Case Studies
Sham Majid
14 Sep 2015
Commissioner Nieves L Osorio, of the Philippine Civil Service Commission, made a case for Strategic HR in a speech titled Strategic HR: The Philippine Government Perspective during the 2014 HR Symposium in the Philippines last year.
“Simply put, Strategic HR is when HR processes are integrated and form part of the agency strategy,” she said.
“It is strategic when individual performance is linked to the achievement of organisational goals. Most importantly, it is strategic when there is a results-based performance monitoring system.”
She cited that the Philippines has this “in the form of the Performance-Based Incentive Scheme or the Performance-Based Bonus”.
According to The Official Gazette, the official journal of the Republic of the Philippines, the Performance-Based Bonus (PBB) system is a merit-based incentive programme that recognises and rewards exemplary performance in government.
Unveiled by the Benigno Aquino administration in 2012, the PBB ultimately aims to enhance “the delivery of goods and services to all Filipinos, as well as institute a culture of excellence in public service across the bureaucracy.”
It also appears that performance-based schemes are being extended to the wider Filipino workforce.
“Incentives and performance-based pay seem to be the new normal today, although merit increases and profit sharing remain in traditional companies,” says Amelita Aguila, Senior HR consultant and trainer of HR Club Philippines.
With the Filipino Government paying close attention to the advancement of the HR sector in the country, further developments, especially in strategic HR, are expected to occur in the coming years.
Understanding the “Phillennials”
The recent 2015 Deloitte Millennial survey by Deloitte shed light on some interesting findings from a Filipino perspective.
According to Greg Navarro, Managing Partner and CEO, Navarro Amper & Co, the Philippine practice of Deloitte Touche Tohmatsu, results specific to the Philippines show that in general, Filipino Millennials, or “Phillennials” as a local advertising agency has come to call them, hold businesses in high regard.
“An overwhelming majority of them – 91% – think businesses have a positive impact on the wider society, compared to 73% globally,” says Navarro.
“Also, 83% of ‘Phillennials’ believe that businesses behave in an ethical manner and that business leaders are committed to helping improve society.”
Further research found that 90% of Filipino respondents said they worked for a company that had a strong sense of purpose, while 88% said that purpose went beyond just financial success.
“With these results in mind, we can say that local businesses are working at an advantage since they have a very good reputation as far as millennials are concerned,” says Navarro.
“Already, this makes them attractive employers.”
According to Navarro, it’s not surprising then that millennials in emerging markets such as the Philippines seem to be more ambitious than their counterparts in developed countries.
Eighty-one per cent of ‘Phillennials’ aspire to reach the top post in their organisations, compared to just 53 percent globally.
“It makes sense that they want to lead businesses that they have high regard for,” he explains.
“That’s a good sign because you want that kind of appetite in the youth, and it also suggests that these millennials are invested in the continued good standing of their organisations.”
Navarro also says millennials aren’t just looking for businesses that give back to society; they are eager to be a part of that giving-back process themselves.
“That’s something to consider for businesses looking to attract the best and the brightest,” he adds.
Aguila says Filipino millennials are enterprising, self-motivated and aggressive.
“I believe it’s the culture of empowerment that our millennials regard highly, and the economic situation in the country that makes them aspire for leadership or senior executive positions within their current organisations,” she elaborates.
However, Aguila acknowledges that one negative trait millennials are known for, which can also be advantageous, is impatience.
“Thus, millennials will likely divert from traditional ways of moving up in their respective careers,” she explains.
“Flatter organisations will definitely be more appealing to them. Moreover, they normally associate the leader’s role with high pay and incentives, and so it serves as a motivating factor.”
Aguila states that Filipino millennials will typically seek jobs in the technology, media and telecommunications sectors as these can provide them with avenues for utilising and demonstrating their skills, experiences and work styles.
“They are the most connected people and working in these areas will further enhance their connections worldwide. Besides, these companies offer attractive compensation packages,” she adds.
The merits of internships
According to a recent JobStreet.com survey, a whopping 80% of respondent companies cited internships as the top factor they wanted fresh graduates to highlight in job interviews.
Grades (52%) were listed as the second most important aspect, followed by part-time jobs undertaken.
