Page 65 - CMA Journal (May-June 2025)

Pakistan’s Talent Gap:
Focus Section

A Barrier to Economic Growth

Author: Co-Author

Abbas Raza Varayla Maria Shahab
Honorary Secretary Member, Management
Al-Sadiq Institute of Committee,
Islamic Banking, Al-Sadiq Institute of Islamic
Finance and Takaful Banking, Finance & Takaful

A situation where the market supply of talent lags behind Concern Areas
market demand is referred to as talent scarcity or
shortage. It is a global issue and the most challenging 1) Industry and Academia Gap
problem for employers during hiring. There is a gap between academia and industry, and our
“Right person for the right job” academia is unaware of industrial requirements. Pakistan
produces approximately half a million graduates per year.
When we talk about Pakistan, one of the most The unemployment rate of fresh graduates is hovering
challenging obstacles is the chronic talent shortage, around 31%, and even higher among female graduates.
which is continuously hampering the country’s economic The education-to-employment pipeline reveals a critical
growth. It is not just that there are not any jobs available; gap (January 1, 2025, Business Recorder).
there are jobs, but there are not enough competent
individuals to fill them. Unfortunately, all sectors are It shows an extensive gulf between the requirements of
grappling with this issue. the industry and the available knowledge and skills at the
academic level. This gulf in the educational system is
That 2.7% GDP growth might not seem earth-shattering,
but given the complex economic pressures Pakistan has leaving graduates ill-prepared for industry; this, in turn,
been under—rising inflation, currency challenges, and causes a lag in innovation and research work in the
tough global conditions—it signals a bit of resilience. It is country. Let us take the case of IT. The Industry-Academia
like the economy is treading water—not exactly Skills Gap Report 2022 by P@SHA indicated that less than
sprinting ahead, but not sinking either. 10% of students are aware of the industry’s expectations,
which paints a picture of a serious misalignment
This kind of slow, steady uptick suggests the
government's policies may be stabilizing key sectors, but between academic curricula and the IT industry. The
probably not yet delivering the kind of transformation report suggested responsive efforts to minimize this
that many Pakistanis are hoping for. vacuum by fostering industry-academia collaboration.
This report was a wake-up call, because if students are
The growth rate is not good enough, considering we unaware of the industry’s needs, how can they be
have such a young population, with most people under expected to meet those expectations?
30 years old.
Pakistan faces a significant unemployment challenge at 2) Business Sustainable Growth
6.3 percent, particularly impacting the youth aged 15–35, One of the key drivers in business growth is skilled
according to Budget 2025–26. Pakistan stands as the 6th
largest workforce globally, with a considerable domestic professionals, who significantly affect the performance of
labor force of 71.8 million. – June 11, 2025, DAWN businesses. If they are not available, businesses will not
be able to take full advantage of opportunities. As
Unemployment continues to be a multifaceted problem, business expands, the demand for talent increases.
and the rate of joblessness among youth is especially Skilled human resources are the real contributors who
concerning, with 44.9% of job seekers aged 15 to 24. The drive growth, innovation, improve effectiveness, and
unemployment rate for females significantly surpasses enhance the productivity of any business.
that of males, according to the budget document.
ICMA’s Chartered Management Accountant, May-June 2025 63