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Malaysia facing labour shortage as economy recovers

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The NCCIM reported a shortage of 77,721 workers in Malaysia, with the manufacturing sector requiring up 77.1 per cent of the total manpower needed. THE STAR

Malaysia facing labour shortage as economy recovers

There are many jobs available for Malaysians as employers urgently require workers in certain critical sectors, such as manufacturing and construction, as the economy recovers from the pandemic.

Employers are urging the government to resolve labour woes quickly in these sectors as the economy recovers after almost two years of on-off operations.

National Chamber of Commerce and Industry of Malaysia (NCCIM) president Low Kian Chuan said the worker shortage was caused by expiring foreign workers’ permits, poaching of workers by other sectors as well as the “open and shut” standard operating procedures during the various movement control orders.

The NCCIM’s Quick Take Survey, covering 835 companies, reported a shortage of 77,721 workers, with the manufacturing sector requiring up 77.1 per cent of the total manpower needed, followed by the construction sector (11.2 per cent) and other services (8.9 per cent)

Data compiled from industry associations show that plantations require 70,000 foreign workers, rubber glove industry (25,000), furniture (30,000), construction (200,000), manufacturing (25,000), services (45,000) and plastics (6,293), he said.

“The number of foreign workers now stands at 1.1 million, down 800,000 from 1.9 million in 2018.

“In August 2021, the number of unemployed persons reduced to 748,800 persons compared to 778,200 in July.

“This means that if a new addition of about 250,000 unemployed persons were to fill up the vacuum left by foreign workers, there remains a shortfall of at least 500,000 workers assuming some businesses have right-sized due to the pandemic.

“We must also take into account underutilisation of labour caused by time and skills mismatch with the labour market,” said Low, who is also Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM) president.

In June last year, human resources minister Saravanan Murugan had announced a freeze on new intake of foreign workers until the end of 2020, which intended to reduce their numbers as well as give locals priority in securing employment.

Last month, he said the freeze was extended until December 31.

Low said if the problem is not addressed, it would stifle business recovery, hamper production to meet backlogged orders and create uncertainty for new orders.

Many hard-hit industries such as tourism, retail, non-essential sectors operated by micro-, small- and medium-sized enterprises (MSME) are still working hard to recoup their revenue loss and repair their balance sheet, added Low.

“Businesses still face many cost-related challenges; which include cash flow, the rising cost of raw materials, sky-rocketing freight costs for exporters and importers as well as shortage of manpower.

“We hope the government under Budget 2022 will continue to provide some operating costs relief measures for badly-hit sectors such as wage subsidies, hiring incentives, rental relief and targeted loan repayment assistance as well as tax treatment.

“Measures to ease the cost of raw materials include the reduction of import duties and excise duties on intermediate inputs, machinery equipment and building materials as well as the provision of Market Development Grants to cover the logistic costs of exporters and importers,” he said.

Low added that while the government is in the process of allowing the intake of 32,000 foreign workers for the plantation sector, a stop-gap solution can also be worked out to plug the shortages in other major economic sectors to facilitate their recovery.



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