Labour shortage could cripple exports, warns chamber

• National Chamber of Exporters says the issue has industry-wide implications
• Construction sector already negotiating to bring labour from abroad
• Three-wheeler economy, migration and fast ageing population cited as reasons

The shortage of labour— skilled or unskilled—is cited as the number one limiting factor faced by Sri Lanka’s export-oriented manufacturers, when they met the press at a recently held media round table and this issue has forced many of the manufacturers to operate with sizable spare capacity.  

According to the National Chamber of Exporters of Sri Lanka (NCE), the apex private sector body representing the exporter community, the skill dearth is so acute here that it is having industry-wide implications. 

Sri Lanka’s construction sector has been the worst affected by the limited availability of labour when the economy started rebuilding its roads, bridges, factories and hotels across the country after the war ended. 

NCE President Ramal Jasinghe said the construction sector is negotiating to bring labour from abroad because the sector is reeling from acute labour shortage for years. 

“We hear the construction sector is negotiating to import labour”, said Jasinghe.

According to the existing law, foreign labour cannot be imported except for in the case of several specific sectors, where specialized talent cannot be found in Sri Lanka such as ship builders or unless a firm is a Board of Investment registered entity.     

But the shortage of labour is now being experienced by many other industries such as shoe manufacturing, toy manufacturing, textile and garments, plantations and spices and allied products. “We have cinnamon exporters in our membership and they complain that they could not find cinnamon peelers anymore”, NCE Secretary General/CEO Siham Marikar said.

Ceylon Cinnamon is identified as the world’s best and has high demand from many countries and fetches higher prices.

Jasinghe opined that Sri Lanka’s actual unemployment level has to be probably below the reported level of 4.2 percent.  An unemployment level of around 4.0 percent is often cited as near full employment level in an economy.  The so-called three wheeler economy, migration and fast ageing population are often cited as the reasons for the present day labour woes faced by Sri Lankan enterprises. 

However, Jasinghe said one cannot expect a person to abandon his three-wheeler for an employment in an organization before a concrete strategy is formulated for skills development from the very beginning. 

For that he stressed national policies on education and vocational training must be in place.  Meanwhile NCE Vice President Ravi Jayawardena, who is a leading toy exporter in the country, said that he is currently operating with 2/3 of the capacity because he could not find people to run the spare capacity in his factory in Gampaha. 

His company, Golden Palm Crafts (Pvt) Limited, specializes in manufacturing wooden toys for some of the leading European retailers under their brands for little over three decades. 

Jayawardena, a former corporate executive turned entrepreneur, said the majority who he interviews say that they cannot work without a computer.  “This shows that our people don’t anymore want to make their hands dirty. They want to work inside an air conditioned cubicle with a lap top on their table,” he said.  The NCE is currently engaging with the relevant government authorities in finding a durable solution for the skills gap in the country, which could even paralyze the manufacturing sector. 

When economies develop, people become more aspirational and they tend to prefer more white-collar jobs to blue collar ones. 

Developed and emerging economies have tried to address this issue of deploying more robotic technology to do the bulk the production on factory floors.