Declining productivity among PH workers
Corporate Securities Info

Declining productivity among PH workers

A recent World Bank study showed that the level of productivity among workers in the Philippines, Indonesia, Malaysia and Vietnam, especially in the digital and electronic sectors, had fallen since the 2000s.

The report states, among others, that while the level of productivity of global companies in the digital manufacturing sector had increased by 76 percent from 2005 to 2015, that of the four countries mentioned grew by only 31 percent on the average.

The growth rates should be viewed in the context that developed countries have the first crack on state-of-the-art technology before they reach developing countries.To slow down the decline in productivity, the World Bank called on the countries’ leading companies to ensure that their workers are given the necessary digital and management skills in order to promote investment and development growth.


READ: World Bank flags declining productivity of workers


In the Philippine labor market today, proficiency—or at least, basic knowledge—in digital technology is a standard requirement for skilled work, or work that requires some degree of education and training to be able to handle complex tasks.

Without it, the chances of getting employed in that field would be slim, if not next to impossible. Computer illiteracy can be a disqualifying factor for employment.

Almost all facets of commercial activity these days, except those that are manual in character or required by law or corporate practice to be preserved on hard copy, are computer- or IT (information technology)-related.

It is ideal for a business to be fully computerized and have IT-proficient staff to be on board, but the costs and expenses that go with that capability are not chicken feed.

While most IT hardware may be affordable, the software or applications needed to maximize their use can be financially burdensome, so much so that some companies are forced to use clones or pirated copies to reduce their operating costs.

In the unlikely event they get caught, a public apology or a promise not to do it again could let them off the hook.


Then there is the issue of connectivity. Transactions in the digital space require an efficient internet system. Although the Philippines has three service providers, there is still much to be desired in meeting the continuing demand for connectivity.But there is a bigger issue other than the dearth in digital and management skills that may explain the decline in the productivity of Filipino workers—their compensation.

READ: Gov’t finalizing Connectivity Index Rating metric

No question about it, a worker’s productivity is heavily influenced by his or her level of satisfaction at the workplace.

If a worker feels his or her work is appreciated and he or she is paid a decent living wage (or something that would enable him or her to reasonably meet the requirements of daily life), that employee can be expected to work with utmost efficiency and productivity.

Otherwise, he or she would exert the least effort to meet the minimum requirements of the job. What’s the point in doing more work than required if the compensation is not commensurate to that effort?

This brings us to the issue on the upward adjustment of the minimum wage that is now pending in the two chambers of Congress.

On Feb. 19, the Senate unanimously approved on third and final reading a bill that would require employers in the private sector to grant a P100-daily pay increase for employees who are receiving minimum wage to enable them to cope with the country’s high inflation rate.

For the same reason, the House of Representatives is considering a P150 to P350 increase on the daily minimum wage. To date, however, the exact figure on that proposal remains unresolved.

Almost two months had passed since that issue became a hot topic in the business and labor sectors, where both sides (as expected) presented divergent views on it, and with the way things are moving, the proposed increase may not come to fruition at all.The idiom “an army marches on its stomach” applies squarely to Filipino workers. Is it any surprise then that their productivity is in the pits? INQ

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