AT a busy cafe within the suburbs of Petaling Jaya, a buyer is hungrily eyeing his steaming plate of mee goreng and tall glass of iced espresso.
But get this, his waiter shouldn’t be the standard overseas employee that we now have all turn into so accustomed to.
Instead, it’s a robotic who’s serving him. Yes, an precise robotic which has been programmed to make its option to prospects’ tables with drinks and meals positioned on trays neatly fitted on its “body”.
Customers solely have to take their orders off these robots. And in return, they’ll even get an automated terima kasih greeting.
Observers say this is likely one of the ways in which meals and beverage corporations are utilizing to handle the present challenge of labour scarcity, significantly overseas labour, in Malaysia.
Across the nation, many different industries like plantation and manufacturing are additionally dealing with the problem of lack of staff, no because of the Covid-19 pandemic which initiated international border shutdowns in early 2020, stopping recent arrivals of overseas labour into the nation.
Notably, overseas staff in Malaysia are sometimes introduced in for low-wage, low-skill jobs or just, work that almost all locals shun.
In reality, it has been reported that Malaysia stands to lose a whopping RM20bil in income due purely to the truth that there are simply not sufficient staff to work at our oil palm plantations presently.
In the sooner days of the pandemic, glove producers have been crying out for staff to assist deal with the surge in demand for its merchandise.
Nevertheless, it’s a totally different situation right this moment for the business with demand that has dwindled since nations the world over transitioned into the endemic part and now require much less of private protecting gear.
Going high-tech: Patrons amassing their meals from a robotic waiter at a restaurant in Petaling Jaya. A sustained tempo of adoption of mechanisation, robotisation and labour-saving know-how is essential to scale back the nation’s long-standing reliance on unskilled or low-skilled overseas staff.
Still, with different industries dealing with a labour crunch, extra overseas labour is predicted to be introduced into the nation over the subsequent few months, as the federal government irons out particulars and loosens earlier restrictions put in place.
Meanwhile, questions are being raised – have we as a nation turn into too dependant on overseas staff? And why have we not gone greater up the worth chain when it comes to labour? Also, whose fault is it that we’re on this state of affairs?
Senior fellow at Institute of Democracy and Economic Affairs (Ideas) Carmelo Ferlito for one thinks that we’re not alone on this predicament.
“The shortage of foreign labour, which is a consequence of rising waves of nationalism, is affecting many countries. Singapore is experiencing the same.
“In Western countries like the United States where massive fiscal aids have been deployed, they are struggling to get their people back to work,” he tells StarBizWeek.
Sunway University economics professor Yeah Kim Leng says the problem of overseas labour scarcity is frequent amongst nations which have a excessive dependency on overseas staff.
Yeah says persevering with reliance of low cost overseas labour could be attributed to components that embody myopic imaginative and prescient, coverage slippages and and corruption.
“Based on the International Labour Migration Statistics database released this year by the International Labour Organisation, Malaysia has the third highest share of migrant workers in total employment at 15% in 2019. Singapore has the highest share at 38% followed by Brunei at 35%, “ Yeah tells StarBizWeek.
“Unofficial estimates suggest a similar or larger number of unregistered foreign workers in Malaysia.
“Over the two-year long pandemic prior to the transition to endemicity on April 1 this year, new recruitments were halted and many foreign workers that had returned home were unable to return to Malaysia, thereby compounding the foreign labour shortage,“ he adds.
Yeah says while it is encouraging that businesses are experimenting with robotics not only to reduce manpower but also to enhance efficiency, quality and cost-competitiveness, a sustained pace of adoption of mechanisation, robotisation and labour-saving technology in labour-intensive industries is crucial.
This is to reduce the country’s long-standing reliance on unskilled or low-skilled foreign workers.
“More importantly, businesses that rely on cheap foreign labour should upgrade and move up the value chain through deployment of Industry 4.0 technologies, including robotics, artificial intelligence, machine learning and data analytics,” he provides.
Yeah says with out steady upgrading to greater value-added actions and information and technology-intensive services and products, the low worth and low abilities industries might be outcompeted by different rising nations which have comparative benefit in low value labour and uncooked supplies.
Ideas’ Ferlito argues that on one hand, shortage of labour – which generates a better value of labour – is a push towards mechanisation.
“On the other hand, mechanisation is not affordable for everyone. The huge capital investment required for automation may induce some businesses to step up, while others may have to get out of business.
“Also, automation may be possible for certain functions but not for others. Automation can actually be quite anti-economical for very small businesses,” Ferlito provides.
In a nutshell, it isn’t a black-or-white situation, as there are a number of gray areas that blackboard economists, in love with their Okay versus L dichotomy (capital versus labour), are unable to know, he argues.
“An open labour market would allow each business to go towards the direction they prefer and believe will give them the most competitive advantage.
“Forced changes are likely to produce more damages than benefits.”
Each state of affairs, Ferlito provides, is totally different and competitiveness is the important thing phrase.
“Changes are good if they make a business more competitive, otherwise they just fulfill the wish-lists of politicians and intellectuals,” he says.
