The student population isa million at over 50 universities. In the year 2016/17, the total undergraduate enrolment (government and non-government) in all programs was 788,033technical and vocational education centres had an annual enrolment figure 302,000.

Wages are set either at the company level or are based on negotiation between the employer and the employee. Wages shall be paid in cash, if mutually agreed to. Wages paid in kind may not exceed the market value and in no case may exceed 30% of the wages paid in cash.

The Private Organizations' Employees Social Security Agency is mandated with maintaining the registry of employees of Private Organizations while the Ministry of Revenue collects the dues along with the Income Tax obligations of the employees.

Employers are required to provide pension contributions, according to the below table, for their employees excluding workers involved in cotton collection, sugar cane cutting and such other similar works regularly repeated in the course of the year. These contributions provide for the following benefits:

The Ethiopian Investment Commission issues work permits to investors. A work permit is issued upon presentation of all the necessary documents and the issuance of a work permit takes about two hours.

Expatriates may be employed in Ethiopia with a view to developing local capacity. When calculating the number of expatriates that may be recruited, factors such as availability of local professionals, complexity of the investment and the need for high skilled professionals are taken into account.

What investors think

Companies operating in Ethiopia confirm that labour costs are favourable.

However, investors also strongly encourage newcomers to familiarise themselves with and adapt their management techniques to the local culture. Cultural clashes between foreign managers and local workers are frequent, especially in the early stages of production when the two groups do not know each other very well. Investors agree that Ethiopian labourers tend to put emphasis on self-respect and appreciation of their national cultures and history. Commitment to work seems to vary and workers’ motivation may have to be fostered. Investors agree that the vast majority of labour force does not react to financial incentives. However, individual mentoring and investing in people’s food and shelter has proved effective in motivating people to improve their productivity.

The knowledge base of unskilled workers may sometimes be poor, which then complicates the early stages of training and upskilling. Vocational training still does not result in the needed skilled workers. Investors also note a high staff turnover after staff acquire new skills around 5-8% of staff per month, sometimes rising to 10%. Skilled workers tend to be scarce, particularly outside Addis Ababa and expensive with costs on a par with middle-income countries.

Investors also sometimes complain about cumbersome and time-consuming procedures for bringing expatriate workers.

All private operators in industrial parks contract their workers through the grading centre of the industrial park and are satisfied with this approach. Investors are pleased with the technical abilities of their staff and concur that new workers can be quickly brought up to speed. Companies usually start with a relatively high number of expatriate staff but they steadily replace them with local workers by referring to in-house training. As many of the companies operating in the park are multinational, they bring their newly hired engineers and middle management staff from sites in other parts of the world (e.g. in Asia or Europe) to train them for several months. They report satisfaction with this approach of training their staff even though wage expectations may rise following these trainings that usually last between three months to one year. Soft skills, such as communication, teamwork and time-keeping also require particular attention.