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Presentation of the results for the labor market analysis in the digital / fashion and jewelry sectors

January 25, 2019
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Presentation of the results for the labor market analysis in the digital / fashion and jewelry sectors

Within the framework of the European Union-funded “Technical Assistance to Support the Promotion of Social Dialogue in Lebanon” project, the Ministry of Labor, in collaboration with its social partners, organized a session to present the results of the labor market analysis in the digital / fashion and jewelry sectors at Hotel Riviera-Beirut, in the presence of Mr. George Ida, Director General of the Ministry of Labor, Mr. Jean Abi Fadel, Director General of the National Employment Office, representatives of the Ministry of Labor, the National Employment Office, the General Confederation of Lebanese Workers, and representatives of the tripartite social partners.

Joumana Brihi, project expert, presented the results that support the Ministry of Labor and the National Employment Office in establishing close links within the above-mentioned sectors to enable companies to track and employ skilled labor, and to facilitate opportunities for job seekers.

 

The Digital Sector

 

Sector Overview and Background

The study revealed that the digital sector in Lebanon offers a myriad of opportunities for the Lebanese economy. The potential for development in this field is enormous partly because digital products and services can grow beyond Lebanon to scale in international markets, and more importantly because digital is the future of everything. Moreover, growth in this field can overcome the economic slowdown that is currently being experienced in Lebanon because of its cross-cutting nature. Digital applications exist throughout almost all sectors of the economy, and ‘digital skills’ are therefore transferrable across sectors and highly valuable to both employees and employers.

According to the UK Tech hub, if well-regulated and incentivized, growth in the digital sector has the potential to create many jobs, increasing the current number of employees working in the sector by 15%, and adding a 5% expansion in the overall economy. This growth could increase Lebanon’s GDP by $7 billion in 2025 and create 25,000 new jobs by then.

 

Summary findings of a labor market analysis about the digital sector

Surveys were conducted with 149 businesses in the digital sector – of which 37 were Micro enterprises, 69 were Small enterprises, and 43 were Medium and Large enterprises.

Moreover, six focus groups were carried out with employees and potential employees in the sector, including three groups with women and three groups with men.

 

The results came as follows:

  • Micro and small businesses had a higher percentage of skilled employees than large businesses. Large businesses working in Information Technology needed more manual laborers for installation, maintenance, and reparation of systems. In this sector, the leading type of recruitment is Word of mouth and Social Media seems to resonate well with young graduates searching for a job.
  • The number of male employees in the digital sector by far surpasses that of women employees. Moreover, this sector is supposed to be youth-oriented, as much as 23% of businesses did not employ any youth member in their company.
  • Many companies are outsourcing some tasks to foreigners living abroad. As all work is digitalized in this sector, outsourcing is a much more affordable solution in many instances. Countries like India and Pakistan are known for being a major destination to outsource digital development and coding work.
  • Skills such as Software Development, IT Tech Support, and Web Development are highly needed by employers and require little previous experience. On the other hand, General life skills, such as Time Management, Teamwork Abilities, Communication, and Presentation skills, were identified as some of the widely missing skills that need to be developed.
  • With regards to job-specific technical skills, employers stated two types of skills which are lacking:
  • The first type is related to software development i.e. coding languages, operating systems, E-Learning software, etc.
  • The second type is related to Information Technology and CCE, namely installation of fibre optics, software installation, working on new machines etc. The same pattern of answers can be found throughout the Key Informant Interviews conducted.

 

Companies that participated in the survey show that between 2017 and 2018 they suffered a 59% decline in sales for small institutions, 48% for small companies and 33% for medium and large sized companies, but 16% of small institutions, 32% of small companies and 37% of medium and large companies saw growth in sales performance.

 

The Fashion and Jewelry Sector

 

Sector Overview and Performance

The Lebanese jewelry market is a big and competitive market estimated at a size of $600 million. It is divided into 3 subsectors: low-end, medium and high-end products. Companies within the industry do not share information or expertise openly, as a high level of secrecy controls the jewelry field.  It has been perceived that the main reason of the opacity in the field is to avoid tax payments.

