**Table 15: Impact of Enforcing USD 85 MW on formal enterprises by Urban Area** <u>(% of firms)</u>

||No Impact|Continue to operate but not<br>consider future hiring|Reduce<br>employees|Cease to operate|
|---|---|---|---|---|
|Maliana el. Bobonora|52.5|35|7.5|5|
|Baucau|46.4|40|5.5|8.2|
|Dili|69.1|24.9|4.4|1.6|

Source: UES, 2004

# **_(iv) Training and Skills in the Urban Labor Market_**

57. Skills gaps among workers in Timor-Leste have been a prominent subject in the national discourse. In order to elicit information on the scale and nature of the gaps, the survey asked formal enterprises (only) to report on the skills of their employees and training they had received<sup>8</sup> . It also asked about perceived skills gaps in the current workforce and demand for skills among employers.

58. (a) Skills status and gaps: Employers reported that in each category of workers (manual, service, administrative, technical), except managerial, less than half of workers were fully proficient in their jobs. Managerial workers appear to be the most proficient, and 72 percent of firms reported the managerial category to be fully skilled in their jobs. Enterprises also reported that the categories most likely to have skill gaps (i.e. having no workers that were fully proficient) were administrative (12 percent) and technical/professional (21 percent). In spite of the fact that about half the workers in each category are fully proficient (and another 20-30 percent are almost proficient), enterprises also identified major gaps for each category of workers (Table 16).

59. Across all categories of workers, English and Portuguese language skills were identified as the single most important skill gap. Manual workers need a range of skills, the most important of which appear to be language, technical and practical skills, and basic numeracy/literacy. The most significant skill gaps for service workers seem to be language, customer handling skills, and administrative and financial skills. In the case of administrative workers, enterprises report them as being most deficient in administrative and financial and language skills. Technical and professional workers appear to need language and technical/practical skills, while managerial workers need to hone language skills most, but also their management, administrative, marketing, and negotiating skills. Clearly therefore, language skills and technical skills appear to be the most lacking among workers of formal enterprises.

60. Employers were further probed on what skills they expected to become more important in the coming two years, as some indication of emerging areas of labor demand. The main areas are listed in Table 17 below. As can be seen, one significant group of skills (i.e. literacy, numeracy and problem solving) are skills that in principle should be being provided through the general education system and hence have policy implications for that sector. Others, such as driving or customer handling, are skills which typically are provided in the private sector or on-the-job training. Others need further assessment of the extent to which public sector and private sector training providers are meeting demand.

> 8 It was planned to ask the same questions of informal establishments, but pilot testing revealed that there were insufficient reliable answers.

27