Worker shortage is one of the biggest operational issues which Japanese companies are facing now, according to a bi-annual survey on Japanese companies in Malaysia conducted by Japanese Chamber of Trade & Industry, Malaysia (JACTIM) and JETRO (Japan External Trade Organisation).
The lack of workers is particularly affecting the manufacturing sector with 66.3 per cent of companies saying that it is their biggest concern from an operation standpoint, much higher than sea/air freight concerns or late delivery of products/parts/raw materials from overseas (see table below). Instead, companies in the non-manufacturing sectors say that restriction on domestic sales activities, e.g. visiting clients, is their main grievance (52.6 per cent).
Other labour related concerns cited include rising wages for 70.4 percent of respondents (manufacturing sector) and 52.6 per cent (non-manufacturing). Firms in the manufacturing sector are also impacted by the shortage of unskilled foreign and local workers (63.3% and 62.2% respectively). Aggravating the problem is that retaining staff is a significant issue for Japanese companies in both sectors.
Expatriates in these companies are also hit with immigration issues such as the complexity and time required for the application of the Employment Pass (EP).
JACTIM and JETRO have also listed a few requests to the Malaysian government to assist the Japanese business community specifically in the matter of foreign workers, including to restart the hiring process for them, consistent policy implementation, and to relax or abolish the requirement to hire locals. [The survey was conducted between 19 January-18 February 2022, thus may not take into account the opening of applications for the recruitment of foreign workers, which the government allowed starting from 15 February]
Based on the survey, the production and operations for 35.8 per cent of Japanese manufacturing companies in Malaysia have recovered to “above pre-Covid-19 level”, while 45.3 per cent of companies in the non-manufacturing sector report conditions are at the same level as before Covid-19 first emerged.
These companies are also committed to their presence in Malaysia, with 59.2 per cent and 63.2 per cent (manufacturing and non-manufacturing) saying business remain status quo. Some (at 24.5 per cent and 28.9 per cent respectively) are even considering expansion and new business development.
Among the attraction for a business operation in Malaysia includes the level of English language proficiency among workers, security, and the pro-Japan environment.
The online survey received 234 responses, involving 140 companies in the manufacturing sector and 94 non-manufacturing companies.
