Expect shake-up in labour allocation post-MCO, say economists

The distribution of labour might change once as businesses struggle to reopen once the movement control order is lifted.

PETALING JAYA: Economists say a shake-up in the distribution of labour could be on the cards once the movement control order (MCO) ends and the economy reopens, as the country works towards a “new normal” following the Covid-19 pandemic.

The virus, which is predominantly transmitted by respiratory droplets, has already caused an upheaval within the workforce with employees told to work from home and strict social distancing in place.

Although it remains to be seen how many businesses will resume operations once the MCO is lifted, Khazanah Research Institute’s deputy director of research Christopher Choong said there could be opportunities in areas such as logistics, groceries, food retail and the digital ecosystem in addition to healthcare.

He said government initiatives such as the Employment Retention Programme, Employee Insurance Scheme and Wage Subsidy Programme could be used to identify industries which require human capital.

“Labour reallocation has to work in tandem with workforce retention and protection programmes such as these,” he told FMT.

“We know who the ‘surplus labour’ are through these programmes, so the question is whether we can get companies that have seen a surge in demand to recruit via these platforms.”

The MCO, implemented on March 18, has seen a sharp spike in unemployment with a recent survey by the statistics department showing the self-employed among the most heavily hit.

Once the order is lifted, Choong said, benefits could be used to incentivise temporary hiring and workforce sharing.

“Job matching and training platforms can be consolidated, and vacancy listings can be boosted,” he said, adding that several low-to-mid skill sectors would need only minimal training.

Goh Lim Thye, a senior economics lecturer at Universiti Malaya, said conventional food stalls and farmers would likely shift their focus to online sales.

He also predicted that e-commerce giants such as Lazada and Shopee would expand their operations, creating job opportunities in areas related to digitalisation.

He suggested that the government set up a centralised information centre with a platform to receive feedback from industries and identify those that are shorthanded.

Ideally, he added, the government could provide incentives for training but only if it had sufficient budget.

“Otherwise, the government can incentivise corporations to sponsor training programmes under their corporate social responsibility programmes,” he said.

Carmelo Ferlito of the Institute for Democracy and Economic Affairs meanwhile said those left unemployed by the MCO would naturally gravitate towards sectors where jobs are available.

He gave the example of e-hailing drivers who switched to food deliveries following a drop in passengers.

Noting the natural flow of such changes, he said the process would become difficult and bureaucratic if the government intervenes.

“I think the only effective thing the government can do is to have a sound platform for making job opportunities clearly visible,” he told FMT.

“Let the people do the rest.”

But even with training programmes, he said, the composition of human capital would need to be reckoned with.

“A waiter cannot turn into a car mechanic overnight. So individual skills matter.”

The MCO, implemented to curb the spread of Covid-19, was initially supposed to end on March 31. It was later extended to April 14, and most recently to April 28. - FMT