FMM: Acute manpower shortage hampering economic recovery

An acute shortage of manpower is hampering economic recovery, says the Federation of Malaysian Manufacturers (FMM).

It urged the government to consider temporarily lifting the ban on foreign workers as a short-term measure.

"FMM appeals to the government to consider the plight of manufacturers that face acute manpower shortages to lift the current freeze on foreign workers to fill gaps in the unskilled general worker category as a short-term measure to assist industries with business revival to support economic growth for the country.

"It is feared if urgent manpower needs are not addressed quickly, it could derail the recovery of the industries including their ability to meet orders in hand and expansion plans.

"Consequently, it would also impact the ability to fulfil supply obligations as part of global supply chains, given that Malaysian is a key manufacturing and supply chain hub in the region," said FMM president Soh Thian Lai (above).

Soh thanked the government for reopening the economy after most firms have fully vaccinated their employees, pointing out many were in dire straits during the Covid-19 lockdown.

"However, many are now faced with new challenges, especially employers in the manufacturing sector, who are facing acute manpower shortages both at the skilled and unskilled level, but more critically in the unskilled level, which is hampering the pace of business recovery," he said.

Soh said this is supported by FMM's Survey on Manpower Needs conducted in early October involving 252 firms.

He said the report showed there was a shortage of some 22,000 workers comprising 14,000 low/unskilled workers and 7,000 skilled workers including technicians, machinists, and engineers.

"The number of worker shortage would be more than 22,000 considering that the quick survey only captured the responses of 252 companies while FMM has a total membership of over 3,500 manufacturing companies," he said.

He added that the top manufacturing sub-sectors facing manpower shortages are electrical and electronics, food and beverages, chemicals and chemical products, fabricated metal, and rubber products.

Sharp drop in manufacturing sector workers

Soh said the National Chamber of Commerce and Industry Malaysia (NCCIM) which covers members from five constituent national chambers including FMM had also conducted a similar survey in October involving 835 manufacturing firms.

It found that there was a shortage of 77,721 workers of which 77.1 percent was for the manufacturing sector, 11.2 percent for the construction sector, and 8.9 percent for the service sector.

Soh said this was partly contributed by a sharp drop in foreign workers in the manufacturing sector since the Covid-19 pandemic, from an estimated 697,124 in 2019 to 391,831 in 2021.

He said the drop was mainly attributed to workers whose permits and terms of employment have expired and have returned home, coupled with the freeze on new employment of foreign workers.

The FMM estimates manufacturing industries need to be replenished with some 600,000 foreign workers next year to fill the gap as well as to cater for new investments.

Soh added that attempts to hire locals for such jobs remain a challenge.

"Employers in manufacturing continue to face difficulties in sourcing for locals to fill the shortages in the unskilled general workers' category arising from the current freeze in new recruitment of foreign workers.

"Industries have no choice but to rely on foreign workers as locals are not keen on certain jobs and industries, especially in the 3D (Dangerous, Dirty, Difficult) sectors.

"The industry is however cognisant of the fact that in the long-term, concerted efforts have to be taken to reduce the dependence on foreign workers including structural policy changes which could otherwise impact the competitiveness of Malaysia as it moves to a high-income nation focusing on high technology and high value-added products and services," he said. - Mkini