Law aimed at solving the problem of mismatch between professional skills and qualifications

The government and the private sector are making further attempts to address the problem of the growing mismatch between professional qualifications and employee needs, which contributes to high unemployment and underemployment in the country.

The Department of Education and the Private Sector Advisory Council (PSAC) signed a memorandum of understanding last week to pilot an enhanced job immersion program to increase the chances of high school students finding jobs after graduation. Created in July 2022 by President Marcos, the PSAC is comprised of the country’s top business leaders who will advise the government on issues affecting key sectors of the economy. The council established the Private Sector Jobs and Skills Corp. as a nonprofit, non-public company as its legal entity “to organize a well-coordinated national movement of government, industry and academia to address the country’s job and skills mismatch.” The latest agreement will include adjusting the curriculum to give students more hours to learn skills aligned with prevailing industry standards, training teachers to effectively guide students, and job fairs and matching opportunities nationwide.

Uniform solution

In short, the initiative aims to bridge the gap between theoretical education and practical industry experience to make students more attractive to potential employers. The latest attempt to address the skills mismatch is noteworthy because it will cover a cross-section of industries. Joining in the effort 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 via the National Teachers College, SM Group, and Philippine Center for Entrepreneurship (Go Negosyo). Initially, 10 schools across the country are set to participate in the pilot program, which will begin in the 2024-2025 school year.

This is indeed a very commendable and promising move, but the country needs a more permanent and unified solution to the problem of job mismatch that has plagued the labor sector for years. As far back as 2013, the Technical Education and Skills Development Authority (Tesda) was looking at ways to bridge the gap between education and available jobs. Citing the favorable business climate at the time, then-Tesda chief and now senator Joel Villanueva said they needed to listen to their concerns and ask for recommendations on how his agency could address the skills mismatch through policies and programs.

Business Process Outsourcing

A classic example of job skill mismatch comes from a 2015 study titled “The Consequences of Education Mismatch and Skill Mismatch on Employees’ Work Productivity” by professors at the University of Santo Tomas. The business process outsourcing industry that flourished in the early 2000s was open to people with varying degrees of education, with only minimal job qualifications required, such as a college degree, English language skills, and computer skills. “Most candidates had completed courses unrelated to the positions they applied for; therefore, the company tends to spend more on training and retraining new hires to match their skills to industry needs,” it noted. In 2022, the state-run Philippine Institute for Development Studies cited a 2022 study that found that 39 percent of hires were overskilled, while more than a quarter were underskilled. In short, job mismatch was not being adequately addressed.

United strategy

Last year, Philippine Business for Education (PBEd), a nonprofit organization founded by the country’s top CEOs in partnership with the Australian government, took another crack at the problem. On July 1, 2020, they launched a workforce development program called “A Future That Works” to bridge the employment and skills gap by organizing industry leaders and experts through Sectors Skills Councils, which PBEd executive director Justine Raagas noted could effectively communicate the industry’s needs.

The government’s strategy cannot change forever when the country’s leadership changes. Sporadic actions sponsored by different agencies and organizations will also only solve part of the larger problem. The country needs something permanent, a solution that is enacted. Senate Bill 2333 was actually filed by Senator Mark Villar, who wanted to create a tripartite council to address the problem of job skills mismatch and provide the necessary funds for this purpose. With a law specifically dedicated to this problem and providing an annual budget through a single entity, the unified strategy will not be jeopardized every time a new administration comes in. This is the only permanent way to solve this crisis that has long plagued the labor sector.