Delay 80:20 local-to-foreign workers mandate, says Samenta


THE Small and Medium Enterprises Association of Malaysia (Samenta) is seeking for the government to delay the implementation of the 80:20 local-to-foreign workers ratio.

Its chairman Datuk William Ng (picture) said many small and medium enterprises (SMEs) are not prepared for this since they are already facing many challenges such as rising costs of raw materials, huge jump in minimum wages and a debilitating labour crunch.

“If the 80:20 quota is implemented as scheduled, we expect further closure of businesses.

“Give us time to recover to pre-pandemic level and automate and digitalise our operations before implementing such massive policy changes, which is akin to a death knell for our labour-intensive SMEs,” he said in a statement yesterday.

Currently, the industry is facing a shortage between one million and 1.5 million foreign workers, especially for 3D (dirty, dangerous, difficult) jobs.

“Even with the increase of minimum wage to RM1,500, many SMEs are having a difficult time getting locals to work in small factories, but it is still wrong to assume that SMEs prefer foreign labour to our locals,” Ng said.

He added that hiring foreign workers is more costly now.

“Unlike larger factories that are better automated, SMEs generally require more staffs on the shop floors. In fact, this is one of the reasons why multinationals outsource their more labour-intensive work to SMEs. 

“Samenta is looking at helping our members and SMEs in general to quickly automate and digitalise, but this goes beyond technology and requires mindset and process change that will take time,” he said.

He also said despite transitioning to endemicity, there is still shortage of labour as demand increases which is slowing down the country’s economic recovery process.

Many of these orders are now taken up by countries such as Vietnam and Indonesia.