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Analysis of Skill Levels in The Furniture Sector of Bangladesh
Analysis of Skill Levels in The Furniture Sector of Bangladesh
ISBN: 978-984-34-2311-5
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will be appreciated.
Team Leader:
Principal Researchers:
Samiul Hoque
Administrative Officer
Center for Trade and Investment
University of Dhaka
E-mail: samiulhoque63@yahoo.com
C e n t e r fo r T r a d e a n d I n v e s t m e n t | U n i v e r s i t y o f Dh a k a
Md. Mujibul Haque
State Minister
Ministry of Labour and Employment
Government of the People’s Republic of Bangladesh.
Bangladesh Secretariat, Dhaka-1000.
Message
One of the high-growth potential Small and Medium-sized Enterprises (SME) sectors of Bangladesh is
Furniture sector. It has a growth rate of 19% per year and contributes 0.29% in the GDP of the country.
The growth prospect of this sector is being enhanced by the rising demand in the domestic as well as
in the international market. Local demand has been growing due to gradual economic prosperity of the
mass people of the country while export potential in international market is derived primarily from com-
parative cost advantage. Industry experts think that the furniture sector has immense scope to grow
where the sky is the limit, especially in the context of growth in international market.
The research work ‘Analysis of Skill Levels in the Furniture Sector of Bangladesh’ has been
conducted by the Center for Trade and Investment (CTI) of the University of Dhaka under the guidance of
National Skills Development (NSDC) Secretariat, Ministry of Labour and Employment. This research work
has been financed by B-SEP Project of International Labour Organization (ILO), Dhaka office. The
research work done in the purview of skills development activities of the government is highly
appreciable.
Considering the importance of furniture sector in the economy of Bangladesh and the importance of
skills for steady growth of this sector, the study aims to assess the skills of furniture workers’ of the
country. The study emphasizes to identify different categories of occupations in the furniture sector,
assess the skills levels of different furniture employees i.e. the current skills level of the furniture sector
employees and skills required for the job, identify the occupations that are hard to fill-in and their under-
taking reasons and make recommendations for the improvement of skill levels in this sector.
I would like to extend my heartfelt gratitude to the CTI research team of the University of Dhaka; B-SEP
Project of ILO for conducting and financing this research work and thanks to NSDC Secretariat, MoLE for
publishing this research work in time.
Message
Furniture sector is one of the potential and high-growth sectors of Bangladesh. Due to the rising demand
of the national and international markets the growth prospect of this sector is being stimulated every
year. For the gradual economic prosperity of the mass people of the country the local demand has been
boosting up and export potential in international market is derived primarily from comparative cost
advantage. Industry experts think that the furniture sector has immense scope to grow, especially in the
context of growth in international market.
Furniture industry in Bangladesh comprises of 71034 firms out of which 70953 are micro and small scale
firms and the remaining 81 are medium scale firms. The volume of annual local sales of the furniture
industry in 2013 was Tk. 66.65 billion and this sector employs about two million people in Bangladesh.
Though furniture sector has unprecedented potential, this sector has not received enough attention from
researchers and policy makers. A series of research is needed to find out where, how, when and what
type of skill development programs should be initiated to improve the skills of labour in the furniture
sector. This study tries to identify the current skills shortage in furniture sector so that training institutions
or skills development programs can be initiated.
Center for Trade and Investment (CTI) of University of Dhaka under the guidance and consultations of
National Skills Development Council (NSDC) Secretariat, Ministry of Labour and Employment (MoLE)
carried out the research work ‘Analysis of Skills Levels in the Furniture Sector of Bangladesh’.
Bangladesh Skills for Employment and Productivity (B-SEP) Project of International Labour Organization
(ILO), Dhaka bore the pains of financing the research work to study the existing demand of skills and
identify future skills anticipation of this sector.
I would like to express my sincere appreciation to the CTI research team of University of Dhaka; B-SEP
Project of ILO, Dhaka and NSDC Secretariat, MoLE for conducting this nice research work and publishing
the report in time.
Mikail Shipar
Secretary
Aa¨vcK W. Av Av g m Av‡iwdb wmwÏK Professor Dr A A M S Arefin Siddique
DcvPvh© Vice-Chancellor
University of Dhaka
XvKv wek¦we`¨vjq Dhaka-1000, Bangladesh
XvKv-1000, evsjv‡`k Phone: 9672545, 9672533 (Off)
†dvbt 9672545, 9672533 (Awdm) Fax: 880-2-9667222
d¨v·t 880-2-9667222 E-mail: vcoffice@du.ac.bd
Message
The Center for Trade and Investment (CTI), University of Dhaka, has successfully executed a
research project titled, “Analysis of Skill Levels in the Furniture Sector of Bangladesh”, on
behalf of the National Skill Development Council (NSDC Secretariat), Ministry of Labor and
Employment, Government of Bangladesh and International Labour Organization (ILO).
