Pandemic related economic restrictions sparked wave of resignations, retirements: CB survey

• Official unemployment rate rises to 5.7% end of first quarter, from 5.2% at the end of  2020 fourth quarter
• Labour force participation rate shrinks to 50.1 % in 1Q21 from 51.0 % a year ago

Restrictions imposed on economic activities, primarily the once which require close proximity to people in the services industry, have sparked a wave of voluntary resignations and retirements as prolonged closures of the businesses cut into employee salaries and incomes while making some redundant, according to a Central Bank survey. 

As Sri Lanka gets ready to lift its nearly six-week-long lockdown on October 1, the fourth round since the pandemic hit the country in March last year, a large pool of people exposed to industries and businesses which are highly susceptible to virus related restrictions would have gone out of business, lost their jobs and livelihoods plunging many millions into poverty and despair. 

Though the country may gradually emerge out of the pandemic, the economic and social scars it left could last longer than the pandemic itself and would demand years of government policy support in restoring jobs and incomes. 

“Employment continued to fall at a higher pace as retirements and voluntary resignations exceeded the number of recruitments carried out during the month,” said a survey carried out through August.

Sri Lanka’s official unemployment rate rose to 5.7 percent by the end of the first quarter, rising  from 5.2 percent at the end of fourth quarter in 2020. This could be a forerunner for worse conditions in unemployment in the subsequent period. 

Further the labour force participation rate, the ratio of the labour force to the working age population shrank to 50.1 percent in the 1Q21 from 51.0 percent a year ago. 

The development added to woes of some of the labour intensive businesses in the services industry, which are getting ready to fully re-open safely with the current vaccine rollout as they have lost some of their key people during the time they remained closed. They expressed worries as to whether they could meet the pent-up traffic due to the shortage of skilled employees.   For instance the hospitality industry a few months ago revealed this phenomenon as their key staff , such as chefs, were leaving overseas in search of jobs.