Home > On The Ground In The Philippines > Is There A Middle Management Skill Gap In The Philippines? [part 1]

Is There a Middle Management Skill Gap in the Philippines? [Part 1]


L1Any business process outsourcing (BPO) conference in the Philippines resolves down to a discussion on the middle management skills gap. The consensus is that there is a big hole in the workforce; there are not enough middle managers to fill the necessary positions. I believe that the primary reason there is a skills gap when it comes to middle management lies with the BPO industry itself – not with any inherent weakness of the Filipino education system or unbridgeable cultural gap.There is no lack of human beings with the potential to be fantastic middle managers. There must be millions with the potential.

At the broadest level, there are two possible causes for this gap.

 Philippine Problem: That there is some fundamental ‘weakness’ in the Filipino employment market which is preventing these middle managers from emerging.

BPO Problem: That there is some fundamental ‘weakness’ in the BPO industry which is preventing these middle managers from emerging.

I argue ‘prevent from emerging’ as there is one indisputable fact – and that is that there are a LOT of Filipinos. By various estimates there are around 100 million, the average age is around 20 and workforce participation is probably only around 40%.

Therefore, there is no lack of human beings with the potential to be fantastic middle managers. There must be millions with the potential.

In this first article I am going to argue that it is a Filipino problem – in the next article I will argue the opposite.

Philippine Problem

There are many reasons offered by many (not just foreigners, many Filipinos say this stuff) I speak to regarding the middle management gap including:

1. The Colonial Hangover: The essence of this argument is that before the BPO industry existed the entire Philippine archipelago was inhabited only by subsistence fishermen and farmers tending coconut groves and rice paddies… and that as a result, after only 20-or-so years, it has not been possible for the BPO industry to ‘lift’ enough people to the standard they require for these middle management positions.

This argument appeals to the lizard-brain buried deep inside many executives and is a very popular but highly objectionable position which I will take issue with in Part 2 of this article.

L22. Education System: The Philippine education system has two great strengths. First, it is pretty much universal (despite significant poverty levels). Second, it teaches reasonable English. But, it has to be said, it also has many faults. These faults broadly fall into two categories – funding and methodology.

(a)Funding:  There just simply isn’t the money in the education budget to go around. Lots of kids have to share text books, many don’t have pens or paper, many don’t even have chairs. Many schools are so crowded they might have 40 to a                     class, and the single teacher has two shifts a day; this means that a single teacher might be responsible for up to 80 students.

On top of this, most teachers are paid no more than Php18,000 (AUD530) a month; this significantly less than any reasonable measure of the poverty line.

(b) Methodology: The Philippine education system is based on rote-learning. It produces employees who are fabulous at memorising lots of things and who are also capable of incredible attention to detail.  However, it is undeniable that creative               problem-solving skills are under-developed in the general population of prospective employees.

(We have personal experience here – when we moved our kids from Australia to the Philippines to start Flat Planet we at first put them into a top-shelf local school – Colegio de San Augustin in Dasmariñas Village, Makati. We wanted our kids to have a cultural experience. We encountered the syllabus first hand and the cultural gap between the approach of the Australian and Philippine education systems were very significant.)

L33. Cultural Reasons: Anyone who tells you that the Philippines is culturally aligned with, say, Australia or the US is talking through their hat. Just because Filipinos speak English, are mostly Catholic and eat American fast food does not mean that they don’t have their own unique culture.

Filipino culture is no different from any other culture – it has good points and bad points.

There are a couple of points relating to the culture gap that are often raised as reasons why there is a lack of strong middle managers.

4. Primacy of Family – Filipino culture works around these incredibly complicated bonds of loyalty that tie together not just a nuclear or extended family, but also an entire community. It is an entirely different mindset from the broken-down Western concept of family or community. This mindset can directly impact on decision making;  a person’s process runs around the question  “is my loyalty more to my family, my ‘bonded’ workmate or to my employer?”

