The Philippine Online Chronicles

Out of every ten fresh college graduates who will decide to join the labor market this year, only three will be lucky to actually land a job, warned the independent research and advocacy group IBON Foundation in a statement. The group’s findings underscore the worsening situation in domestic employment, which has been only propped up, aside from the increasingly aggressive export of Filipino labor, by the rapid expansion in recent years of the business process outsourcing (BPO) industry.

Being a call center agent, which is the most known and largest BPO job comprising about 63.3 percent of the industry’s workforce last year, has somehow become a “natural career path” for the new graduates. The apparent reasons are either they could not find a company that needs their finished college degree or in cases when they did find one, they realized that call centers offer a relatively higher pay. Indeed, there has been a dramatic rise in the BPO workforce – from only 2,400 in 2000, the number has skyrocketed to 442,164 in 2009 or an annual expansion of about 48,863 new BPO jobs in the last nine years.

No surefire employment

A study conducted by the Canada-based research and advisory firm XMG claimed that the BPO industry is seen to be in the best position to absorb the graduates from the country’s colleges and universities. While hesitant at first for various reasons, “55 percent among fresh graduates would reconsider working for the BPO industry once they immersed themselves in the job market in order to mitigate financial constraints and be able to support their families”, said the global ICT research and advisory company.

But if IBON’s prognosis of the employment opportunities, or the lack of it, awaiting the new college graduates this year, is correct, it implies that even the much touted BPO sector will not be able to accommodate the degree-holding new job-seekers. There is no surefire employment after all for the new graduates in the increasing number of call centers in the country.

A separate study by the Department of Labor and Employment’s (DOLE) Bureau of Local Employment (BLE) claims that the problem is not lack of available jobs but the skills and qualifications of the new graduates. According to the said agency, in the BPO industry, “only three out of every 100 new college graduates are hired yearly due to their failure to pass competitive qualifying exams”.

According to Evelyn Dacumus, officer in charge of the labor market information, research, and career guidance advocacy division in the BLE, “many of the graduates are still not ready for work”. It is unfortunate, since according to Dacumus, “we have lots of vacancies” for the fresh graduates, mostly in companies in the BPO and information technology sectors. In fact, latest data from online employment ports – PhilJobnet, Jobstreet, and JobsDB – show that 97.5 percent of available jobs from 2010 onwards are in the so-called cyber services.

A tight domestic labor market

Could it be that the sheer size of the additional workers produced by the colleges and universities each year easily overwhelms the number of available jobs even in sectors such as the BPO whose expansion rate is often described as “blistering” by industry leaders and government labor officials?

Dr. Romulo Virola, secretary general of the National Statistical Coordination Board (NSCB), devised a method to estimate the capacity of the labor market to absorb the graduates of tertiary schools. He related the number of tertiary graduates with new hires by major occupation group. Virola deducted the employment for laborers and unskilled workers, farmers, forestry workers, fishermen, and plant operators based on the assumption that college graduates will apply for work only in the other occupation groups. He estimated the number of new hires by obtaining the difference in employment between the present year and the previous year. Finally, Virola divided the number of new hires with the number of tertiary graduates.

Using this method, processed data from the Labor Force Survey (LFS) of the National Statistics Office (NSO) and the Commission on Higher Education (CHED) will show that from 2003 to 2010, the number of new hires as a percentage of the total number of college graduates is pegged at only 63 percent per year.

This suggests a very tight labor market for the country’s new graduates, which reach more than 439,000 annually in the last eight years. The number of new jobs created every year in occupation groups where the college graduates may want to apply for such as officials of government and special interest organizations, corporate executives, managers, managing proprietors, and supervisors; professionals; technicians and associate professionals; clerks; service workers and shop and market sales workers; and trade and related workers is pegged at only less than 270,000.

Note also that the portion of college graduates among the ranks of the unemployed has been increasing through the years. Available data show that from 15.8 percent in 2004, the portion of college graduates among the unemployed has increased to more than 18 percent annually in the last four years. (See Table)

Working abroad as option

The failure of the economy to generate jobs for Filipino workers, including the college graduates is being mitigated only by an aggressive labor export policy of government. From only a couple of thousands in the 1970s when the Marcos dictatorship first facilitated the export of Filipino workers, the country is now sending more than a million workers abroad.

Unfortunately, even landing abroad is proving to be problematic for the Filipino college graduates. In 2008, for instance, the Philippine Overseas Employment Administration (POEA), revising earlier figures, reported that the deployment of newly hired land-based OFWs fell by nearly 30 percent – from 306,383 in 2007 to just 216,803. Newly hired OFWs include fresh graduates and first time workers. The drop in deployment shows the vulnerability of a job creation program hinged on the world labor market, which has been undergoing a major contraction due to the global financial and economic crunch.

Recruitment consultants and experts, on the other hand, blame the educational system that is supposedly inconsistent with the global demand as they note that there is a “disastrous oversupply of unemployable graduates”. GMANews.TV, quoting recruitment consultant Emmanuel Geslani, reported last year that “many overseas employment opportunities abound in sub-specialties of various occupations but the Philippine education system is either ill-equipped and/or unprepared to offer corresponding courses to the demand but rather do a ‘one course fits all’ mentality”.

College graduates, in order to find employment abroad, are forced to accept jobs that are not consistent with the course they finished in school. As little as five percent of employed college graduates are in jobs consistent with their course, said placement industry leader Lito B. Soriano, executive director of the Federated Associations of Manpower Exporters, Inc. (FAME) in his study entitled “The OFW economic engine, Philippine Reality and Required Reform Arising from the Global Financial Crisis”.

So where will our college graduates go?

Former National Economic and Development Authority (NEDA) chief and now senatoriable Ralph Recto, during the height of the massive displacements last year due to the global crisis, had an interesting advice to the new graduates – “do not look for work, go back to school”.

Photos c/o PIA.