The Employers' Confederation of Thai Trade and Industry (EconThai) expects the country's employment to continue slowing until the first quarter of 2021.
The dim prospect is the result of the far-reaching impact of the coronavirus pandemic, which has crippled the global economy and limited Thailand's capacity utilisation in the manufacturing sector.
EconThai vice-chairman Tanit Sorat forecasts average capacity utilisation this year at 60.8%, a poor sign for businesses and their employment.
"The pandemic will continue to affect the global economy until the vaccine against the virus is found," he said. "This is a tough time for any employment plans."
EconThai said the government's economic stimulus measures such as a job retention scheme and a job fair have yet to result in significant impact.
Last month's three-day job fair, during which up to 1 million jobs were offered to attendees, was part of state attempts to curb the unemployment rate.
The government earlier announced a plan to spend up to 100 billion baht for job creation and new training in the agricultural sector, aiming to help people who lost jobs during the lockdown period.
A further 20 billion baht will be spent on hiring new graduates for up to one year.
The aid comes as some businesses are considering adopting a downsizing approach to deal with their financial problems.
"They plan to reduce the size of their organisations to match the new norm during the pandemic, when many companies tend not to hire new employees or graduates," Mr Tanit said.
Many companies are watching their goods inventory pile up because of fewer purchase orders.
Some are also trying to adopt new technology to help reduce operating costs and increase efficiency.
"This is another trend in employment. Workers are being replaced by robots and the automated system," Mr Tanit said. "One result is the unemployment rate will keep increasing."
Investment uncertainties, a labour shortage in high-tech industries, the ageing society and a prohibitively high daily minimum wage are other factors that will affect employment in the future.
The ongoing political conflicts, notably anti-government protests, worry EconThai because the issues may depress the economy and keep employment from recovering.