I say ‘bonded’ deliberately. There are all sorts of ways, both conscious and unconscious, most of them unfathomable, where Filipinos become entangled with each other with a host of real and imagined ‘debts’.

I realise fully that in the West, we castigate ourselves over the breakdown of family and family values. While I don’t subscribe to the idea that such values have completely broken down (I love my family and try to keep in touch) at the same time, living in the Philippines, I can see there is a huge benefit to business in such a breakdown.

In the West we are able to clearly conceptualise a business as a distinct entity that is completely removed from any human personality – we can give our focus and loyalty to that abstract entity and make decisions in its best interest without regard to our personal interests at home.

This Western abstraction of a business entity is polar opposite to how it is in the Philippines. Everything here is about family – even the massive corporations such as Ayala, San Miguel and Philippine Airlines are enmeshed in family politics.

This cultural gap does create a significant tension as many senior ‘Western’ managers sense it without necessarily being aware of it. As such, it can erode confidence in the decision-making processes of the middle management team who are, in truth, often genuinely conflicted for all the reasons just discussed.

5. The Curse of ‘Palusot’ – Palusot means ‘excuse’. It is a verb here in the Philippines. People ‘make palusot’.

Palusot is almost a revered art form. People who can make up great excuses can go far. If you are a master at palusot, the sky is the limit – you can get away with almost any behavior. I hate to say it, but I don’t think I am not being too controversial to say that ‘Palusot’ is at the centre of Filipino political culture.

Here is how palusot works (I am going to contrast the Philippines with Australian culture).


You arrive at the office late. You go to your desk and try not to be noticed. If your boss calls you over you make an excuse (palusot). Palusot should be plausible and contain some notion that you were helpless (fate).  It should also evoke some reference to a higher duty (your family) and, if it is great palusot, it should also evoke some sympathy.

Therefore, classic palusot is, 'I had to take my Auntie to hospital for dialyses.' This palusot hits all the markers. Your duty to your family delayed you, your Auntie is sick (sympathy), you had no choice (no dialyses = death). It is also plausible as everyone has such huge extended families that it is probable that at least one of them is sick on any given day.

The next step in palusot is that the boss is supposed to accept it – even though they know for certain that you simply overslept.

The acceptance of the palusot is an act of redemption by the boss. The boss takes on the responsibility for the situation themselves and the latecomer is absolved of any personal responsibility.


You are late for work.

You go straight to your boss and you say… ‘I am sorry, I am late, it is my fault, no excuses.’

Your boss, in theory, will appreciate that you have taken responsibility for your actions (you are accountable) and they should also appreciate you have offered no excuses (you respect your boss) and they should say something like ‘Ok, don’t do it again.’

The boss might have a rant, but normally that is the end of the matter.

You never ever try to solicit sympathy as that conveys weakness and a sense that you are in some way either a victim or helpless or both. If you play ‘palusot’ in Australia you are quickly placed in the too-hard basket and your career becomes very limited.

Therefore, the cultural gap in the way that a middle manager deals with their team is very significant.

What you have is this very difficult position where you have a senior management layer often mostly made up of foreigners (Americans, Australians etc).

The management in the middle has the very difficult job of not only doing all the classic middle management tasks around allocating resources and managing performance, but they also have to bridge the huge gap between their people (the workforce) and the foreigners at a cultural level.

At the same time, the middle managers themselves are inherently conflicted due to their own internal uncertainties around their own instinctive decision making hierarchies.

Now, put on top of that the whole issue around how their own education was structured, and remember that even those who went to university could have, at best, only attended University of the Philippines which, despite being the best university in the Philippines, is still ranked outside the Global 1000 (one thousand).

All of this argument to one side; I still believe that the primary reason there is a skills gap when it comes to middle management lies with the BPO industry itself – not with any inherent weakness of the Filipino education system or unbridgeable cultural gap.

Is there a Middle Management Skills Gap in the Philippines (Part 2)

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