The Thai labour market faces an increasingly challenging outlook as new graduates show declining interest in working full-time for companies, while existing employees face heightened risks of layoffs amid economic uncertainty.
According to Tanit Sorat, vice-chairman of the Employers’ Confederation of Thai Trade and Industry, younger generations are less inclined to seek full-time employment, particularly in factory settings, as they prioritise greater freedom and flexibility in terms of working hours.
‘Many of them aspire to work as freelancers instead,’ he said
On the other hand, employers are reluctant to hire young people who lack sufficient work experience, partly due to their limited skills and familiarity with corporate environments, said Mr Tanit, who also serves as chairman of the National Labour Development Advisory Council.
‘This is not unique to Thailand – it’s a global trend,’ he said. ‘Companies must adapt to the changing lifestyles of workers, while universities need to revise their curricula to meet market demands.’
Each year, Thai educational institutions produce about 450,000 new graduates. Around 61% hold bachelor’s degrees, with the remainder earning vocational certificates. However, many degree holders lack the practical skills that employers are looking for, said Mr Tanit.
Meanwhile, existing employees are increasingly anxious about job security, he said.
Gloomy prospects
A recent report by the Economic Intelligence Center of Siam Commercial Bank revealed that around 5 million Thai workers, or 12% of the country’s total labour force, are at high risk of job losses or reduced working hours due to the direct and indirect impacts of US tariffs on Thai exports.
The affected workforce is concentrated in high-risk industries exposed to US trade measures, including rubber, textiles, tyres, auto parts, electronic components and consumer electronics and hard disk drives.
In addition, Thailand’s economic vulnerabilities, structural issues and declining competitiveness have further weakened the labour market in the post-pandemic period, the report noted.
Thailand’s unemployment rate peaked at 2.25% in the third quarter of 2021 before declining to around 1% since 2023. Despite this relatively low level, unemployment has shown notable increases in several segments.
In particular, the unemployment rate among workers covered by the social security system rose to 2.3% in July 2025 – the highest level in three years – up from 2.1% in the first half of this year.
Unemployment among young workers aged 15-24 increased to 5.9% in the second quarter of 2025, marking the highest rate since 2023. Notably, unemployment among bachelor’s degree holders or higher surged to 18.9% in the same quarter, up from 16.1% in the previous quarter.
It should be noted that Thai government unemployment statistics are not considered very reliable because they underestimate the true extent of labour underutilisation, particularly in informal and vulnerable sectors, and seasonal unemployment in agriculture.
That said, the number of persons counted as employed has continued to decline, with total employment falling by more than 500,000 positions compared with 2023, the year employment peaked at 40 million as the labour market recovered from the pandemic.
The World Bank this month reported that recent job growth in the region has been concentrated in low-productivity, often informal service jobs that offer limited opportunities for advancement.
The bank’s East Asia and Pacific Economic Update highlighted a ‘jobs paradox’ in the region – relatively strong economic growth alongside insufficient creation of quality employment.
The World Bank emphasised that bolder reforms to remove barriers to firm entry and competition could unlock private capital, enabling more dynamic and productive companies to grow and generate better jobs.
However, Southeast Asian economies face a lower risk of job displacement compared to advanced economies. Only about 13% of jobs in the region involve non-routine cognitive tasks, compared with 39% in advanced economies. Yet this also means the region may benefit less from emerging technologies, according to the World Bank.