Sri Lanka’s key human capital challenges and opportunities

Wednesday, 23 November 2016 00:00 -     - {{hitsCtrl.values.hits}}


Prime Minister Ranil Wickremesinghe addressing the Human Capital Summit 2016




A consolidated glimpse of outcomes of the Sri Lanka Human Capital Summit 2016


Sri Lanka has recorded a very high economic growth rates compared to other countries in South Asia, yet the country's per capita income is relatively low. Sri Lanka needs to now focus on being an efficiency-driven economy. The country's higher education and training standards will be critical in driving this transformation. 

The four sectors that will fuel the economic growth for Sri Lanka are Manufacturing and Construction, Tourism and Hospitality, Services and Foreign Employment. The sectors under review are critical for their contribution to employment given the transformation that is taking place in the economy.

The report highlights the business and human capital challenges and opportunities in the identified sectors.


Tourism and Hospitality Sector

Tourism has emerged as the fastest growing sector with an average annual economic growth rate of 25-30% over the last three years. Sri Lanka has been leveraging its rich tradition, heritage and exotic locations to position itself as one of the top travel destinations globally. 

The sector engages in labour intensive activities and hence increase in number of tourists will result in increase in employment directly in the hospitality sector as well as its allies such as travel, food and beverage and entertainment. 

Attracting and retaining people seems to be a predominant challenge for Sri Lanka in the tourism sector. A large population of the skilled workforce in Sri Lanka has migrated to Mauritius and Middle East. Despite over 40% of women being educated, only 5% of them enter the workforce. 


Way forward

  • Relook at the existing visa application process and align the same to support mobility of tourists from key destinations
  • Institutionalise trainings that focus on inter personal skills and soft skills for the students and existing staff members
  • Develop well-defined career paths that helps engage and retain the employees
  • Develop an integrated approach to promote tourism by branding Sri Lanka and its core attributes in all export products and services


Services Sector

A) ICT/BPM, Financial Services and Insurance Sector

The services sector (ICT/BPM, Financial Services and Insurance) has been facing constant changes with development in technology and innovation. The global investments in disruptive technology amounts to $, 20 billion; this could potentially result in impacting the existing business models and transform the nature of jobs that is currently being performed. 

It is estimated that over 40% of outsourced services will either get automated or redundant by 2018 and almost 100% of IT roles that currently exist will undergo a transformation. To remain competitive in the industry Sri Lanka must have a focused strategy to embrace the change in technology and building capabilities for the future.


Way forward

  • Build capabilities by understanding the larger demands of the industry
  • Enhance investment in higher education
  • Move to data based solutions for smarter and efficient business solutions
  • Embrace opportunities to move up the value chain in the technology continuum by investing in digital technology
  • Develop an innovative training infrastructure for new age learning methodologies like experiential learning, simulations etc.


B) Logistics and Maritime Sector

Sri Lanka has a strategic advantage to become a top five global logistics hub. The country can become a gateway to open up trade activities between Singapore and Middle East. In order to become globally competitive in the logistics space Sri Lanka must have a well-articulated national vision for logistics and maritime operations. 


Way forward

  • Developing clear and transparent maritime policies
  • Design fair wage structure to attract and retain employees
  • Collaborate with global organisations and embrace best practices
  • Create an environment that encourages diversity and inclusivity

Manufacturing and Construction Sector

Construction industry has a huge shortfall of both skilled and unskilled labour. There is a very low level of investment in skill building within the construction sector. Sri Lanka has significant potential for growth in the manufacturing space. Investment in technology is critical for future development of the manufacturing industry. The manufacturing strategy of the country must align with the larger goals and objectives of the nation

Way forward

  • Create a skill blue print that is contextualised to the country's agenda
  • Focus on moving up the value chain in manufacturing by capability development
  • Bring in clarity on the core focus areas within manufacturing
  • Organisations and government need to collaborate effectively in skill building activities



Foreign Employment Sector

Sri Lanka has a significant population of workforce that is migrating to Middle East and Mauritius. Skill development must align with the larger demands of the target regions. Sri Lankan Government currently has the capacity to train up to 75,000 people through vocational training centres the challenge lies in ensuring the effectiveness of the programs 


Way forward

  • Increase involvement of diaspora in creating foreign employment
  • Relook at the migration policies and strengthen governance around the same
  • Identify higher value jobs that are of demand in the international markets and create capabilities for the same
  • Enhance safety and security norms of the migrating workforce



The Human Capital Summit – 2016 served as a platform for a dialogue between industry experts and global thought leaders. The conference also served as a platform to identify solutions to bridge the skill gaps which would enable Sri Lanka build a future ready workforce.

During the sessions the speakers suggested several initiatives the industry leaders and Sri Lankan Government can undertake towards maximising job opportunities in the identified sectors. Following are a few critical pointers that were highlighted from the session.

The speakers emphasised the need to create a formal forum comprising corporate organisations, Government representatives and academia to provide guidance and support in developing the skills for the future. The need to institutionalise the forum and articulate clear roles and responsibilities for the forum was also discussed.

  • A very common issue that was stated across industry pillars is the lack of training in soft skills that will help in immediate employment. A large section of educated population in Sri Lanka is unemployable due to lack of training in work specific skills. There is a dire need to build communication and soft skills in the workforce. It is also critical to increase the education standards of schools and colleges to help in producing talent that are globally competent. A key theme that was discussed was on the evaluation mechanism of trainings provided through vocational institutions. It was emphasised that the success of these institutions should be determined by the quality of education and not by the quantity of students graduating.
  • The speakers argued the importance of focusing on gender diversity and the importance of attracting women employees into the workforce. There is a need to provide a healthy and an accommodating ecosystem to retain and motivate women. Few best in class organisations also have flexible policies to empower women. There is also a need to the strengthen governance mechanisms and increase transparency in managing compensation of the workforce in industries like construction and logistics.
  • The importance of investment in best in class technology and innovation across all sectors was discussed. Sri Lanka today needs to develop a focused strategy and must have a clear vision for developing capabilities in technology. 
  • The panel also deliberated the importance of reinforcing the core values and culture of the country in all sectors. Sri Lanka needs to leverage its core values in creating a competitive advantage. 

The outcome of the summit will enable the Government to create clear implementable action plans and initiate policy changes with a view to create one million jobs by 2020.