Olongapo City Skills Training Center

Friday, March 21, 2008

Lack of skilled workforce

Top problem for second year

Lack of skilled workforce slows business expansion. A large Korean investor and many Middle East contractors also expressed concern about the lack of qualified welders and other skilled technicians

By Katrina Mennen A. Valdez, Reporter

BUSINESSMEN consider the lack of a skilled workforce as the biggest constraint to expansion, according to the annual International Business Report issued by Grant Thornton International Ltd.

For two consecutive years, the unavailability of a skilled workforce emerged as the most important constraint to business expansion among Filipinos. Similarly, skills lack emerged as the number one problem of privately held business around the world, displacing inhospitable regulations and red tape.

The report, which was released by Punongbayan & Araullo (P&A), is an annual survey of the attitudes and expectations of medium-sized businesses. This year, the report surveyed 7,800 respondents from 34 participating countries.

Of the Filipino business leaders polled, 58 percent said the growth of their enterprise is worst affected by the unavailability of a skilled workforce, up from last year’s 43 percent. Globally, the proportion of respondents who cited this constraint increased from 34 percent last year to 37 percent this year.

In terms of lack of a skilled workforce, the Philippines shared the third spot with Australia, while Thailand and New Zealand were the top two countries wherein this was also a problem.

“[We] are in a dire situation since [we] now belong to the top three countries whose business growth is limited mostly by this human resource problem,” Greg Navarro, P&A managing partner said.

Late last year, networking company Cisco reported that the Philippines was short of 1,300 information technology professionals, with this shortage expected to rise to 2,400 by next year.

A large Korean investor and many Middle East contractors also expressed concern about the lack of qualified welders and other skilled technicians, the report said.

“The business community has been experiencing the gradual and continuous deterioration of the quality of graduates in the past decade or so, and has organized itself to help the education sector improve the standard in the country,” Navarro said.

Besides the unavailability of a skilled workforce, the report also showed a notable increase in the percentage of Filipino respondents concerned about the reduced demand for their products or services. From 17 percent of respondents last year, this figure jumped to 46 percent this year.

This was followed by red tape, which had been on a downward track for the past four years. Last year, 26 percent of Filipino business leaders said it was a major roadblock to growth, down from 34 percent in 2006. This year, 49 percent consider it a major constraint.

“Besides being a major constraint to business, red tape also influences the flow of foreign investments into the country. So [we] have to take a serious look at how [we] can reduce bureaucracy and cut the costs of doing business in the Philippines if we want to catch up with [our] Asian neighbors,” Navarro said. Manila Times

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