Philippines: One of the World’s Largest and Most Cost-Effective Contingent Labor Pools

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The Philippines’ large, skilled labor pool and low cost of doing business will continue to make this one of the most attractive contingent labor markets globally.

The Philippines remains one of the world’s largest and most cost-effective contingent labor pools, especially with regard to skilled IT and call-center workers. While Presidential-elect Eduardo Duterte’s proposed new law requiring all new hires who have worked continuously for six months to be “regularized” is worth monitoring, his vow to put an end to the “contractualization of labor” will have a minimal effect on most industry segments.

It is important to note that while future changes to regulations may have a substantial impact on the sustainability of contingent workforce programs in any market, only the current regulatory influences are factored into the CWI each year. With contract labor making up almost 30 percent of the Philippines’ workforce, the new law will impact many employers across the Philippines although most of them will be in industries hiring low-skilled physical laborers. The construction industry workforce, of which 71 percent are end-of-contract workers, will be the most affected but the majority of other industries, especially those seeking better-skilled workers, will experience little change.

While ending contractualization could make the Philippines less competitive for employers seeking a less-skilled, lower-cost workforce, the overall impact on the contingent labor pool will likely be insignificant if organizations have the right mix of contracted, freelance and project-based labor.