Thursday, April 26, 2012

Demand-supply gap in labour market hits enterprises

Over 1,000 Nepali youth leave the country everyday in search of greener pastures and local enterprises are finding it difficult to hire skilled and semi-skilled manpower to expand their businesses.
"There is a rising demand for both low and medium skilled workers in the market but medium and micro enterprises have failed to attract the youth due to low salaries — less than Rs 6,000 — and also due to its seasonal nature," according to 'Labour Market Demand and Supply Survey 2012' conducted in three districts –– Ramechhap, Dolakha and Dang.
"The number of youth wanting to join jobs after completing their training is increasing in recent days," it said, adding that a very few –– around 12 per cent –– enter the job market after the training but over 50 per cent want to take additional training. "Around 75 per cent of the interviewees did not have any idea about who provides training at the local level."
However, the survey stated that over one million people have benefitted from the vocational training conducted outside the formal education system.
Around 50 per cent of micro enterprises said that they could not get skilled manpower and over 35 per cent said they could not find local employees.
"There is a gap between employers and unemployed youths," said Chudamani Bhattarai of the Federation of Nepal Cottage and Small Industries. "Lack of information on labour demand and supply, counselling and placement system has a negative impact," he said, adding that service-based enterprises have low demand for employment but production-based enterprises have a huge demand and they are facing problems like quality control and market networking.
The economy is afloat due to remittance sent by the youth from the Gulf and Malaysia but the economic crisis in those labour markets — like in 2008 — could hit the economy hard as the country is currently receiving remittance which is almost equal to the budget.
In the first eight months of the current fiscal year, the country received remittance worth Rs 225 billion. If the current growth continues, the country will receive remittance almost equal to its budget that stands at Rs 384.90 billion for the current fiscal year.
Lack of employment generation back home and remittance-fuelled consumption is not only hurting enterprises but also the overall economy that is plagued by the 'Dutch syndrome' and "the only way out is to create jobs for the 300,000 youth who enter the job market every year," said chief executive of Rural Microfinance Development Centre Shanker Man Singh.
"The country should promote microfinance to reach out to the poorest of the poor and generate employment at the local level and save the economy. Access to finance will help them lift their living standard," he said, adding that the centre is ready to pour in more resources to generate employment.
However, the survey revealed that over 50 per cent of the households spent their loans on consumption and very less was used to start or expand businesses. "And agriculture is still the major source of income for over 60 per cent of the households," it added.
The survey was conducted among youth aged between 15 and 40 by the Federation of Nepal Cottage and Small Industries (FNCSI) in collaboration with PlaNet Finance under the Yuwaccess Project.


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