040308: Worker lack to weigh on ICT industry growth

Vol. XXI, No. 172
Thursday, April 03, 2008 | MANILA, PHILIPPINES

Today’s Headlines

AN "INSUFFICIENT labor pool" will likely hold back growth of the Philippine information communication and technology (ICT) sector, a new study showed, necessitating the adoption of programs aimed at raising both the quantity and quality of locally-trained workers.

Research and advisory firm XMG, in a statement, said a first quarter study of Asian offshoring countries pointed to an average 10% growth for the Philippine information technology (IT) labor pool over the last five years. This would likely grow by 3% in the next two to three years, a rate that is insufficient given forecasts of ICT growth of 30-35% in terms of full-time employment.

Most of the IT workers would come from Metro Manila, accounting for 22% of an estimated 50,000 to 60,000 graduates annually.

"There is a clear need to establish additional training institutions and ladderized degree programs by existing universities...," the statement quoted statistician Benedict Dormitorio as saying.

He said this would "boost the dwindling talent supply due to the growth of the Philippine offshoring industry and the migration of IT skilled workforce to countries such as the United States, Singapore, Canada, the Middle East, and Europe."

Curriculums, he added, should be aligned with current market needs via consultations with ICT companies and organizations.

XMG said its study identified shortages workers proficient in the Python, VBScript, Perl, XML and VB.net programming languages. "For programming and business solutions, IT skills on SAS (statistical analysis software), SAP (systems applications products), Lotus Notes and MySQL will be increasingly difficult to source and companies must be prepared to pay a premium price to recruit these individuals," it said.

Networking skills, it added, will be at risk.

"Across all segments, there is an significant decreasing trend on the available labor force meeting the required IT skills set needed by the market," Mr. Dormitorio said.

XMG chief analyst Lauro Vives, in the same statement, said companies needed to be aware of the situation and adjust strategies to "mitigate risk coming from the labor market".

"It is imperative to first understand the saturation level of the labor market by forecasting both demand and talent supply before making any firm commitment on expansion plans or further investments," he added.

XMG suggested that firms extend their recruitment reach, improve their "skill development pathways", enrich retention and provide "hot skills training."

Philippine Software Industry Association adviser and former president Fermin Taruc said XMG’s workforce forecast was feasible.

"That [labor slowdown] is a possibility. There is a continuous demand for manpower because the industry is growing rapidly and the hiring patterns have shifted," he said.

Joey Gurango, chief executive officer of Filipino-owned software developing firm Gurango Software Corp. said the outsourcing sector would be the most adversely affected by labor supply issue.

"The BPO (business process outsourcing sector) is dependent on labor to fulfill their contracts with clients ... But generally they would still do well this year. For how long, we do not know," he said.

Meanwhile, Roger Stone, deputy chairman of publicly listed ICT firm IPVG Corp., said he remained optimistic despite the projected supply problem.

"Our business, according to current projections, is not in any way constrained by the available labor. Growth is not entirely dependent of the labor market, but if it does happen, we are going to act accordingly," he said.