Skills gaps behind poor productivity in key sectors, BIDS studies find

Illustration: TBS

Several studies conducted by the Bangladesh Institute of Development Studies (BIDS) have revealed a substantial gap in the skill sets of workers in labour-incentive industries such as readymade garments (RMG), light engineering and electronics, leather and footwear, and agro-food processing. 

The research, conducted between 2021 and 2022 under the government's Skills for Employment Investment Programme (Seip), indicates skill gaps and mismatches ranging from 45% to 70% in these sectors.

The studies highlight that these skill gaps result in low productivity in factories and the hiring of foreign workers at managerial levels, leading to a loss of foreign currency. 

For example, a study focused on the RMG sector found that 6.5% of woven industries and 2.99% of knit industries expressed the need to hire skilled foreign workers to address the skill gap, particularly at the managerial level. 

Sanwar Jahan Bhuiyan, deputy executive project director of Seip, said, "It is said that around 50,000 foreigners are currently working in Bangladesh due to the lack of skilled leadership in managerial positions, resulting in an annual loss of $5-6 billion. But the actual numbers will be much higher."

While addressing a session titled "Skill and labour market outcomes" on the last day of the two-day "BIDS Research Almanac 2023" on Thursday at a city hotel, he also said the government wants effective collaboration between industry and academia to create skilled manpower, adding, "We are continuing the programme in four universities to develop mid-level executives. But this requires a huge investment."

Another study focused on the light engineering and electronics sector revealed that approximately three-fourths of workers face a mismatch between their field of study and their job. 

And the under-education is more severe in the sectors by 60% mismatch, says the study. This means that the degree to which workers' education levels are below matches those required for their current jobs.

The study conducted among 123 light engineering firms and 100 electronics firms said that if the workers' level of education is below the desired level by the employers, it is negatively associated with the output per worker of the firms. 

Subhasish Barua, associate professor of development studies at Dhaka University, said, "Workers in developed countries are more productive than in developing countries as skill matters. In respect of Bangladesh, a lack of nutrition from childhood affects cognitive and skills development in the long run." 

"The salaries are not good enough to keep them working in the long term. And they do not live in a household environment which is very much conducive for them to generate a large amount of energy in the workplace," he added.  

He said that the government should not only create large-scale housing infrastructure for the factory workers as well as creating health insurance and free health services for all the workers so that they take this job as a long-term occupation.

RMG industry struggles with 48% to 69% skill gaps

According to employers' assessments, the knitting industry currently faces a skill gap of 68.79%, whereas the woven industry has a slightly lower gap of 47.83%.

A total of 476 workers from 119 enterprises were interviewed, and their skill gaps were evaluated by employers based on their proficiency levels.

Among the different categories of workers, helpers, most sewing machine operators, quality inspectors, and some finishing operators in the knitting industry exhibit a higher skill gap compared to others.

On the other hand, management employees, quality controllers, and some finishing operators contribute to a larger share of the overall skill gap among employees in the woven industry.

Increasing training activities key to minimising skill gaps in agro-food processing sector

According to another study, the agro-food processing sector is facing a 47% skill gap, primarily due to the lack of specialised training and knowledge in food safety, sanitation, and food testing procedures. 

The study also highlights the inadequate skills acquired through educational degrees as a contributing factor to this gap.

Enterprises in the sector have emphasised that increasing training activities is the primary solution to minimise these gaps.