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FMM: M'sia needs to replenish over 600,000 foreign workers by 2022 to overcome current acute manpower shortage that could derail its economic recovery

FMM In The News: THE EDGE MARKETS, KUALA LUMPUR, Saturday, December  4, 2021 : The Federation of Malaysian Manufacturers (FMM) said in a statement Saturday that the country needs to replenish over 600,000 foreign workers by next year in order for the industrial sector, especially export-based companies, to overcome the current acute manpower shortage it is facing, to bring their businesses back to pre-pandemic levels.

Hence, it is again calling on the government to lift the current freeze on foreign workers so that gaps in the unskilled general worker category can be resolved to help with their business revival to support economic recovery.

"It is feared that if the urgent manpower needs are not addressed quickly, it could derail the recovery of the industries, including their ability to meet their orders in hand and expansion plans," said FMM president Tan Sri Soh Thian Lai.

"Consequently, it would also impact the ability to fulfil supply obligations as part of global supply chains, given that Malaysia is a key manufacturing and supply chain hub in the region and the significant role and contribution of manufacturing to the economy. It would also have serious implications for the sustainability of industries," Soh said.

The seriousness of the manpower shortage is supported by feedback from industries via two recent surveys, Soh said, referring to FMM's quick survey on the manpower needs of 252 manufacturers in early October, which found an overall shortage of close to 22,000 workers among them.

The survey found a shortage of about 14,000 workers in the low/unskilled general worker category and some 7,000 skilled general workers, technicians, machinists and engineers. It also found that E&E, food and beverages, chemicals and chemical products, fabricated metal and rubber products are among the top five manufacturing sub-sectors most affected by the shortage.

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

He also noted that a similar National Chamber of Commerce and Industry Malaysia survey, also done in October but covering 835 companies, found an overall shortage of 77,721 workers, with those in the manufacturing alone requiring 77.1% of that, followed by construction at 11.2%, and other services at 8.9%.

Based on the employment trend of foreign workers by sectors, Soh said there has been a 44% drop in foreign workers in the manufacturing sector to 391,831 foreign workers now, compared to 697,124 foreign workers in 2019.

This drop, he said, is mainly due to workers whose permits and terms of employment had expired during the pandemic and have since returned home.

The industry, he further said, is cognisant of the fact that in the long term, concerted efforts have to be taken, including structural policy changes, to reduce the dependence on foreign workers, 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.

But he stressed that employers in manufacturing continue to face difficulties in sourcing for locals to fill the shortages in the unskilled general worker 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. This short-term measure is critical to the revival of businesses and the economy," Soh added.

In the face of this, Soh urged for fast action from the government to resolve the issue.

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