Pakistan needs to create more jobs: WB

Published in Dawn, November 22nd, 2019

ISLAMABAD: The country’s economy needs to create more jobs by taking advantage of the large influx of a well-educated young labour force, says a new research by the World Bank.

The ‘Labour Market Analysis’ using data from a Pakistani online job portal finds that although there is an excess supply of highly educated workers, certain industries, such as information and communications technology (ICT), lack workers who have specialised skills and experience.

One of the key findings is that there are insufficient jobs where bachelor and graduate degree holders are expected to use their acquired skills. The labour market tightness at the post-secondary level is low.

Because a new batch of fresh graduates enter the market every year, there is more competition for entry-level jobs than for professional roles focusing on mid-career experience.

The analysis also finds that the exact match of qualifications and skills is important for employers. Job applicants who are under- or over-qualified for posts are less likely to be shortlisted than those whose qualifications exactly match the requirements.

Employment is a key challenge in Pakistan and while unemployment rate is low at six per cent, the quality of employment is not high.

Among the employed people, three quarters work in informal sectors; 36pc and 24pc are self-employed and family workers, respectively; and only 12pc are wage workers within a written contract.

The online job portal reviewed represents a high-skill segment of the labour market in the country. Postings on the platform offer higher salaries than the national average, and job seekers are younger and better educated than the mean labour force.

The analysis of shortlisting shows that matching between applicant qualifications and job requirements is important and that over-qualification does not necessarily lead to any advantages.

The wage offers in terms of both initial package and growth trajectory show that ICT is one of the most attractive sectors for graduates. Programming-related skills are demanded not only in this sector, but also in all others as well.

Regarding the business size in terms of the number of employees, majority are micro (48pc) and small businesses (34pc).

This proportion of micro enterprises is higher than the entire non-agricultural industries in Pakistan.

The percentage of the businesses that started operations less than five years ago is 50pc but only 11pc in the entire non-agricultural industries.

By industry, ICT is the largest in terms of the number of employers at 23pc and postings at four jobs on average by each. Administrative, social, and personal services come in second at 15pc and four listings, followed by professional, scientific, and technical services at 14pc and three jobs, manufacturing 12pc and three jobs, and wholesale, retail, hotel, and restaurant at 11pc and two postings.

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