SIEP: Skills for Employment Investment Project
Skill Gap Analysis in Selected Sectors
This study examined the skills gap situation in 9 important sectors of Bangladesh, as follows: agro-food, construction, health, hospitality and tourism, ICT, leather goods, light engineering, RMG and ship building. Skill shortage is a situation where employers find difficulties in filling vacancies because there are not enough workers with the desired skills or employers are hiring workers but they are considered under-skilled and do not possess necessary expertise.
The objective of the study was to assess labour and skills shortages, emerging trends, and training needs in the short-medium run.
The methodology consisted of desk review of secondary data, survey of enterprises, generation of both quantitative and qualitative data. A projection methodology was adopted based on future GDP growth rates, elasticity of value added of the sectors to GDP; employment elasticities of sectors with respect to VA. Skill composition and shares were derived from survey data. Enterprise level surveys, KII and FGDs were also conducted.
Among the 9 sectors, currently, RMG sector has the highest share of GDP (11.3%) followed by construction sector (7.7%). The RMG sector also has the most share of employment (5.2%) followed by construction (3.7%). Agro-food and HTS come next with 2.5% and 1.6% of employment respectively.
Existing skill gap is the highest in the agro-food sector followed by the RMG Sector. Skill gap for “skilled workers” in the IT sector is also high (40%) as demand there is mainly for skilled and labour. Skilled workers and semi skilled workers are in short supply in virtually every sectors.
According to projected results, percentage increase in future labour demand is the highest in shipbuilding and agro-food. Future labour and skill demand is massive, both in absolute and in percentage terms in the RMG sector. Existing training situation grossly inadequate to meet such large needs. Training demand in RMG alone will be 1.5million in 2021 and 2.1million in 2026. RMG’s share of employment is more than double of all the other 8 sectors combined. Projected total training needed for these 9 sectors in 2021is over 4million. Projected total training needed for these 9 sectors in 2025 is over 5.6 million.
Given the above scenario, the policy makers need to enhance capacity utilization of existing training capacity, make such training relevant, explore expansion of training for specific industries with tie-ups with technical colleges and universities, encourage the provate sector, especially chamber bodies to come up with ambitious training programs, as well as undertake capacity expansion in the public sector. Since a large part of training is ‘on the job’ innovative approaches need to be explored to make such training more effective.