Labor market assessment in the food, agriculture and light industry sector of Mongolia

At the request of the Ministry of Food, Agriculture and Light Industry (MoFALI) and the Food and Agriculture Organization of the United Nations (FAO), the MIRIM Consultant LLC conducted the “ Labor market assessment in the food, agriculture and light industry sector of Mongolia” on 05 May -10 December 2023.

The purpose of this survey is to analyze the current situation of the labor market of the food, agriculture and light sector, to clarify the burning issues related to human resources, to determine jobs that will increase in nearing future and the skills of the employees suitable for these jobs, and to develop a recommendation for economic entities, sector policy-makers, and implementing organizations in the field of getting, training, and keeping the labor force in the sector.

Both primary and secondary quantitative data were used in this survey. Within the framework of primary quantitative data, samples representing the stakeholders in the labor market of the sector were selected. For example, 335 business entities representing the employer and 359 employees representing the workforce were surveyed. A total of 62.7 percent of the survey respondents are from Ulaanbaatar city, and the remaining 37.3 percent local. Moreover, 140 civil servants, 220 job seekers and citizens who are not in education, employment, or training) were surveyed.

Secondary data was collected from the National Statistics Office (NSO), the Ministry of Food, Agriculture and Light Industry, and other related branches and agencies. In addition to these data, the survey team conducted 26 qualitative surveys involving decision-makers at the policy level of 3 governmental organizations, 15 civil servants, 3 private sector business entities and members of 5 professional associations.

According to the results of the statistical analysis, the employees working in the agricultural sector accounted for 26.7 percent of the total employees in Mongolia, but it decreased to 24.9 percent between 2018 and 2022. Several factors affected this decrease, but at the macro level, it can be explained by the fact that the labor productivity of the sector is far below the national average. For example, Mongolia’s actual labor productivity averaged 22 million MNT in 2018-2022, while it was only 13.2 million MNT in in the agricultural sector. In addition, based on the growth of labor productivity of the sector and the state over the past 5 years, the labor productivity of the agricultural sector lags the national average by 7-14 years. Due to this, the average salary of employees working in the sector is 24 percent lower than the national average, which can be the main reason to go out the sector. Moreover, according to the statistics of 2018 and 2022, the average age of employees working in the agricultural sector was higher and the level of education was lower compared to other sectors. Not only the proportion of economically inactive groups among the employees specialized in the agricultural sector has increased, but also the tendency to start a private business has increased.

To mention some results of the survey, according to the results of the employer’s sample survey, the business entities operating in the food, agriculture and light industry are not provided with human resources. For example, 45.1 percent of the business entities involved in the survey answered that they were provided with 90-100 percent of human resources, while 22.4 percent answered that they were provided with less than 60 percent.

There are many people interested in working in the labor market, but the mechanism to connect them with employers is not working. For example, 81.6 percent of employers use informal channels to search for employees, whereas 40.8 percent of them ask acquaintances and friends, 35.8 percent announce on social networks, and the remaining 5.0 percent contact universities and higher education institutions. In other words, they do not contact the official recruitment channel – the labor exchange.

For employers of the sector, it is necessary to develop human resource policies and strategies, attract the workforce, train and prepare new employees, develop their skills, invest in new technologies and innovations, adopt and implement policies to increase labor productivity and salary levels, adopt a strategy to increase wages and supplies for specialized workers, cooks, tailors, drivers, assistants, agronomists, livestock farmers, distributors and sellers.