Can Bangladesh exploit its under-utilised workforce?

Forhad Hossain has been looking for a permanent job since earning his master's in management degree from Abdullah Al Mahmud Degree College in Sirajganj in 2019.

Although he manages his expenses based on the income generated from providing private tuition, he considers himself unemployed.

But according to the Labour Force Survey 2022 of the Bangladesh Bureau of Statistics (BBS), he is not unemployed. Rather, he is employed and known as under-utilised workforce.

A person is to be considered unemployed if he or she did not work at all during the previous week (not even for an hour) or was temporarily absent from work.

Raihan Uddin, who recently graduated from Chittagong University, is another example. He works on a part-time basis for an online portal in the port city. He works for four hours a day, five days a week.

Like Hossain and Uddin, around 68 lakh people in Bangladesh were under-utilised in 2022 since the country could not use them fruitfully despite their potential.

Labour under-utilised is a type of mismatch between supply and demand and is seen when individuals engaged in the labour market are not satisfied with the work they do.

Alarmingly, around 41 lakh youths aged 15 to 29 were under-utilised in 2022. Of them, 74 percent were living in rural areas, according to the Labour Force Survey 2022.

The workforce comprises 40 lakh males and 27.6 lakh females in both rural and urban areas.

Prof Selim Raihan, executive director at the South Asian Network on Economic Modeling, said Bangladesh is yet to exploit its labour force properly as it could not provide the right kind of education and training and make it productive.

"As a result, we still have a huge number of under-utilised workforce."

Along with unemployment, there are two more components consisting of the under-utilised workforce: time-related underemployment and potential labour force.

The time-related underemployment is when a person works less than 40 hours a week and this type of employment is insufficient in relation to an alternative situation in which they are willing and available to engage.

A potential labour force refers to persons not in employment and the existing conditions limit their active job search and/or their availability although they have expressed an interest in this form of work, according to the BBS.

The number of under-utilised workers has risen over the years. For example, around 2 lakh people have remained under-utilised in the last five years.

"The number of under-utilised workforce may not be apparently alarming," said Rushidan Islam Rahman, executive chairperson of the Centre for Development and Employment Research.

"But one has to keep in mind that this is a gross underestimation because the BBS uses a very restrictive definition of the concept. Moreover, the number has increased significantly among the male labour force."

The former research director of the Bangladesh Institute of Development Studies, however, said there is a lack of sufficient hours of work due to low productivity of the activities where they are engaged or employed on a casual or daily basis.

"This is a matter of concern."

Low productivity, inadequate hours of work and low wage in casual employment may push this group and their families into poverty, Rushidan warned.

Sayema Haque Bidisha, a professor of economics at the University of Dhaka, thinks a slow job creation is one of the major reasons for the situation.

"Besides, there is a major gap in expectations between recruiters and candidates."

She pointed out that the academic system does not equip students with practical knowledge and skills. "So, recruiters don't get skilled employees."

On the other hand, a huge number of educated workers could not enter the job market owing to a mismatch in expectations like low profile jobs or they do not want to move to rural areas, Prof Bidisha said.

She blamed the lack of proper platforms aimed at narrowing the gap between job-seekers and recruiters.

"One of the challenges of the labour market is the absence of a strong linkage between supply and demand, primarily between the academia and the industry."

"It hampers knowledge acquisition and affects the efficiency of the production process. This affects GDP, results in skill wastage, and creates unemployment."

Bidisha thinks employability of youths is crucial as the country is going through a demographic transition and the window of demographic dividend will close around 2040.

Prof Raihan said Bangladesh could not generate productive employment in its various sectors, especially the informal sector, as there has not been enough technological advancement.

"Though the number shows to be very high, their productivity seems low. As a result, people are compelled to work with lower wages."

Currently, Bangladesh is enjoying a demographic dividend on the back of a huge number of working-age people. But the benefit will not long last since it has not prepared the labour force properly, he added.