Foreign worker sector braces for a tough 2019

The shortage of foreign workers has hit the plantation and security guard sectors the hardestBy SHAZNI ONG


Foreign worker agencies are bracing for a tough 2019 as the government follows through with its promise to regularise the labour market, cut out fraud and protect foreign workers’ rights.

The agencies are also expecting a drop in foreign hiring as Malaysian employers relook into costs when the minimum wage of RM1,100 is applicable to foreigners on Jan 1, 2019.

Manforce Group Bhd CFO Andrew Chin said the government is also coming down tough on other aspects in 2019, with new terms and conditions that are expected to increase the cost of hiring foreign workers, which is also a bad news for agencies like Manforce.

“(The minimum wage rule) is not our only concern. I’m sure a lot of businesses would have a lot of concerns, among which is in terms of the cost of doing business,” he said.

The government is on a path to wean the country off its dependency on foreign workers due to a combination of reasons, including economic, security as well as past mismanagement in the foreign hiring sector. It is also bent on dismantling the monopolies involved in the sector.

Home Minister Tan Sri Muhyiddin Yassin said in October that the system of recruiting foreign workers through agents or companies will be abolished soon.

He said the recruitment of foreign workers, which is currently outsourced to more than 100 companies, would be taken over by the Human Resources (HR) Ministry via Private Employment Agencies.

Even before the new year, the government’s tougher stance is beginning to bite as stricter hiring conditions deplete foreign worker supply in several sectors without locals, even with the promise of higher pay, taking up their places.

The shortage has hit the plantation and security guard sectors the hardest.

Malaysian Employers Federation ED Datuk Shamsuddin Bardan said the number of local workers beginning to take up jobs such as security guards was “not in a big way”.

Security Services Association of Malaysia president Datuk Seri Mustapa Ali there has been no new intake of foreign workers as security guards for the last eight months because Nepal, where the majority of security guards are sourced, has banned its people from going to work in Malaysia.

The ban has left the industry in the lurch because many have paid fees and agents to bring in 10,000 guards.

“We appeal to the government to expedite the entry of foreign workers from Nepal on this security guard matter. This is because the 10,000 foreign visas which have been approved by the Home Ministry based on the companies’ respective quota, their payments such as the levy have been made by these companies.

“At the moment, we don’t have enough as some have returned, some have finished their period. So now, we want to fill up with new ones, which are around 10,000,” he said.

Since the companies are not getting any supply from Nepal, Mustapa said the government should consider other source countries such as Bangladesh as a solution to the shortage.

“We have been there to see their trainings and selections for security personnel. They are currently trained for two to three months by the Bangladesh military.

“Around 40,000 of them are currently being advertised and marketed and ready to be deployed as security guards,” he said.

Securiforce Sdn Bhd ED Datuk Seri Shaheen Mirza Habib said security is a manpower business and it requires a lot of manpower to work.

“There is a very big shortage in the market now. A lot of companies are facing the same problem. Security companies are very eager and currently awaiting for the next course of action by the Home Ministry to allow us to take the Nepalese again,” he said.

Shaheen Mirza said there was, at its peak, 35,000 Nepalese security guards last year compared to approximately 25,000 so far.

The Federation of Malaysian Manufacturers (FMM) also confirmed that many companies are facing difficulties recruiting workers from Bangladesh because of the suspension of the Online Application for Employment of Foreign Workers (SPPA) due to irregularities.

In response to queries, FMM said the suspension of the SPPA and the ban by the Nepal government have left many employers with approvals and calling visas issued out of pocket.

“No alternate system or process were introduced to take over all the ongoing applications and approvals handled by the SPPA previously. These two countries have been the main source of male foreign workers for the industry,” FMM stated.

The federation added that foreign workers will continue to play an integral role in supporting the human-resource (HR) needs of the Malaysian industry, even as the nation makes the transition into a high-income economy.

“Despite all ways and means to recruit local workers, the industry is still unable to obtain the needed manpower,” it said.

The FMM said while conditions will improve with the minimum wage rule, locals are not expected to line up to fill the 3D (dirty, dangerous and difficult) jobs and the demand for foreign workers will remain.

“Local workers have increasingly higher job expectations of better pay, better and cleaner work environment, as well as time off for family and social pursuits.

“Despite the implementation of the minimum wage, employers continue to face high turnover and absenteeism among local workers and unwillingness to work shifts and overtime,” the FMM said.

Nevertheless, as the industry adjusts to global manufacturing trends such as Industry 4.0 and greater levels of automation, FMM said there could be adjustments made to the requirement of foreign workers, which will still be dependent on the industry and process type.

According to the HR Ministry, around 1.7 million foreign workers were registered in Malaysia in 2017.

The Immigration Department’s data revealed that 1,892,247 foreign workers were registered in the country as of Sept 30, with the majority from Bangladesh, Indonesia, Myanmar, Nepal and India.

Based on an independent market research report by Protege Associate, the number of registered foreign workers in Malaysia is estimated to grow at a compounded annual growth rate of 1.6% from 1.8 million in 2017 to 1.9 million in 2022.

Chin added that 2019 would not be an easy year for many foreign worker agencies, especially with varied expectations from the customers.