To better understand where and how progress has happened in employment in Sri Lanka, the study undertook an analysis of the nature of labour market progress from 1990-2010, using a wide array of indicators to capture the different dimensions of employment. The study aims to identify factors affecting progress and future challenges. The study finds that the country has achieved progress in the labour market under unique and challenging conditions, including a North/ East war that lasted for three decades. The remaining challenges highlight the importance of hybrid policy approaches and the importance of long-term policy consistency across different regimes.