Interestingly, only one year earlier, the three most important factors organisations wanted fresh graduates to emphasise on their résumés and in interviews were internships, grades, and extracurricular activities.
Navarro says at Deloitte, student internships (as defined in the Philippines) have been particularly helpful in giving undergraduates a realistic first-hand preview of their intended careers and, as a result, screening out those who would rather do something else after graduation.
“If you receive a job application from a recent graduate who has had internship experience at a similar organisation as yours, then you are reasonably assured that the person knows what kind of work he or she is getting into,” he explains.
“Internship experience (especially when it’s not required by the curriculum) can also highlight a student’s commitment to learn in a particular field or industry. So it’s not surprising that a great majority of companies value internship experience.”
As for grades, Navarro says that while academic performance is not the only useful indicator of a job applicant’s future performance at work, it remains a generally reliable one. This is because it gives employers a picture of an applicant’s capacity for focus and hard work over four or five years.
“That being said, grades aren’t necessarily indicative of an applicant’s business acumen or how well he or she will assimilate into a company,” he adds.
Aguila elaborates that internships and apprenticeship programmes are designed to prepare recent graduates for the “real world of work”.
“Most companies prefer hiring applicants who have undergone apprenticeships either in-house or in other companies, and who have had part-time work experience to ensure smooth job performance and lesser time to supervise,” she says.
“They will definitely want their new hires to be productive in their first few days in the company. Business owners also invite graduating students to take on practicum courses in their companies as part of a recruitment strategy. These students become part of the talent pool.”
When it comes to job interviews, Aguila says HR practitioners validate their interview assessments with other tools such as testing, work samples and reference checking.
“Applicants who do well in selection interviews normally have a bigger chance to gain employment,” she says.
Commanding lucrative salaries
When it comes to the issue of wages, the JobStreet.com Philippines Salary Report for 2015 has found that those specialising in information technology (IT) are the ones most often raking in the big Filipino salaries.
The report highlighted that IT employees, particularly those specialising in software, networks, and database administration, have consistently occupied the top two spots across all position level categories (those with one to four years’ experience; those with more than five years’ experience, and managers and assistants managers).
“Based on my interaction with HR training participants, I have learnt that jobs in IT, engineering, communications, legal services, electronics, telemarketing, quality assurance, and customer service command higher pay and benefits than those in other industries,” says Aguila.
She also adds that more investments in training and career development in view of rapid technological changes and improvements in various industries are fast becoming a trend.
Navarro says the ASEAN Economic Community (AEC) is expected to ensure the free flow of labour within the region later this year, making the market even more competitive than it is now.
“There could be a push for local businesses to start designing compensation policies that will make them employers of choice, even for international talent,” he elaborates.
“Some of our Deloitte counterparts in Southeast Asia enjoy flexible, customisable benefits, and Philippine companies need to start evaluating the viability of such programmes locally in order to address the expected increased diversity in the workforce.”
Assessing satisfaction
On the aspect of employee contentment, the JobStreet.com Philippines 2014 Job Satisfaction Report highlighted that while a massive 85% of respondents felt that employee job satisfaction was “very important” to their companies, only 69% were making the effort to measure it.
Out of the firms that evaluate the job satisfaction of their employees, 74% confessed to using exit interviews upon resignation as their main measurement.
In addition, 63% cited that they hold team meetings, while 58% conduct employee surveys.
Another sign that companies may be espousing one thing and doing another is the frequency of their job satisfaction checks.
Only 42% of respondents claimed to evaluate their workers’ job satisfaction “as often as possible”, while 26% complete job satisfaction checks once a year. Sixteen per cent check quarterly, and 13% conduct them semi-annually.
From an employer’s perspective, 73% believe that salary is the chief factor for high levels of job satisfaction.
Benefits ranked second, while the quality of leadership ranked third.
According to Aguila, conducting employee job satisfaction surveys provides concrete proof of how much a company values its employees.
“The frequency of doing this may not be that significant for as long as the company offers other intrinsic rewards, such as work-life balance, a safe and happy workplace, and good leadership,” she says.
“The job itself is a source of satisfaction if it allows the employee to fully utilise their abilities and talents, gives them the freedom to explore new things, and provides them with constructive feedback.”
