Shock report: Shrinking labour market in Thailand

It’s not a secret anymore. Worker shortages will be the new normal. Not overnight, but over the coming decades.

Thailand’s population will shrink to as low as 40 million over the next five decades.

The decline will obviously affect the country’s workforce.

If the current trends continue, there will only be 22.8 million workers in 50 years.

According to the Bureau of Registration Administration under the Ministry of Interior, Thailand's population was 66 million, and the workforce 38 million, at the end of 2024.

Are your corporate brand and Employee Value Proposition strong enough to win the war for talent?

Don’t sit on your hands. Doing nothing is a choice. Is that you?

Or will you be left out in the cold, struggling to find the right talent when you need them most?"

Worker shortage has now become one of five Mega Trends together with climate change, tech transformation, geopolitical shifts, and urbanization.

The Law of Supply and Demand

You know what happens when a queue is too long, right?

The law of supply and demand dictates that a low supply drives up the prices.

In employment terms, that means the following:

• Can you answer this question from the candidate: Why shall I come and work for you?
• Finding the right people to hire will become increasingly difficult in a sellers’ market (read: candidates).
• More importantly, you need someone to help you present your job opportunity, someone who can influence and nurture the best potential out there.
• It becomes a market where the candidates can choose the best offers.
• Do you know how to manage counter offers before your preferred candidate accepts to stay in the current job and company?
• It will be a scenario where only some companies become Employer of Choice.
• Job hopping is likely something we must live with and learn how to take advantage of.
• You need a plan on how to brand your company and not just your products and services.
• The word is EVP, employee value proposition. In Sales & Marketing, we call it USP (unique selling points). Do you have one?

The World Bank has this to say

The World Bank reported in 2021 that Thailand’s labour market has 38 million people, which is defined as all people between the ages of 15 and 64.

• Thailand’s labour market faces several challenges, including declining labour force participation, a slow shift of jobs out of agriculture, and high rates of informality.
• These challenges are complicated by an aging population, which is occurring quickly in Thailand.

Agriculture still employs about 33% of all workers in Thailand compared to 23% of employment in the Philippines, 10% in Malaysia, and 5% in the Republic of Korea.

• Thailand’s projected demographic changes will reduce the overall labour force by 14.4 million people between 2020 and 2060.
• Losing 14.4 million over 40 years is equal to 986 people per day or what can be seated/standing in 20 standard BMTA city buses.

Blame the fertility rates, already low and dropping

If a country’s fertility rate and replacement level (the average of children a woman has in her lifetime) is 2.1, then the country’s population will remain level.

If a woman has more than 2.1 “children,” the population will grow.

In 2024, Thailand's Total Fertility Rate (TFR) dropped to 1.0, marking a significant decline.

This rate is notably lower than Japan's 1.2, placing Thailand among countries with ultra-low fertility rates, such as South Korea (0.68) and Singapore (0.97).

2024 was the fourth consecutive year in Thailand in which deaths exceeded new births. Which is the simple explanation for a decreasing population and labour market.

Not that many decades ago, Thailand reported over one million births each year. In 2024, there were only 462,240 births.