CTI is an important research arm of the University of Dhaka, and I am happy to see that it is
continuously conducting high quality research on trade and investment issues including skill
development and capacity building. I would like to congratulate Dr. Altaf Jalil, Director, CTI (Team
Leader) and the rest of the CTI research team for carrying out this valuable study.
As the Chairman of Center for Trade and Investment, University of Dhaka, let me also take this
opportunity to thank Mr. A.B.M. Khorshed Alam, CEO (Additional Secretary), NSDC, and the Inter-
national Labor Organization for initiating this research work which will go a long way in improving
human resource development in Bangladesh.
Preface
I am delightful to know that the research report on ‘Analysis on Skills Levels in the Furniture Sector of Bangla-
desh’ has been conducted under the research executing agency Center for Trade and Investment of University of
Dhaka with the guidance of NSDC Secretariat is going to be published. The objective of this research was to
investigate potential occupation, skills required, growth potential and skill shortage in this sector.
A dedicated research team led by Professor Dr. Altaf Jalil, Director, CTI and Professor, Dept. of Management, DU
with the lead researchers of the respective department worked diligently to collect field data, analyses the data,
preparing the research findings and overall report. Data were collected from large, medium and small firms
located in Dhaka City, Savar, Hemayetpur, Manikgonj, Narayangonj, Bogra, Sylhet and Barisal through question-
naire and face to face interview with some experts. Total 105 respondents selected from 43 firms (59 from large
and medium firm and 46 from small firm) with semi structured questionnaire. Qualitative method was used to
investigate research objective related to inefficiencies (if any) or skill gap of employees in furniture sector.
Research findings classified the occupations of this sector in two groups, one is “large and medium” firms where
the most occupations are production manager, floor-in-charge, supervisor, lead hand, charge hand, helper and
worker; whereas the small firm’s occupations are owners, head technicians, carpenter or helper and worker.
This research found that in the “large and medium” firms, the major shortage of skills are managing own devel-
opment technical or core skills, computer literacy or knowledge of IT and numeracy skills. In the “small” firms,
the major shortage of skills is computer literacy or knowledge of IT, technical or core skills, managing own devel-
opment and literacy skills. However, this research reports reveals the different occupations that hard to fill-in
from the existing labor market and suggested policy recommendation to bridge the gap in the skill shortage in
furniture industry of Bangladesh.
I like to express my sincere appreciation to CTI Research team for their worthy research finding. I do hope and
believe that this research report will be very significant for the need assessment for skills requirement in coun-
try’s furniture industry sector.
C e n t e r fo r T r a d e a n d I n v e s t m e n t | U n i v e r s i t y o f Dh a k a
3.2.3 Supervisor................................................................................................................ 22
3.2.4 Lead Hand................................................................................................................ 22
3.2.5 Charge Hand ............................................................................................................ 23
3.2.6 Helper ...................................................................................................................... 23
3.2.7 Worker ..................................................................................................................... 23
Chapter 4: Skills Shortage .................................................................................................... 24
4.1 Skill Gap of Furniture Employees.................................................................................. 24
4.2 Consequences of Skill Gap ............................................................................................ 26
4.3 Hard-to-fill in Skills ....................................................................................................... 26
4.4 Causes of Difficulty in Filling Positions ........................................................................ 32
4.5 Skill Development Programs in Furniture Firms ........................................................... 33
4.6 Cost and Outcome of the Skill Development Programs ................................................ 33
4.7 Sources of Employees in the Furniture Industry............................................................ 34
Chapter 5: Conclusion and Recommendations................................................................... 36
5.1. Conclusion..................................................................................................................... 36
5.2. Recommendations ......................................................................................................... 37
REFERENCES....................................................................................................................... 41
Appendix 1: Name and Size of the Firms ............................................................................ 42
Appendix 2(A): SURVEY Questionnaire for Supervisor of Production Department .... 43
Appendix 2(B):Survey Questionnaire for Department Personnel .................................... 46
APPENDIX 3: Demographic Profile of Respondents......................................................... 49
APPENDIX 4: List of Survey Respondents ........................................................................ 52
LIST OF TABLES
Page xii
Page xiii
Page xiv
CHAPTER 1
01
ANALYSIS OF SKILL LEVELS IN THE FURNITURE SECTOR
INTRODUCTION
But the irony is that this labour intensive industry still primarily employs many unskilled or to
some extent semi-skilled labor and there are not many skill development programs available.