That mentioned, the problem of labour scarcity stays an precise drawback, particularly so at giant plantation corporations that are closely depending on overseas staff.
In the final quarter of monetary consequence reporting, a number of native corporations cited scarcity of labour as among the many the reason why they didn’t carry out nicely.
VS Industry Bhd
, a producer of digital and electrical elements was one in every of these, recording a 30% drop in its internet revenue amid the supply of much less orders.
It has since mentioned it has obtained a brand new batch of overseas staff with extra to come back within the close to future.
Plantation firm United Malacca Bhd, in the meantime, has cautioned that whereas it expects its recent fruit bunch manufacturing to extend in its present monetary 12 months ending April 30, 2023, first-quarter manufacturing might have been impacted by labour scarcity as a result of earlier labour recruitment restrictions.
Ian Yoong Kah Yin, a non-public investor who research public-listed corporations and takes up substantial stakes in these he thinks have worth, says that he views the present overseas employee scarcity positively.
“This great dependency on foreign labour and therefore inexpensive labour input is untenable in the long term. Manufacturing, construction and plantation companies should collectively reduce this addiction to cheap labour,” Yoong says.
More than simply hiring, automating
Apart from bringing in additional overseas staff and automating processes, can extra really be performed?
A protracted-time business observer believes that hiring native staff to do the roles that almost all foreigners at the moment are doing may change into a greater guess in the long term.
“It’s not entirely true that locals will not do these jobs. If you pay them well enough, incentivise them to perform well and provide them with proper housing and other benefits, I think some will want to work.
“After all, there are a few big companies in Malaysia already doing this, hiring up to 90% local people. The corporates here need to change their mindsets,” he says.
“Yes, the costs may be higher but that can be passed on to consumers. In the long-run, this could work in their favour.”
While this definitely may very well be an answer of types to the present predicament, Malaysia, based on experiences, faces one other challenge on the similar time – that of extremely expert people persevering with to depart the nation for our extra affluent neighbour, Singapore, little doubt – lured by higher prospects.
“It’s kind of like a double blow. We are experiencing a lack of foreign workers and now that borders have reopened, our highly-skilled people are starting to leave for greener pastures again.
“In fact, Singapore is not only able to attract our highly-skilled but also people who want to work in sectors like hospitality simply because of its stronger currency.
“Malaysia has to reset and now is a good time. We cannot be forever stuck in the middle-income trap or associated with low-skills,” the observer provides.
Iconic Worldwide Bhd group government director James Tan says many corporations which have plans to recommence enterprise in an enormous approach post-Covid-19 are discovering that their present workforce doesn’t assist their plans.
“Companies are struggling to hire new people across industries and are aggressively sourcing for new local workers to replace foreign workers due to the limited number of foreigners available in the market,“ he tells StarBizWeek.
He, however, stops short of saying whether or not Iconic, which is involved in the production of face masks, gloves and property development, is facing this problem at the moment.
Tan says as global standards of living increase, companies are being increasingly audited and it has become a must for them to comply with Environmental Social and Governance policies.
“With this, companies cannot hire cheap and illegal foreign workers.
“This has limited the pool of workforce available and the cost of hiring and recruiting has also risen. It is a problem for businesses which now have to look for a better solution instead of just relying on cheap foreign labour,” Tan provides.
Government position
Sunway’s Yeah says the persevering with reliance of low cost overseas labour could be attributed to a number of things that embody myopic imaginative and prescient or short-termism, coverage slippages and lack of focus, enterprise foyer energy, poor governance and corruption.
“Apart from the intractable inadequate technological innovation and breakthrough in mechanisation or automating menial tasks such as harvesting oil palm or laying constructing bricks and plastering walls in construction, the blame can be apportioned to government failure, business failure and human failure. “
He recognises that the government has had automation and digitalisation funds disbursed as grants or loans over the years and these have helped the recipients to upgrade and reduce the number of foreign workers.
Tan: While the government encourages automation, its funds attract a long list of applicants and companies will have to go through a long process.
“But the funds need to be scaled up across all industries to achieve the desired impact at the national level. The private sector also needs to be incentivised either directly via technology upgrading funds or indirectly through rising wage and competition pressures.”
Iconic’s Tan says whereas the federal government encourages automation to enhance operation effectivity, its funds entice an extended record of candidates and corporations should undergo an extended course of to acquire the funds or grants.
“Most of the grants will be in the form of tax incentives whereby they cannot be utilised immediately to invest in automation, “ Tan points out.
“Companies can only enjoy the incentives when they grow and turn profitable, so it is difficult for newly set up companies to gain immediate benefits.”
Ideas’ Ferlito says: “Governments operate outside of the market. It is not enough to have the availability of capital to invest.
“Profit expectations are key. Why did quantitative easing in the West not work? Because profit expectations were not there, and therefore no matter how much capital is available, that capital will not be turned into an investment.”
He warns that authorities funds are “dangerous”, as they could induce investments that don’t make financial sense, and subsequently create “artificial businesses”, which can collapse along with the spillover they created as quickly as authorities assist is over.
Ferlito: Huge capital funding required for automation might induce some businesses to step up, whereas others might should get out of enterprise.
