Tackle worker deficit now, foster growth


Yongyuth Chalamwong

We Thais are fun loving yet hard working even in the industrial sector – the country’s current highest growth achiever among all economic sectors. We have been performing relatively well since the 1960s and became regarded as a newly industrialised country in the mid-80s.

As a newly industrialised nation, we are planning to serve beyond our own borders in the Asean Economic Community (AEC). But before any further implementation, let’s take a closer look at where we are.

Our five key industries are food, clothing, motor vehicles and parts, electrical and electronics, and machinery. Out of these, the motor vehicles and parts industry is expected to grow the most between now and 2022, at 11.6% each year. The electrical and electronics sector is predicted to expand 8.4% in that time, while machinery will gain 7.5%. Food will grow by 2.6%, followed by clothing, predicted to expand 0.7% annually.

The growth figures sound good but require sufficient labour.

Studies have shown that demand for labour for the motor and parts industry will increase 10% each year until 2022, requiring no less than 600,000 workers.

And that demand will spill over to the electrical and electronics industry as new generations of cars and vehicles are equipped with digital controls and gadgets, leading to a 1.7% increase in workforce needs annually, or 500,000 labourers.

Due to the expansion of production, and damage caused by the 2011 floods, the machinery industry will also demand a 0.6% increase in staff, or 170,000 workers.

The food industry, the sector currently hiring the most employees, will still be the country’s main industry 10 years from now, due to Thailand’s abundance of natural resources and capacity to serve as the “Kitchen of the World”. Demand for staff will increase at 2.7% each year, equating to 1.5 million workers.

The clothing industry, on the other hand, will demand fewer staff. Labour in China and Vietnam is less costly and easier to find. Demand for employees is set to decrease by 2% each year, or 800,000 labourers. So, the clothing industry aside, how do we balance supply and demand for labour?

Across all levels in businesses, workers who are educated, trained and skilled are now preferred.

Staff with high-school degrees are especially sought after, because employers know they are educated to a certain level and can be flexible enough to start in a junior post and progress to become managers, mechanics or technicians. The hiring rate for this group is expected to increase no less than 6% each year.

Young people who have been educated at vocational training schools are also in demand, since new industrial technology requires specialist knowledge and skills.

However, this group of potential employees is relatively small, because students tend to further their studies for higher pay. Despite this, better levels of pay and government support for this group means the hiring rate will rise 4% each year for workers with a vocational certificate and 5% annually for those with a higher vocational certificate.

For those with a bachelor’s degree, demand promises to increase consistently in the long term, as technology and new models of businesses require workers with higher education. The group is also willing to compromise on position and income level at the start. The hiring rate for these graduates is expected to increase by 4.8% each year.

The most critical issue is that key Thai industries are desperately in need of technicians and mechanics.

We could move ahead, regardless of the obstacles, but wouldn’t it be more efficient if we could first address the balance between supply and demand for labour to enable stronger growth?

What if we treat the whole system of the industry sector more professionally? What about sufficient education and training for both students and teachers to lower the competency gap? How about on-the-job training to increase the efficiency and productivity of each worker? And adjusting remuneration packages and fringe benefits to give workers a higher quality of life?

The PDCA working process – plan, do, check, act – can make sure that all steps are taken and scrutinised to produce better results. Perhaps, a network among the industries in Thailand and our alliances abroad could support, share and replace workers as necessary – locally or internationally?

Unless we take action to maintain the right balance, we might not achieve that promised growth.


Yongyuth Chalamwong, PhD, is research director at the Thailand Development Research Institute (TDRI). Policy analyses from the TDRI appear in the Bangkok Post on alternate Wednesdays.

First published: Bangkok Post, May 7, 2014