A law to fix job-skills mismatch

The government and the private sector are taking another stab at addressing the worsening job-skills mismatch in the labor sector, a problem that has contributed to the high unemployment and underemployment in the country.

The Department of Education and the Private Sector Advisory Council (PSAC) signed last week a memorandum of agreement to pilot an enhanced work immersion program to increase the chances of senior high school students to find jobs when they graduate. Formed in July 2022 by President Marcos, PSAC is made up of the country’s top business leaders who will advise the government on issues in key economic sectors.

The council put up the Private Sector Jobs and Skills Corp. as a nonprofit, nonstock firm as its legal entity “to organize a well-coordinated government-industry-academe national movement to solve the jobs and skills mismatch problem in the country.”

The latest agreement will include curriculum alignment to give more hours for students to learn skills that are in line with current industry standards, teachers training to effectively guide students, and job fairs and matching opportunities nationwide.

Unified solution

In short, the initiative seeks to bridge the gap between theoretical education and practical industry experience to make students more attractive to potential employers. The latest attempt at resolving the job-skills mismatch is worth noting in that it will involve a cross-section of industries.

Joining the activity are the Semiconductors and Electronics Industries in the Philippines, IT Business Processing Association of the Philippines, Philippine Constructors Association, Confederation of Wearables Exporters of the Philippines, Philippine Chamber of Commerce and Industry, Employers Confederation of the Philippines, iPeople through the National Teachers College, SM Group, and Philippine Center for Entrepreneurship (Go Negosyo).

An initial 10 schools across the country are set to participate in the pilot program that will start in the 2024-2025 school year.

This is truly a very laudable and promising move, but what the country needs is a more permanent and unified solution to address the job mismatch problem, which has been hounding the labor sector for years.

As early as 2013, the Technical Education and Skills Development Authority (Tesda) had been looking for ways to plug the gap between education and the jobs available in the market. Citing the favorable business climate at that time, then Tesda head and now Sen. Joel Villanueva said they needed to hear their concerns and solicit recommendations on how his agency can address the job-skills mismatch through policies and programs.

Business process outsourcing

A classic example of the job-skills mismatch is provided in a 2015 study titled “The Consequences of Education Mismatch and Skill Mismatch on Employees’ Work Productivity” by professors from the University of Santo Tomas.

Booming in the early 2000s, it said the business process outsourcing industry was open to various degrees of educated individuals, with only minimum employment qualifications required such as a college degree, proficiency in English and computer literacy.

“Most of the applicants took courses that were unrelated to the jobs applied to; therefore, the company tends to spend more on training and retraining newly hired employees to match their skills and the industry needs,” it pointed out.

In 2022, the state-run Philippine Institute for Development Studies cited a 2022 study that found that 39 percent of employed individuals were overeducated, while over a quarter were undereducated. In short, the job mismatch problem was not being properly addressed.

Unified strategy

Last year, another effort to address the problem was also conducted by the Philippine Business for Education (PBEd), a nonprofit organization founded by the country’s top CEOs, in partnership with the Australian government.

On July 1, 2020, they launched a workforce development program called “A Future That Works” to bring down the jobs and skills gap by organizing industry leaders and experts through so-called Sectors Skills Councils that, as PBEd executive director Justine Raagas noted, could effectively communicate the needs of the industry.

The government strategy cannot forever change as the country’s leadership changes. Sporadic activities sponsored by different agencies and organizations will also solve only parts of a bigger problem. What the country needs is something permanent, a solution that is legislated.

Senate Bill No. 2333 was actually filed by Sen. Mark Villar seeking to create a tripartite council to address the job-skills mismatch problem, and provide the necessary funds for it. By having a law specifically to address the problem, and with an assured annual budget through a singular entity, a unified strategy will not be put at risk every time a new administration comes in. This is the only permanent way to resolve this crisis long hounding the labor sector.