The business community comprising 50 industry organisations, trade associations, and chambers supports the decision by the Government, particularly the Ministry of International Trade and Industry (MITI), to defer the implementation of the 80:20 ratio which has been used as the new foreign worker quota determinant for the manufacturing sector ever since the lift of the freeze on foreign worker recruitment from February 15, 2022.
With the country transitioning to the endemic phase of the Covid-19 pandemic with the reopening of international borders but amidst global economic headwinds, a conducive business ecosystem is most critical at this juncture to ensure the sustainability of business and overall economic growth which ultimately benefit the nation and rakyat.
Thus, the business community is most thankful to MITI for taking heed of the numerous calls to urgently support business recovery by deferring by two years the condition that Malaysians must form at least 80% of the workforce in manufacturing companies before the companies are allowed to employ foreign workers.
The business community, either directly or indirectly, has been impacted by the 80:20 ruling as manufacturers with their suppliers, vendors, contractors and customers are all part of the supply chain that ultimately affects the consumers.
The imposition of this ruling has impacted the ability of our industries to meet their sales orders and meet their obligations as part of the global supply chain. It has significantly affected the ability of industries to ramp up operation capacity as well as expand operations to meet increasing global demands. Labour shortages have led to companies experiencing delays in fulfilling delivery of goods, huge backlogs, loss of existing customers and loss of potential business.
The deferment of the ruling, which we recognise is a temporary measure for two years, will certainly provide a relief to the business community as apart from the acute labour shortages, businesses are also currently under tremendous pressure to contain increasingly challenging high operating cost given the rising inflationary pressures contributed amongst others by the global supply chain disruptions due to the pandemic, geopolitical tensions, soaring energy prices, rise in in freight rates as well as local cost factors as a result of the increase in minimum wages, energy costs and the weakening of the Ringgit.
The business community does not favour foreign workers over locals and filling job vacancies with locals has always been a top priority. Moreover, employing foreign workers is not cheap and easy with the ever-changing labour policies as well as demands of international labour standards. The reality is that companies are unable to obtain sufficient supply of local workforce, especially general workers as our locals are not willing to take up such positions.
Many developments have taken place in the country, especially within the realm of the education system that enables students to go for higher opportunities with their qualifications. As such, the labour shortage at the shop floor level remains unfulfilled. Industries, especially those that are inherently labour-intensive, have gone to great lengths to employ locals for the general worker positions by offering higher remuneration and benefits. There are even companies that are willing to pay search fees for the supply of local workers.