Jewelry, particularly pearls, precious stones and metals are considered among the main exported commodities in Lebanon. In 2015, exports were pegged at $407.26 Million with a 15% share of the total Lebanese exports. Lebanese law does not impose taxes on the exported products; however the exported item is taxable by the destination country. The sector is not however immune to the current economic downturn, nor is the fashion sector.

Lebanon’s fashion retailing has long served the Arab tourism market which has been on a slippery slope since 2011. According to Blominvest, during the boom period of 2009-2012, Lebanon’s apparel market size grew by an average annual rate of 3.9%, indicating a promising retail sector. However, the current political stalemate and instability coupled with spillover effects from the Syrian crisis have weighed heavily on the tourism sector as well as on spending by Lebanese citizens. This has affected the growth of Lebanon’s apparel market.  The market has been contracting every year since 2013 by at least 4% to 5%, reaching closer to 20% decline in 2017.

 

Summary findings of a labor market analysis about the fashion and the jewelry sector

 

Surveys were conducted with a total of 35 jewelry businesses, and 106 Fashion businesses – 36 Micro businesses, 42 Small businesses, and 28 Medium and Large businesses.

Moreover, six focus groups were carried out with employees and potential employees in the sector, including three groups with women and three groups with youths.

 

The results came as follows:

  • The most in-demand position in the jewelry sector is the goldsmith and in the fashion sector, the tailor. Other required positions in fashion and jewelry are jewelry repair technicians, jewelry designers, knitting technicians, sewing machine operators, creative pattern cutters, and fashion designers. That said; there are very few to no job openings in these two sectors. And even for companies that do have openings, there were one or two jobs at most
  • When asked about skills gaps, some companies mentioned soft skills such as the lack of leadership, capacity to work independently, discipline, and creative thinking. For technical skills, the major issue was the need for a closer attention to details.  Employers are struggling to find talented and meticulous individuals who can guarantee a high-quality product. Other missing skills include casting gold, moulage fashion techniques, beading, knitting, tailoring, final retouching, technical speed and machine operating
  • In fashion, 37% of businesses said that they did not employ any women, and in jewelry, less than 7% of employees are females. The number of youths working in fashion and jewelry is also limited
  • When it comes to hiring foreigners, although most business owners indicated that they preferred to recruit Lebanese talent, discussions during focus groups suggest otherwise
  • Most businesses provide in-house training to their employees as they lacked the resources to outsource training or contract an external consultant
  • One key informant also stated that the most talented graduates and artisans are leaving the country, and seeking better opportunities abroad thus leaving the employment market undersupplied and generally of a lower quality
  • In the fashion sector, recruitment problems also included the lack of required skills, but also a general lack of applicants, lack of experience, and lack of skills, which means that the mismatch between labor supply and demand is staggering and that interest in this sector is receding. The lack of growth and future prospects coupled with low salaries has discouraged job seekers from considering employment in the sector
  • Similar concerns existed for the fashion sector, although young job seekers in this sector had more options in terms of education and training notably thanks to the renowned fashion design school ESMOD, more trainings and opportunities for internships which they were able to find in the market

Most respondents to the survey expect a very slight growth compared to previous years. Fashion businesses were less optimistic than jewelers, most likely because jewelry is considered as a luxury product that addresses a higher income group of consumers who are less vulnerable to poor economic conditions.  The weak economic situation is compounded by an increase in rent costs, labor costs and shortages in financial investments all of which were among the challenges mentioned by businesses. Other challenges included the absence of government’s support and unfavorable export laws.

 

About the project

This project is part of the broader European Union program “Promotion of Social Justice”.

The European Union supports social dialogue in Lebanon and believes it will create a mutual trust among the tripartite social partners and civil society to actively engage, inform and advocate for socio-economic change.

 

#EU4SocialJustice

www.socialjusticelebanon.eu

Facebook/Twitter: @socialjusticelb

 

For further information, please contact:

 

For technical information on the programme:

Gerhard Rettenbacher | +961 70 806 734 | gerhard.rettenbacher@gopa.de

For media inquiries:

Joumana Rizk | +961 (0)1 497 494 | joumana@mirrosme.com

 

 

 

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