Companies struggle to match increase in skill supply amidst a more, young educated labour force
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With a record low of 46.9 per cent in 1992, Sri Lanka’s labour force participation rate has experienced an upwards trend and settled at around 53 per cent in the last two years.
With labour force participation increasing, it is positive to observe a downward trend in the country’s unemployment rate, despite its minimal rise of 0.6 per cent in 2012 from 4 per cent to 4.6 per cent in 2015, according to Central Bank data. An alarming fact, however, is the vast difference between youth and total unemployment; there are numerous reasons for it.
Sri Lanka’s gross enrolment ratio for tertiary education more than quadrupled between 1994 to 2014, from less than 5 to more than 20 per cent (Source: UNESCO Institute for Statistics, data.worldbank.org). Young people are becoming more and more educated, while the private and public sector struggle with providing jobs that meet the needs of the increasingly educated youth. This discrepancy provides one reason why youth unemployment is considerably higher than overall unemployment which in the 3rd quarter of 2016 was nearly five times as high with 21.6 per cent. In their analysis of the national job market of 2016, everjobs.lk, Sri Lanka’s fastest growing job portal, found that white collar jobs such as those within banking or project management receive 20 and 12 applications per vacancy respectively. It and accounting jobs still attract more than 7 jobseekers per position. Lower skill level positions, for example in maintenance/repair, manufacturing or construction, experience a comparably low level of interest with around two applications per job. But instead of tackling this type of structural unemployment by actively creating jobs in industries that are on the rise – in a global context as well as in terms of demand by fresh graduates – we observed Sri Lanka Freedom Party-led governments recruiting fresh graduates to the public service. This, of course, is not a sustainable solution, as well as does not solve the problem of young people being in a job they’re unhappy with. In a survey among more than 100 young jobseekers, everjobs.lk found that more than half of the respondents apply, or even start a job they know upfront they will be unhappy in. This, however, has far-reaching effects. Young people often do not turn up to interviews, do not pick up their phones when called and thus exponentially raise recruitment costs for companies, both in a monetary sense as well as in in the most crucial resource – time. This is a trend, we at everjobs.lk have observed, since the beginning of our operations. Young people switch jobs quickly, sometimes within the matter of a few months. Also, it’s not rare that you meet a young graduate who holds a degree in marketing, as well as completed certificates and diplomas in it and accounting. They strive to be an all-rounder and therefore increase their demands to the job market.
Sri Lanka currently takes the 110th spot in the World Bank’s ranking for ‘ease of doing business’, thus showing that simply being aware of these difficulties is not enough to actually resolve them. It is apparent that the government needs to work closely with the private sector in order to avoid increasing the intensity of the vacancy mismatch. The country no doubt has tough times ahead and needs to act fast if it wants to become more competitive in a global context.
(The writer is head of business development at everjobs.lk and can be reached at daniel.topolanek@everjobs.lk. everjobs.com is a career portal currently operating in Cambodia, Bangladesh, Sri Lanka and Myanmar. Officially launched in March 2015, everjobs aims to become the leading job portal in fast growing economies finding the right match for both, employers and candidates). Â