Labour Shortage Still Persists in Malaysia

The problem of workers shortage continues to hinder business productivity and recovery, which could lead to layoffs as companies try to minimise operation losses. 

Industry players said that despite offering an attractive pay package, Malaysians are unwilling to pick up the offer, and some will not last long, resulting in a high turnover rate. 

 

Slow application process for foreign workers

Federation of Malaysian Manufacturers (FMM) president Tan Sri Soh Thian Lai said that the delay in the intake of foreign workers would significantly affect productivity as industries would most certainly hinder the industry's business sustainability and recovery progress. 

He added that at the same time, companies continue to face challenges to fill the shortages in the unskilled general worker category with local workers not interested in certain jobs and industries, particularly in the '3D' sectors.  

With the freeze on foreign worker recruitment raised from February 15, 2022, industries have begun the application process. 

Soh said that it would take a few months before foreign workers can start coming in as there are several phases to go through in the application process, which FMM hopes could be shortened where possible. 

He explained that due to some of the unresolved issues with the source countries, this might delay the process of the foreign workers coming in.

FMM hopes for greater consistency and clarity in the application process flow for workers towards expediting approvals and their entry in supporting the industry's workforce needs.

FMM also called on the government to quickly resolve all the outstanding problems in the memorandum of understanding (MoU) with the source countries so the workers could start coming in as soon as the One-StopCentre at the Human Resources Ministry approves the employers' applications.

According to Soh, employers have aimed to bring in workers within three months, if not sooner.

 

Labour shortage's effect on 24-hour businesses

Due to the labour shortage, some businesses, especially Mamak restaurant operators, have suspended their plans to operate 24 hours, despite the government's permission since April 1. 

KK Super Mart convenience store owner Datuk Seri Dr KK Chai said that while its business runs 24 hours, it imposes heavier burdens on the staff and its operation in general. 

"Convenience stores like us have to run 24-hour because that sets us apart from other stores. Yet, we are finding it hard to do so, hence why we hope for foreign workers' intake to be expedited," he said. 

He said the chain store would implement the RM1,500 minimum wage set by the government starting next month but believes it is not enough incentive for local workers to take up the job. 

"We have noticed that the turnover rate is high. It is rather disappointing as we offer and work on attractive pay packages and benefits," he added. 

Chai said KK Super Mart might expand up to 120 stores nationwide this year, but the labour shortage slowed down the plan. 

 

Offering RM1,500 minimum wage will not be enough

EMIR Research head of social, law and human rights, Jason Loh, stated that providing the minimum wage is not sufficient to address the issue of labour shortage. 

"A salary hike should be on the offering, where the return on investment far exceeds the percentage of wage increment," he said

He added that businesses should treat salary hikes as a form of investment, covering short-, medium and long-term horizons. 

The think tank calls for the minimum wage to be reconceptualised as a starting point rather than a benchmark. 

According to Jason, if the current labour shortage extends, it may have a knock-on effect on the viability of the business concerned, leading to a potential shutdown of operations and the layoff of workers. 

For big corporations such as Sime Darby Plantation Bhd, which hires over 16,000 foreigners in the upstream division, the foreign labour shortage has caused RM10 billion to RM12 billion in revenue loss, with a 20% to 30% shortfall in potential production. 

"This, in turn, impacts our national revenue in terms of taxation and duties. It also affects our stock market, asset price valuation, and such," he said. 

 

Source: The Malaysian Reserve