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THE ongoing labour shortage in Malaysia has been widely talked about and reported.
Over the last reporting season, the effects of the problem became even more visible. A number of listed companies reported declining profits, and squarely attributed it to the labour crunch they are facing.
Most of them suffered from the ceasing of operations due to lockdowns, combined with the shortage of foreign labour.
What is interesting is that many of these companies attempted to hire local workers to replace foreign workers. But alas, this had little positive impact.
For instance, construction company Bina Puri Holdings Bhd’s revenue dropped close to 40% to RM46.42mil in the first quarter ended Sept 30 (Q1’22), which was partially dragged by a labour shortage that slowed down activity at its construction sites.
Plantation group Harn Len Corp Bhd also announced in its latest filing to the stock exchange that it experienced crop losses due to a manpower shortage, which remains unsettled.
Similarly, plantation giant Sime Darby Plantation Bhd also announced in its latest quarterly results that acute labour shortages compounded by movement restrictions have challenged the group in the last 21 months.
In a quandary: Hotel workers in action. The situation in the industry, which relies heavily on manpower, is worrying, with employees demanding higher salaries.
Notably, in July this year, former Plantation Industries and Commodities Minister Datuk Dr Mohd Khairuddin Aman Razali projected that the labour shortage issue is expected to cause RM10bil in losses annually due to unharvested ripe oil palm fruit.
The lucrative glove industry has also experienced a revenue shortfall of around RM15bil with a shortage of workers of around 20,000 to 30,000, says Anthony Dass, who is the chief economist of AmBank Group.Anthony DassElectronic manufacturing services firm ATA IMS Bhd, in the news after its main client Dyson pulled out its business after allegations of labour mistreatment, had earlier blamed manpower shortages for the drop in the group’s revenue which it recently reported.
It is worth noting that the government has frozen the hiring of foreign workers since the beginning of the pandemic.