Skills development, labour market demand: ILO urges Pakistan to strengthen connection

ISLAMABAD: The International Labour Organization (ILO) has urged Pakistan to strengthen the connection between skills development and labour market demand to cope with the present market dynamics.

At an event titled “Skills for a Shared Future” jointly organized by the ILO, the Punjab Skills Development Fund (PSDF) and the British Council, Geir Tonstol, ILO country director stressed that Pakistan needs a new skills agenda to turn its youth potential into decent work.

He further said the country should equip young people for a world of work increasingly shaped by digitalization, artificial intelligence, climate change and demographic change, he emphasized.

“Geir Tonstol Pakistan needs a training ecosystem that keeps pace with industry, supports innovation and prepares young people for jobs that are emerging today, not yesterday. Strengthening collaboration between government, industry and development partners is essential to ensure that skills investments translate into higher employability, greater productivity and stronger economic growth.”

The call comes as 28.4 per cent of young people remain outside employment, education or training. The scale of the challenge is significant. Pakistan has an estimated 46.3 million young people between the ages of 15 and 24. According to the Pakistan Labour Force Survey 2024–25, 20.6 million are participating in the labour force, while 2.6 million are unemployed. The youth unemployment rate stands at 12.8 per cent—almost twice the overall unemployment rate of 7.1 per cent. While the share of young people outside employment, education or training has fallen from 32.5 per cent in 2020–21, more than one in four young people remain disconnected from the pathways that can help them build skills, find employment and contribute to the economy.

The Labour Force Survey estimates that 4.9 million young people aged 15–24 have received technical or vocational training, comprising 3 million young men and 1.9 million young women. The figures highlight both the reach of existing training efforts and the need to expand access—particularly for young women—and ensure that training translates into sustainable employment.

The discussion focused on practical reforms to create a more inclusive, demand-driven and future-ready technical and vocational education and training system. Participants emphasized the need for stronger collaboration between training providers and industry, better use of labour-market information and closer alignment between skills investments and sectors with the potential to generate productive employment.

Ahmed Khan, Chief Executive Officer (CEO) of the Punjab Skills Development Fund speaking on the occasion said that skills development must respond not only to AI, digitalization and the green transition, but also to the structural constraints that affect enterprises and workers alike. Productivity, innovation and decent work must be at the centre of the national skills agenda. When productivity rises, enterprises become more competitive, workers can earn better wages and economies grow more sustainably, he added.

Ben Lawton, Deputy Director, British Council, Pakistan, said, “The British Council is committed to supporting young people with the skills and confidence they need to succeed in an evolving global landscape. By combining essential human skills such as communication, creativity and critical thinking with digital and green competencies, we can help create pathways to employment, innovation and lifelong learning for Pakistan’s youth.”

The roundtable further called for greater investment in lifelong learning, enabling workers to update their skills throughout their careers as technologies and labour-market needs evolve. Participants discussed a national skills passport as a potential mechanism to recognize workers’ existing competencies and improve mobility between employers, sectors and countries.

On the sidelines of the event, PSDF and the ILO signed a Memorandum of Understanding to strengthen cooperation on skills development, labour-market research, institutional capacity-building and policy dialogue.

The partnership will support joint efforts to promote future-ready skills, strengthen school-to-work transitions and advance decent-work opportunities for women and men in Punjab.

Copyright Business Recorder, 2026