Labor Demand-Supply Dynamics in the Digital Age: Empirical Evidence from SMEs in Mandaue City

This study investigated the labor demand-supply dynamics among small and medium-sized enterprises (SMEs) in Mandaue City within the broader context of digital transformation. Guided by a descriptive-correlational quantitative research design, the study aimed to describe the current state of labor equilibrium and assess the predictive influence of six key organizational and technological factors: automation anxiety, digital skills readiness, access to policy incentives, recruitment technology usage, perceived market volatility, and flexibility in work arrangements. Data were collected from 300 purposively selected SME owners and decision-makers across the manufacturing, retail, and service sectors using a structured survey instrument. Descriptive statistics were employed to summarize prevailing labor challenges, while multiple linear regression analysis was used to identify significant predictors of labor stability. Findings revealed that SMEs moderately sustain labor demand-supply equilibrium but continue to struggle with timely hiring and skills mismatch. Digital skills readiness (β = 0.261), recruitment technology usage (β = 0.189), and flexible work arrangements (β = 0.143) were found to significantly and positively influence labor equilibrium, whereas automation anxiety (β =-0.142) and perceived market volatility (β =-0.124) exerted negative effects. Access to policy incentives was not statistically significant. These results underscore the strategic importance of digital preparedness, agile workforce systems, and proactive talent alignment in navigating labor market challenges. The study contributes empirical insights to the evolving literature on digital labor economics in emerging markets and offers practical guidance for workforce development, policy design, and SME resilience in urbanized economies such as Mandaue City and across Southeast Asia.