Workers shortage hamper productivity, recovery

The turnover rate for locals is high in several sectors

by AZREEN HANI / Pic by HUSSEIN SHAHARUDDIN

THE issue of workers shortage continues to hamper business productivity and recovery, which could lead to lay-offs as employers try to minimise operation losses.

Industry players told The Malaysian Reserve (TMR) that despite having offered an attractive pay package, Malaysians are not willing to pick up the offer and some will not last long, resulting in high turnover rate.

“The delay in the foreign workers coming in will most certainly have a significant impact on productivity as industries would face challenges in meeting their orders and sales, and this would most certainly hamper the industry’s business sustainability and recovery journey,” Federation of Malaysian Manufacturers (FMM) president Tan Sri Soh Thian Lai said.

“At the same time, employers continue to face difficulties in filling the shortages in the unskilled general worker category with local workers not keen on certain jobs and industries, especially in the ‘3D’ sectors,” he added.

With the freeze on foreign worker recruitment lifted from Feb 15, 2022, industries have started the application process.

“However, it would take a couple of months before workers can actually start coming in as there are several stages to go through in the application process which we hope could be shortened where possible.

“We have been informed that due to some of the unresolved issues with the source countries, this might delay the process of the workers coming in,” he explained.

FMM hopes for greater clarity and consistency in the process flow of the application process for foreign workers towards expediting approvals and entry of the workers in supporting the industry’s manpower needs.

“We also call on the government to quickly resolve all the outstanding issues in the memorandum of understanding (MoU) with the source countries so that workers could start coming in as soon as employers get their applications approved by the One-StopCentre at the Human Resources Ministry,” he added.

According to him, employers have targeted to bring in workers within three months if not sooner.

“So, hopefully, all parties can come to terms in settling issues in the MoU immediately,” said Soh.

TMR previously reported that some businesses, especially mamak restaurant operators, have halted their plans to operate 24 hours, despite the government’s nod since April 1, due to the workers shortage.

KK Super Mart convenience store owner Datuk Seri Dr KK Chai told TMR that while its business is running around the clock, it does impose heavier burdens to the staff and its operation in general.

“Convenience stores like us have to be running 24-hour because that is what sets us apart from other stores. Still, we are finding it hard to do so, hence, why we wish for foreign workers’ intake to be expedited,” he said.

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

“We have seen that the turnover rate is high. It is quite disappointing as we are offering and working on attractive pay packages and benefits” he added.

Chai said KK Super Mart may expand up to 120 stores nationwide this year, but the workers shortage is slowing down the plan.

Meanwhile, EMIR Research head of social, law and human rights Jason Loh said offering the minimum wage is not enough to address the issue of workers shortage.

“A salary hike should be on the offering — where the return on investment far exceeds the percentage of wage increment. Businesses should treat salary hikes as a form of investment — covering short-, mediumand longterm horizons,” he said.

The think tank is calling for the minimum wage to be reconceptualised as a starting point instead of a benchmark.

According to him, if the current shortage prolongs, it may have a knock-on effect on the viability of the business concerned leading to a possible shutdown of operations and, by extension, lay-off of workers.

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

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