Filipino workers from all sectors and industries are no strangers to being unemployed. In fact, historical data from Trading Economics shows that the unemployment rate in the country averaged 8.44 percent from 1994 to 2018. It even reached a record high of 13.90 percent in the first quarter of 2000.
Only in recent years has this singular problem been observed to ease up. According to a new report by the Philippine Statistics Authority (PSA) the unemployment rate has slightly declined. From 5.7 percent in April 2017, it dipped to 5.5 percent in April 2018, the lowest recorded rate for all April surveys in the past decade.
But while the number of employed workers rose, another long-standing issue, especially for HR practitioners, became more apparent: underemployment is on the rise. Compared to April 2017, the underemployment rate for April 2018 increased by 0.9 percentage points to 17 percent. 47.1 percent of those work in the services sector, 32.4 percent in the agriculture sector, and 20.5 percent in the industry sector. This means that as of now, an alarming 6.9 million workers may be taking on jobs that they are vastly overqualified for and are thus grossly underused in their current professions.
Unemployment vs underemployment
Unemployment is an economic situation where an individual who is actively searching for employment is unable to find work. In contrast, underemployment is a measure of how well the labor force is being utilized in terms of experience, skills and availability to work.
In most countries, the unemployment rate takes up most of the spotlight and is seen as the main indicator of the job market’s health. As many economists will tell you, however, it is impossible to capture the strength and weakness of something as complex as the labor market in just one number. The unemployment rate, in particular, is hardly an accurate representation of the job market’s status because it fails to take into account the full potential of the entire labor force. The unemployment rate is also calculated based solely on the labor force, often excluding people who are too discouraged to seek a job or a new line of work. This is why we need to recognize other comprehensive measures like the underemployment rate to assess labor market health.
Furthermore, underemployment has a more adverse impact on the economy because it directly contributes to a phenomenon called “brain drain” or the emigration of highly intelligent and skilled professionals from a country to another where they expect better pay, working conditions and even lifestyle. This is common in developing countries like ours due to the scarcity of job opportunities that match each individual’s talent and education.
Two types of underemployment
Generally, labor falls under this classification if the worker is highly skilled but working in a low paying job, highly skilled but working in a low skill job, or a part-time employee who would prefer to be full time. But underemployment is further divided into two types: visible and invisible.
Visibly underemployed persons are those who work for less than 40 hours in a week or whatever is considered the bare minimum of work hours for their field. These workers accounted for 52.5 percent of the total underemployed in April 2018 alone. Most people who fall under this category work two-part time jobs just to pay the bills.
On the other hand, workers who belong in the invisible underemployment type are those that are overqualified for their present jobs. Unlike the first classification, invisible underemployment is rather difficult to quantify because it requires extensive surveying. Researchers will need to compare workers’ skills against the requirements of their present jobs. And more often than not, workers are not even aware that some of their skills make them better suited to other jobs.
There are no easy, straightforward fixes to underemployment as this is an issue that will need to be tackled on a national scale. But taking note of these simple tips may help your HR department become better equipped to deal with any underemployed workers you might have and better apply their full skill set in your company.
Look specifically for trainable applicants
Combating underemployment in the workplace should start at the recruitment stage. An article from the Society for Human Resource Management recommends looking for applicants who are trainable. Recruitment specialists should write better job descriptions that communicate this specific need in order to ensure better job-fit matches.
This means going beyond just including the technical skills, hard skills and professional capabilities in your job ad. You should also clearly define soft-skills requirements such as the types or amount of writing and speaking required for the job, the ability to work well with a team, strong sense of leadership, etc.
Consider apprenticeship programs
Meanwhile, Time suggests looking into creating an expanded apprenticeship program as another way to help drive down rampant underemployment. If your company already has an internship program, you might want to consider building from that. Give your trainees the option to continue learning under your wing after you have given them basic training.
An ideal apprenticeship offers longer and more in-depth kind of coaching than the typical internship program. Such programs should also provide a more hands-on training alongside classroom support. At the end of the program, you will already have fully-trained employees ready and willing to join your existing workforce.
Provide opportunities to move up
It’s certainly possible to gradually become underemployed just by staying in one professional position for too long. And unfortunately, many companies are directly complicit in this. An article on Monster says that “Many employers have foisted underemployment on their workers by handing them ever-larger portions of the same work without granting them higher responsibilities.”
To avoid professional stagnation, make sure that employees have the opportunity to advance their career and be promoted. Encourage your most promising employees to step up to the plate by providing them with incentives or rewards. This will surely help cut down the efforts and time you would otherwise spend trying to fill a high ranking position.
In some ways, underemployment is a bigger hurdle than unemployment. Chronic underutilization of your employees’ skills, education and human capital may lead to workplace frustration and low morale. Looking at the bigger picture, it also hurts the economy and the labor market. With such risks, companies and their HR teams should not be creating jobs for the sole purpose of filling a vacant post. Focus on the goal of creating long-term careers that will continually challenge your employees to thrive.