Sri Lanka’s economy is facing a paradox that could constrain the country’s economic recovery, where the industries are still facing a critical skills shortage with around 400,000 job vacancies going unfilled, while unemployment persists, where industrial leaders struggle to find qualified workers, Minister of Industry and Entrepreneurship Development Sunil Hadunnetti said yesterday (20).
Speaking at a media briefing, Hadunnetti said: “There is a shortage of essential technical experts in the industrial sector in Sri Lanka, and finding service providers is a challenge. This has become a major issue today in the country to industrial growth. There are 400,000 job vacancies in our industries, yet unemployment persists, and there is a growing mismatch between the skills of available workers and the needs of industry, where vacancies are going unfilled. And the currently unemployed individuals lack the necessary qualifications for these jobs, despite stressing the concern.”
According to the Department of Census and Statistics (DCS) Labour Force Survey, the country’s unemployment rate stood at 3.7%, in Q1 2026, with a labour force participation rate of 49.2% in Q1 2026, compared to Q1 2025, which stood at 49.7%, showing a slower growth rate in the workforce participation.
“We need to consider how to address this need, but we are reluctant to simply bring in personnel from abroad, because the requirements within Sri Lanka must be met first. Contrary to our expectations, people who go abroad do not return at the same rate.”
He added: “We are currently in discussions with various institutions, including the vocational training sector and universities, to train the workforce to the industry requirements. We have told the training providers that we need them to design courses tailored to our specific requirements, rather than simply offering their standard programmes.”
“Therefore, our goal is to bridge this gap through training, to strengthen domestic productivity, and support industrial growth,” he further said.
Meanwhile, Finance Minister Prof Anil Jayantha said in the parliament yesterday (20), “With respect to the labour force, we are moving ahead with a traditional labour force promotion, increasing their competencies to match the global workforce. This does not mean the workforce is leaving the country, but we are placing our labour in strategically important places.”