Existing skill levels of labor market in Bangladesh is depicted in Figure 1.
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1:
(in Bangladeshi Taka)
CHAPTER 2
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No.
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Processed Wood Furniture
Plastic Furniture
Steel Furniture
and North America have the highest consumption levels. In line with this, the world trade of
furniture has grown consistently at around 1% per year (see Figure 4).
ANALYSIS OF SKILL LEVELS IN THE FURNITURE SECTOR
World trade of furniture amounted to current US$ 94 billion in 2009 and grew in the following
years to US$ 135 billion in 2014, then contracted in 2015 with no change in 2016.
The major portion of international trade of furniture originates in China, Germany, Italy, Poland
and Vietnam and goes to the US, Germany, the UK, France, and Canada.
Figure 5 shows the major exporting countries. Export figures of China decreased in the year
2016 from earlier levels.
According to Figure 6, top importing countries are industrialised nations. USA is the single
largest importer of furniture while European Union provides the largest regional market. The
fastest growing furniture exporter is Vietnam. In the last five years, the increase of imports in the
US (from US$ 23 billion in 2010 to about US$ 32 billion in 2016) was the main engine of
growth in international trade of furniture. (CSIL, 2016)
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ANALYSIS OF SKILL LEVELS IN THE FURNITURE SECTOR
Figure 5: Major Furniture Exporting Countries, 2010-2016 in US $ billion
Source: Centre for Industrial Studies (CSIL, 2016)
and stood at 0.02% in 2014. In the year 2011-12, it was estimated that 3.21 percent of total
production was exported (Export Promotion Bureau, 2012; European Union, 2013).1
ANALYSIS OF SKILL LEVELS IN THE FURNITURE SECTOR
An analysis of export statistics of Export Promotion Bureau (EPB) reveals that the major items
of export include wooden furniture used in bedrooms, office, and kitchen (HS 94035000,
94036000, 94036090). Besides, metal furniture is exported but the volume is much lower
compared to wooden furniture. The major destinations of furniture export from Bangladesh
include China, Congo, Germany, Mali, Spain, Saudi Arabia, and United States.
An Autoregressive (AR) model regresses its own lags on it. To model the furniture export and
forecast the future export of furniture, an AR(2) model shows that two years lags has predictive
power on the current export in furniture sector. Result of the AR (2) is given below:
1
According to European Union Inspired Technical Report: Furniture Sector total sales of 2011-12 was USD 840
Million. And According Export Sta�s�cs, EPB, the total export amount was USD 27 Million in 2011-12.
19
ex por t Coef . St d. Er r . z P>| z | [ 95% Conf . I nt er val ]
95% CI forecast
As shown in the AR(2) model and Figure 7 above, this study forecasts that furniture export
from Bangladesh will grow slowly over the next five years and will be about US$55 million
(with a most optimistic forecast of US$70 million and most pessimistic forecast of US$ 41
million) in 2021. This estimate is based on the AR(2) model with a 95% confidence interval.
It may be noted that, out of the 43 firms under study, 14 firms reported their approximate annual
exports of furniture. However, most companies did not report export due to confidentiality
reasons.
CHAPTER 3
20
FINDINGS
ANALYSIS OF SKILL LEVELS IN THE FURNITURE SECTOR
This section reports the list of occupations in the production department of typical ‘large and medium’
and ‘small’ furniture factories (industry classification details are provided in 2.9.1). As expected,
there are multiple differences in the occupation list between the two different sizes of firms.
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SKILLS SHORTAGE
CHAPTER 4
6
2017
bright
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2017
H
2017.
2017.
9
10
Number of
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11
12
12
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CHAPTER 5
Traditionally skilled carpenters and wood carvers in Bangladesh have been producing high
quality wood curved furniture. In recent years, large furniture manufacturers such as Legacy,
Akhter, Hatil, Brothers, Nadia, Furnitech, Partex, etc. have been producing and exporting large
quantities of wood carved furniture. Bangladesh needs to take advantage of this age-old skill
which is available in the country, and incorporate contemporary designs to capture niche
export markets.
Similar skills in metal carving has also be been practiced for many years in Bangladesh. Metal
crafts and furnitures are available in the local market. There is potential to further nurture these
skills for exploring the export market.
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18
18
19
20
19 & 20.
Operator
Junior Operator
Junior Execu�ve
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