When recruitment gets tough

Addressing the Malta Employers Association Annual General Meeting recently, President Dolores Sammut Bonnici remarked:

“The shortage of manpower is indeed a problem to many companies. The thrill of being awarded a new contract is very short lived when you come face to face with the difficult task of recruiting additional staff. There are shortages across all grades and economic sectors - manual workers, clerical staff, supervisors, drivers, and many other occupations even at graduate level. Recruitment ads hardly get any response at all. This situation has worsened as a result of unwarranted recruitment in the public sector during 2017, as many companies report a drain on their manpower to join the public sector.

“In this situation, employers are addressing their human resource requirements through engaging foreign labour, inhouse training, or poaching. Engaging third country nationals requires a process which can be laborious. MEA has worked with Identity Malta to expedite as much as possible applications for TCNs, but this has not always been possible due to an increasing number of applications. We have organised a number of outreach sessions with Identity Malta to provide employers the opportunity to put forward their difficulties on a one to one basis. These sessions have been successful and we have received very positive feedback about them. Nonetheless, companies are still faced with cases whereby permits take more than four months to process. Employers are also facing challenges of a multicultural labour force. Currently, the number of foreign employees in the private sector is approaching 30% of the private sector labour force.

“Inhouse training is offered by many companies but not all employers, particularly microbusinesses, have the capacity or facilities to provide such training. Employers can also face the frustration of training personnel who leave for alternative employment.

“Poaching could be an immediate solution, but at national level it is creating wage inflation. Employers are all in favour of increasing wages as long as such increases are matched with productivity, but wage inflation resulting from labour shortages erodes competitiveness, especially in the export sector.

“These labour shortages, besides raising operational costs, are also becoming stressful for employees, due to more demands to work overtime and longer hours in general. On a positive note, the increase in female participation, together with a growing segment of retired persons opting to remain in employment are adding to the labour supply.

“The labour market situation is affecting employers in other ways. The pressure on the property and rental market is forcing prices and rates to increase. This is generating demands for higher wages to compensate for these rates. An issue being faced by employers is a rising tendency that foreign employees, in all economic sectors, are leaving Malta after a few months in employment as they are finding the cost of staying here too high. A focus group which we conducted recently with a group of researchers from the Ministry for Family, Children’s Rights and Social Solidarity has confirmed this. Employers cannot compensate for an inflated property market – compensation for labour can only be linked to productivity and value added.”

We make our own these considerations and urge the social partners to discuss in depth these issues and to come up with proposals.