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Business community welcomes deferment of 80:20 ratio for foreign workers

FMM In The News: BORNEO POST, KUCHING, Tuesday, July 19, 2022 - The business community welcomes the government’s decision to defer the implementation of the 80:20 ratio for the new foreign worker quota determinant for the manufacturing sector, said the Federation of Malaysian Manufacturers (FMM).

FMM president Tan Sri Datuk Soh Thian Lai said a conducive business ecosystem is most critical to ensure the sustainability of business and overall economic growth with the country transitioning to the endemic phase and the reopening of international borders. 

“The business community, either directly or indirectly, has been impacted by the 80:20 ruling as manufacturers with their suppliers, vendors, contractors and customers are all part of the supply chain that ultimately affects the consumers.  

“The imposition of this ruling has impacted the ability of our industries to meet their sales orders and meet their obligations as part of the global supply chain,” he said in a statement yesterday.  

Soh pointed out labour shortages had led to companies experiencing delays in fulfilling delivery of goods, huge backlogs, loss of existing customers and loss of potential business.

“The deferment of the ruling, which we recognise is a temporary measure for two years, will certainly provide a relief to the business community as apart from the acute labour shortages, businesses are also currently under tremendous pressure to contain increasingly challenging high operating cost given the rising inflationary pressures contributed amongst others by the global supply chain disruptions due to the pandemic, geopolitical tensions, soaring energy prices, rise in freight rates as well as local cost factors as a result of the increase in minimum wages, energy costs and the weakening of the Ringgit,” he said.

According to him, the business community does not favour foreign workers over locals.

He said filling job vacancies with locals had always been a top priority.

“Moreover, employing foreign workers is not cheap and easy with the ever-changing labour policies as well as demands of international labour standards.

“The reality is that companies are unable to obtain sufficient supply of local workforce, especially general workers as our locals are not willing to take up such positions,” he said.

He noted that many developments had taken place in the country, especially within the realm of the education system that enabled students to go for higher opportunities with their qualifications.  

As such, he said the labour shortage at the shop floor level remained unfulfilled.  

“Industries, especially those that are inherently labour-intensive, have gone to great lengths to employ locals for the general worker positions by offering higher remuneration and benefits.  

“There are even companies that are willing to pay search fees for the supply of local workers,” he said.  

Soh asserted it must also be recognised that not all traditional labour positions can be replaced with automation and as such, there will continue to be a demand for labour to fulfil this manpower requirement.  

He opined that the demand for shop floor workers could not be equated to the lack of efforts by industries to automate.  

“Actually, the process to reduce dependence on foreign workers through automation is already taking place but it is a gradual process that must continue to be supported by the government,” he stressed.  

Soh pledged that the business community will continue to do their part to ensure a healthy economic growth for the nation.  

At the same time, he said they looked forward to similar support from other government ministries and agencies to emulate the wisdom and business-friendly initiatives of the Ministry of International Trade and Industry.  

“This is so that together, we will weather this challenging period as Keluarga Malaysia,” he added. 

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