouts and even high school graduates could acquire the skills needed for the job.

This mismatch between education and employment, according to the Philippine Business for Education (PBEd), is a global problem.

“That’s the good news,” said PBEd president Chito Salazar at an exclusive lunch with journalists. “The bad thing is we don’t seem to have a coherent, overarching framework on how to deal with this problem. It is being dealt with in bits and pieces.”

Being that it owes its existence to the business community, PBEd is understandably concerned about correcting the skills gap. And so, across its vast swathe of

responsibility—reforming teacher quality, basic education and higher education—it is now actively pushing for workforce development as a solution to our high and persistent youth unemployment problem.

The Philippines will be entering its “demographic window” in 2020. For the country to be able to enjoy that sweet spot, which the United Nations characterizes as “a period of high economic growth brought about by a bigger number of people entering the productive ages of 15 to 64,” PBEd believes we first have to solve the unemployment problem, which is consistently the highest in the Association of Southeast Asian Nations (Asean), with the exemption of 2009 when it was Indonesia’s.

Salazar defined workforce development as “getting the right people into the right jobs or the right professions.”

Workforce development is not possible without collaboration among government, industry sector councils and the schools sector, Salazar said. Government’s responsibility is workforce planning, industry’s is human resources management, and education’s is skills development.

In the PBEd framework, the government has to supply labor market intelligence (LMI); the companies should take care of job marketing and provide the technology; and the schools should tackle curriculum development, training, paths in and out of the system, and assessment.

What is LMI? It is a resource in government where people can see a list of the jobs they might be interested to do, how much the jobs pay, what type of schools they should go to for such skills, where the opportunities are in the country, among other things. “It should be that specific,” Salazar said.

Once the government has that kind of labor data, it can facilitate the linkage between education and employment.

Meantime, industries should also get organized and identify the skills they need more clearly, he added, before the education sector could enter the picture. A university or a tech-voc institute cannot be expected to come up with a training curriculum based on the skills only one company needs. Better to approach the schools for the skills that an entire industry sector needs.

He gave as an example the auto industry in California. The top car manufacturers, dealers and distributors sat down together and identified the key skills they were looking for in a graduate of an automotive engineering or technical-mechanical course. They then said to the schools: “These are the competencies we need developed in your students so we can hire them.” None of the skills was specific to a brand or a company. It was a generic list—key competencies that would work for all brands to which schools could be oriented.

He also cited the local banking industry as an example. The banks are supposed to be very organized here, but when PBEd asked them for a list of the entry level jobs in banking, the competencies needed for each entry level job and the degrees appropriate for those types of jobs, they were unable to do it.

“What we told our CEOs is to start defining the competencies,” Salazar said. “Or define the recommended pathways to acquire those competencies. Forget the degrees.”

In the PBEd workforce development framework, the LMI from government will identify the skill sets needed in the short term and the long term by industries. These will be translated into competencies that the schools will incorporate into their curricula.

“This seems to be too ambitious because right now our education system is built from Grade 1 upward,” Salazar said. “But at one point in time, as students move into high school, the curriculum should be designed from the end backwards. The question we have to ask the kids is, what do you want to be? Then we give them the competencies they will need to be what they want to be.”

(Part 2: How to improve education and employment outcomes.)