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FMM appeals to government to lift freeze on foreign worker recruitment to support business recovery

FMM In The News: THE EDGE MARKETS, KUALA LUMPUR, Wednesday,  April 7, 2021 - The Federation of Malaysian Manufacturers (FMM) has called on the government to lift the freeze on foreign worker recruitment for the manufacturing sector to support the pickup in business and assist the industry in its business recovery as orders and production start to gain momentum.

FMM president Tan Sri Soh Thian Lai said in a statement that FMM appealed to the government to allow the intake of foreign workers for export-based companies and companies, especially the small and medium enterprises (SMEs) that support the export market.

"The recently released FMM-MIER Business Conditions Survey 2H2020 revealed that while manufacturers continued to be cautious with their outlook, there were indications of improvements," he said.

"FMM thanks the government for the continued support provided through the various stimulus and economic recovery packages which have assisted businesses to overcome the challenges faced as a result of the pandemic, in particular cash flow constraints and meeting fixed capital costs including employment costs," he added.

He also noted that sustaining operations in the past year has indeed been challenging for many.

"The industry over the past year has had to repatriate workers due to expiry of the workers' permits as well as some had their existing workers stuck at their home country when the global lockdown was instituted and have since not been allowed to reenter the country due to the pandemic and closure of borders."

"While the industry endeavours to fill those vacancies with locals, foreign workers are usually employed to fill up general operator-level jobs which employers are finding difficulty to be filled by locals due to the nature of the job or industry and job expectations of locals," he said.

At the same time, he said, manufacturers have started exploring more proactive deployment of digital and automation technologies to lower the worker density in their operations including reducing dependence on foreign workers.

"However, the switch to more automated processes and adoption of digitalisation will take time and substantial investments and, in the meantime, businesses have to continue to sustain and grow and thus their labour requirements must continue to be supported," he added.

He also said, manufacturers, especially exporters and the supporting SME businesses' recovery initiatives must continue to be backed with the necessary initiatives including support on manpower requirements, which could otherwise derail business recovery or land the industry in deeper problems when they are not able to fulfil their orders during this critical period.

"With that said, FMM has always advocated for the need for the industry to gradually reduce their dependence on foreign workers with the changing manufacturing landscape as well as for the nation to transition into a high-income economy.

"However, in doing so, the government must have in place a more holistic, fair and transparent management and administration of foreign workers in order to facilitate this transition to take place gradually via a market-based mechanism, which would serve as a natural mechanism for industries to re-evaluate their business models," he said.

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