Home Student & Career Tips 8 Common Challenges of the Labour Market

8 Common Challenges of the Labour Market

It is no longer news that there are numerous challenges in the labour market. A labour market is a place where workers and employees interact with each other. The market functions with demand and supply of labour. In this market, labour demand is the firm’s demand for labour while labour supply is the workers’ supply of labour. However, the supply and demand of labour in the market are influenced by changes in the bargaining power.

8 Common Challenges of the Labour Market
These are common challenges you will likely encounter in the labour market

The definition above goes a long way to show that the labour market is not a place for only graduates; rather, it is open to all that has services to render.

Reminiscing to my days as an undergraduate, I looked forward to graduating from University and going into the labour market. Reason being that I wanted to make money like others, but little did I know that after graduation comes to the real world. It was after graduation it dawned on me that the labour market was not friendly at all. 

Sincerely, it is filled with breathtaking challenges.

Upon embarking on a public opinion poll, lots of individuals, especially graduates, pointed out the challenges of the labour market and we will be looking at some of them, believing that the information in this article will be of help to someone who needs it.


Below are 8 common challenges of the labour market you need to know before joining the labour force:

1. Demand for Labour is Lower than the Supply

One of the very common challenge of the labour market is that demand for labour is lower than the supply. In every economy, the labour market functions with demand and supply of labour. In a situation where the demand for labour is lower than the supply of labour, unemployment abounds. Over the years, this has been the challenge of many countries.

Using Nigeria as a case study, every year, millions of graduates are pushed into the labour market. Being that the demand for labour is way lower than the supply, the number of the unemployed keeps skyrocketing and this is not a good development in an economy.

The solution to combating this common challenge is to set up more industries or empower the teeming populace on self-employment.

2. Competition

Another common challenge is increased competition. There are too many unemployed in the labour market. This has left employers to compete to hire the best, while the workers compete for the best satisfying job.

The competitive nature of the market has caused more harm than good. It has given business owners the leverage to trample on the rights of employees, treat them with disrespect, etc, and the fear of being rejected or laid off makes an employee endure all sorts of ill-treatment at the workplace

3. Poor Salary Offer

With the current state of the world’s economy, it is expected that salaries will be increased for workers, but sadly, that is not the case. Poor salary offers is another common challenge in the labour market. In an economy where the number of unemployed is higher than the employed, business owners take advantage of this to offer very poor salaries/ wages, knowing that a greater proportion of people will accept such offers just to feed and meet financial responsibilities.

Unfortunately, in most cases, what is offered is not enough to meet up financial responsibilities at the end of the month.

4. Poor Educational System

Did I hear someone ask what has this got to do with the labour market? Well, it has everything to do with it. If you have ever heard of the words “half baked graduates, unemployable graduates”, then that’s the point.

It is no news that the educational system is going down gradually, especially in this part of the world. The standard of education is nothing to write home about, there’s little or no provision for skill acquisition in schools, in preparation for life in the labour market.

Anybody can pass through school successfully as far as they are willing to pay the price and at the end of the day, you discover that there are so-called “graduates” who can’t even spell their names correctly.

In the case where these sets of unqualified graduates and job seekers have a strong connection, they get employed, leaving out the qualified.

This has become a big problem in the labour market. It gives the impression that truly education is a scam like some people say.

The educational sector needs to collaborate with the labour sector to enact a strict policy to ensure this challenge is rooted out. Also, more investments should be made in the educational sector, and skills should be taught in schools from grassroots levels so that employers are not faced with the challenge of hiring incompetent hands.

5. Favouritism

Man know man. Entering the labour market without a strong network can be very frustrating. What goes on in the labour market in this regard is very discouraging.

Being qualified for a job is not what counts these days but who you know and the connection you have. You find out before a job advertisement gets to the knowledge of the public, the vacancies are already filled internally. This is the power of networking.

6. Lack Of Strict Labour Policies

Normally, the labour sector has the responsibility of ensuring that everything in the labour market is in check. They do this by enacting laws and setting policies for the benefit of both parties in the labour market but sadly, such regulations are no longer effective.

If they were, I see no reason why employers offer salaries they deem fit, when there should be a unified pay range. If these policies were effective, employers could not terminate the appointment of a worker without notice; employers will not have the right to kick against the formation of a workers union, they will care about the health and safety of their employees and set up safety policies, workers will be paid on retirement and more.

These policies should be reformed for job security reasons.

7. Daunting Employment Requirements

In the course of researching for this article, I got chatting with some friends, just to get first-hand experiences on labour market challenges. One of my friends said this, “Getting a job these days is very stressful. Sometimes, even when I see a job vacancy that fits my choice, I get restrained from applying because of either location, age, class of degree and above all, years of experience”

I guess anyone who has been out there in the labour market has similar things to say. I’m also in the labour market and trust me, this is one hell of a challenge.

If employers can at least be flexible with the requirements and be more interested in what a job seeker can offer, regardless of age and years of experience, the market will be accommodating. How can one be expected to have 5 years of experience if not given the opportunity to work?

8. Poor Communication

This is what another friend pointed out to be a challenge. “Failure of companies to get back to applicants after an interview. They send a mail inviting me for an interview and afterwards, centuries will pass without notification on whether or not I was selected. It’s annoying”

This is another challenge of the labour market. Communication is very important. When there is a break in one of the components that make up a communication chain, there is a problem. In order words, “Feedback” is very essential. There is no effective communication without feedback.

Just like my friend, many others see this as a challenge that leaves a job seeker in the dark. As much as possible, job seekers should also try to send feedback upon receiving a job invite, indicating whether or not the invite is acknowledged.

Personally, this challenge is a highly unprofessional act that should be worked on.


The challenges we face in the labour market can not be exhausted, it keeps increasing on a daily basis. My failure to address the issue of gender inequality above doesn’t mean it’s not a challenge. The societal view of women in the labour market, especially those that want to build a career in the corporate world has not made it easy for women.

The intimidation, harassment and victimization of the female gender also another big challenge and the book “The woman in the boardroom” by Rois Ola, captured this common challenge. This is a book every woman in the corporate world must-read.

In conclusion, if the government and the labour sector can team up and restructure the labour market, set strict labour policies that will be in the interest of both parties that operate the market, these challenges will be minimized.

While we wait and pray that this happens, this article and the likes are what will prepare your mind for the labour market struggle. Out there, is survival of the fittest.

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