A wide gap between academia and job market prevents the country from reaping the desired benefits, even as the number of graduates grows, experts say.
They said the absence of a dedicated authority for managing human resources and outdated education system are responsible for the situation.
This leads to unemployment, dependence on foreign professionals and untapped demographic dividend.
Human resources expert Mohammad Mashequr Rahman Khan has identified old-fashioned curriculum in higher education and easy access to degrees as key factors why graduates lack right kinds of skills.
"A huge gap between academia and the industry exists in the country and this is being widely discussed," said Mr Khan, president of the Bangladesh Society for Human Resources Management (BSHRM).
Many tertiary-level educational institutions have little or no exposure to relevant industries, which leads to poor employability of the graduates, he added.
Mr Khan said there should be a dedicated government agency to conduct needs assessment of how many graduates are required for different trades so that gaps can be plugged.
"Bangladesh should establish a human resources ministry, as countries like India, Malaysia and Sri Lanka have," he said.
Due to the absence of a dedicated government agency, the country cannot exploit its demographic dividend, he argued.
"We've got a fairly large number of unemployed graduates, on the one hand. We hire a good number of foreign professionals in different sectors like apparels and pharmaceuticals, on the other," he said.
Currently some 0.5 million foreigners are working in Bangladesh, who take home a substantial amount of money every year.
They said a modernised education system would enable local graduates to get the white collar jobs held by foreigners.
According to available data, around half a million students complete the tertiary-level education and enter the job market every year.
A record number of 412,532 candidates have applied for 1,903 posts in the 40th BCS under Bangladesh Public Service Commission (PSC) this year.
This number highlights the crisis of right employment for graduates in Bangladesh, experts said.
Some 3,960,470 students were enrolled with 138 public and private universities in 2017, statistics available with the University Grants Commission (UGC) revealed.
The UGC, in its Annual Report 2017, also said there is a crying need for specialised universities in the country in order to tackle the challenge of globalisation.
The present unemployment rate, according to official estimate, in Bangladesh is 4.37 per cent.
The rate among the university graduates in Bangladesh is higher at 38.6 per cent, according to a recent study, conducted by the Bangladesh Institute of Development Studies (BIDS).
The Institute said the graduates prefer to be cadres of the Bangladesh Civil Service (BCS), so they need to wait for a long time to complete the employment procedure.
Besides, the students of engineering and other technical subjects face difficulties in getting jobs due to the mismatch between the university qualification and demand at workplaces.
Prof AK Azad Chowdhury, former vice chancellor of Dhaka University and a former chairman of the UGC, said the university graduates lack both soft and hard skills that create mismatch between academia and employers.
The world has entered the era of fourth industrial revolution, but the students are not being fully prepared for this, he said.
The entire education system should be overhauled to reduce the employment rate among university graduates, Dr Azad said.
He also underscored the need for Higher Education Commission (HEC), which can help prepare and equip the next generation to address the challenges of globalisation.
He also stressed the need for making the entire education system biased towards science and technology.
Citing a recent study, Shahidul Islam, a research associate at the BIDS, said not only students, but also most of the university teachers lack adequate skill and quality to solve complex and technical problems in classrooms.
This hampers quality of education, he added.
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