The impact on economy

1) Increase unemployment rate

Lack of employability skill means it is not easy for the fresh graduate to
get a job . Thus , this will increase the unemployment rate . According
to Vena Nedeljkovic (2014) , high unemployment has a negative effect
on economic growth and productivity. There is a risk

contributing to

economic growth. Moreover, having a large share of the young

workforce unemployed, not only leads to reduced productivity and
gross domestic product (GDP) but also increases the economic costs
for the state, since there are more money to be paid on social benefits
and less money coming in from taxes.
2) Low productivity
According to Tina Amo , the rate of production is low when employees
do not have enough knowledge and skill to do their jobs confidently.
Employees who lack in skill need more time seeking help to perform
their jobs or they could perform tasks to their understanding, to the
disadvantage of the work process. Supervisors and more experienced
employee must also spend time monitoring employee who lack in skill,
which detracts from their work and increases the amount of time
necessary to complete production.