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How to Grow Employment in PNG?

Joint report between Deloitte and the United Nations has been released, indicating the impediments to growing employment in Papua New Guinea.

The findings of this report were derived from a survey of businesses in targeted centres around the country.

The issue of skill shortages is well known. But what is not as well-known are the specific skills that the business community needs in order to grow their business. This survey is about filling that information gap which ultimately will benefit policy makers and the business community alike.

The purpose of this survey was to give a thought leadership paper presenting skills needs and barriers to hiring by sector and location.

With over 85% of the population working in the informal sector increasing employment and lowering employment costs to business is a fundamental driver of inclusive economic growth.

This was conducted via a survey of business’ skill needs and barriers to hiring. The full findings and report of the survey is planned to be released in early 2017.

Emerging findings

Skills shortages occur throughout PNG, and are particularly present outside of major population centres. Behind general economic conditions, skills shortages are the single biggest factor that impedes hiring.

Regional disparities continue to widen between Port Moresby and the rest of the country.

Women remain under-represented – over 60% of firms have reported that less than half their staff are female. “Ability” and “Willingness” to work are two sides of the same coin – ‘abled’ workers need also to be ‘willing’ workers. 60% of firms surveyed do not expect their headcount to increase over the next 12 months.

Skill factors and human factors affect hiring:

  • 80% say skills shortages are impeding hiring.
  • 70% say human factors (poor staff productivity and attendance) affect the hiring decision.
  • Addressing skills shortages and human factors will go a long way to growing employment.

Over 230 responses received

Three key elements to the survey:

  • Hiring intentions – which businesses are hiring, in which industry and where?
  • Hiring barriers – which factors prevent businesses from hiring, and to what extent?
  • Hiring needs – which skills do businesses have the most difficulty in recruiting?

Overview of survey diagnostics

Location of respondents’ Head Quarters:

  • 156 from Port Moresby,
  • 42 from Lae and Madang; and
  • 32 from other locations

Industry of respondents’ main operations:

  • 92 white collar
  • 80 blue collar, and
  • 56 wholesale, hospitality and retail

A tale of two economies

Port Moresby and white collar respondents show strongest growth potential. Statistics show 55% of POM businesses are currently hiring; compared with only 36% of businesses in Lae and Madang currently hiring; 60% of white collar businesses hiring; 42% of blue collar businesses hiring and; 50% of hospitability, wholesale and retail businesses hiring.

But skill shortages are felt all over PNG. Skill shortages bite throughout the country but this is far more severe outside of major population centres. 49% of businesses in POM say skills shortages impede hiring to a large extent; 66% in Lae and Madang; 70% elsewhere.

The economy, skills shortages and cost factors are the three largest impediments to growing employment:

  • 90% of respondents say the economy impedes hiring;
  • 80% of respondents say skills shortages impedes hiring; and
  • 70% say human factors (poor staff productivity and attendance) impedes hiring

Addressing skills shortages and human factors will go a long way to growing employment in both industries.

Skills shortages particularly impeded employment growth outside of main population centres.

Regional disparities are widening between Port Moresby and the rest of the country. Employers outside of Port Moresby, Lae and Madang find skills shortages the largest impediment to employment growth, more so than the economy with over 90% of respondents saying skills shortages impedes hiring.

Human factors (poor staff productivity and attendance) are more of an impediment to growing employment than cost factors in locations, including Port Moresby

Next Steps

Analyse further the specific skills needs of businesses; Compare and contrast results with other research publications; Explore possible solutions to skills needs and growing employment based on experiences within PNG and from the rest of the world.

An in-depth analysis of the survey is expected to be released in 2017.

© 2016 Deloitte Touche Tohmatsu

 

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