“Job satisfaction surveys are a must for companies who want to retain their talent.”
Overcoming the engagement hurdle
Navarro stresses that meaningful Corporate Social Responsibility (CSR) programmes are a good way of engaging employees, because these projects add to their sense of purpose.
“Activities that make employees feel well-taken care of are also good. In our firm, for example, we celebrate important dates such as Women’s Day,” he says.
“We also hold sports festivals and parties to mark milestones.”
“The employees appreciate these efforts because they are given a break from their work routine and they are given the opportunity to bond, have fun, and to get to know their co-workers.”
Aguila says HR departments should tackle the issue of employee engagement and performance management through various means.
These include hiring the right people with the right motivation to work, which is made possible by using the most reliable tools to determine whether an applicant possesses the required and desired characteristics of line managers.
“We need to train our managers and recruitment officers to screen applicants properly,” she elaborates.
Furthermore, she says Filipino companies should establish a solid onboarding process that begins when the new employee accepts the job offer. It should only finish when they are fully assimilated into the new role.
“There must be training and leadership development to enable employees to build their careers and to get promoted with an accompanying increase in pay and prestige,” says Aguila.
She also says an employer-employee relations programme should be crafted to foster teamwork and a positive work atmosphere.
Filipino firms must formulate performance management strategies that will make employees understand their roles and goals, give them feedback on their performance, coach them so they can improve, provide them with the necessary resources and reward them for their successful performance, thus giving them a sense of fulfilment.
“There must be an equitable and competitive compensation scheme, plus rewards that will suit the needs and preferences of employees so they are not tempted to explore outside,” adds Aguila.
Tackling impending issues
So, just what are some key HR challenges and issues HR professionals in the Philippines can look forward to tackling in the later part of this year and into 2016?
From a recruitment angle, Navarro says the business process outsourcing (BPO) sector has not slowed down.
“Employment in that sector now stands at a little over a million, with the target for 2016 being 1.4 million people. In fact, the need for skilled workers in that sector is so strong that businesses are now having a hard time filling vacant posts,” he explains.
He says the government is also pushing for the resurgence of the local manufacturing sector and hopes to see a 15% increase in employment there by 2025.
“Recently, it launched a programme designed to jumpstart automotive manufacturing in the country, which is being supported by local vehicle groups. So we’ll see if that programme does what it’s intended to do and spurs hiring among car companies,” says Navarro.
He adds that in the second half of 2015, HR professionals should focus on labour issues that will result from the AEC and the government’s K-12 programme.
“The AEC will drive greater mobility, especially among millennials, so HR leaders should provide programmes to develop these millennials’ global competencies, most important of which are global business acumen and cross-cultural agility,” explains Navarro.
The K-12 program, which was implemented by the current national administration in 2013, added two years to the country’s basic education curriculum.
“As a result, in a few years, there will be a two-year absence of fresh graduates, so businesses should firm up their game plans and come up with creative ways to address this temporary shortage of labour,” says Navarro.
“They need to prepare for a big war for talent.”
By contrast, Aguila foresees an oversupply of labour, even for in-demand positions. This will be because of insufficient job opportunities in the local market.
“Both skilled and professional workers also prefer to work abroad for higher pay,” she says.
She believes that HR professionals and executives in the Philippines need to focus on issues such as ASEAN integration, scarcity and poaching of talents, employee retention, reskilling of HR professionals, career pathing, and the development of millennials.
“To overcome these, HR professionals and executives are working hand in hand, and are collaborating with various government agencies pertaining to local and foreign employment, skills development, professional education, and other work conditions,” she explains.
Top 5 skills required for Filipino graduates
Communication skills
Trainability
Competence
Problem solving and analytical skills
Technology know-how
Source: JobStreet.com survey
Slide in online hiring
According to the Monster Employment Index Philippines:
Online hiring activity dropped by 43% between May 2014 and May 2015
The Production, Manufacturing, Automotive and Ancillary industries continue to see steep declines, down 62% for the year.
Human Resources
Article Summary:
Strategic HR is increasingly becoming a priority for both the public and private sectors in the Philippines. But while the Southeast Asian nation is restructuring its HR blueprint, it is still faced by some daunting challenges. HRM investigates
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Case Studies