In an increasingly competitive Pakistan job market, many students haveinsecurities about potential employability. The education rate in metropolitan cities is rising at the same time that demand for workers is decreasing, affecting students’ opinions about finding or changing jobs. This article studies the impact of skills on the employability confidence of Pakistan university students, alongside the moderating effect of the labor market, using the partial least squares method and structural equation modeling. This research is important because it allows for an examination of employability issues in Pakistan, providing insights into the employability challenges faced by students in a country with distinct socioeconomic conditions. Our findings reveal that personal qualities, professional skills and transferable social skills have a positive and significant relationship with employability confidence, whereas corporate work-related skills and transferable individual skills have a positive but insignificant relationship with employability confidence. Job-seeking skills have a negative and insignificant association. The labor market moderates the relationship between personal qualities and employability confidence, and corporate work-related skills and employability confidence. No moderating effect was found between other relationships. This research is novel in its incorporation of the labor market as a moderator in the relationship between skills and employability confidence. Keywords: Employability, Labor market, Skills, Students, Higher education, Smart PLS.