The need to find the right personnel has emerged as a key factor in Malta’s future, with the EY Attractiveness Survey for 2016 showing this as the main concern.
In all, 79 per cent of foreign direct investors ranked this as the main focus area if Malta is to remain globally competitive, 16 percentage points higher than the 2015 survey. This was eight points higher than the second ranked focus: support for high tech industries and innovation.
The report found that demand for skilled labour outstrips supply in a number of sectors. Less than half (45 per cent) of companies said they were able to find the required specialised skills – although this is balanced out by the fact that there is a high level (87 per cent) of retention of specialised personnel.
Of course, the frustration of finding the right personnel is only one aspect of a tight labour market: it also puts pressure on wages. Although two-thirds of the respondents still find wage levels to be attractive, they are increasing.
The gap between demand and supply could have an impact on Malta’s growth: 51 per cent of forms said that their expansion plans depended on filling the gap – while 30 per cent said that this did not affect them.
EY country managing partner Ronald Attard highlighted the problem in his foreword, noting that for the current dynamic economic sectors to thrive “the right level of stability, a competitive legislative regime and the right human resources have to remain the top priorities of public and private sector decision-makers.
The EY survey found that Malta’s most attractive FDI parameters are its corporate taxation – 91 per cent
“But do current investors believe this is happening? Less than half the respondents said they found the specialised skills they required on the local market and only just over half of them believe Malta’s legislation environment offers a competitive edge. This is down from three out of every five the previous year,” he wrote.
“Are we becoming victims of our own success? Could this be an opportunity in itself?” he added when addressing the packed room at the Westin.
The importance of education was also taken up by the president of the Malta Chamber of Commerce, Enterprise and Industry Anton Borg who said in his speech: “The future is now, yet recent findings by the National Commission for Further and Higher Education have revealed that the country’s educational system dwells in yesterday’s past. It is not supplying the labour market with the skills in highest demand while producing among the highest early school leaver rates in Europe and worrying pass rates in core subjects. The modern Maltese forward-looking economy is in urgent need of significant investment in the education sector coupled with an overhaul of archaic practices and teaching methods as well as outdated and ill-informed career advice.”
The survey also looked at what could be done to solve the problem and, by a huge margin, the suggested policy action was to introduce skill sets for the new economy, such as coding and robotics, followed by the development of national frameworks to encourage international internships or work placements for Maltese nationals, and wider opportunities for relevant work placements as part of higher education syllabi. The fourth suggestion was to introduce a skills gap monitoring board.
The survey found that Malta’s most attractive FDI parameters are its corporate taxation (91 per cent), the stability of its social climate (88 per cent) and the stability and transparency of its political, legal and regulatory environment (70 per cent).
Since the last survey, EY spearheaded policy proposals in five sectors – FinTech, commodity trading, Malta as a gateway for Asian eCommerce, logistics and reskilling regular immigrants.
In the near future, it will be launching a think tank with the exclusive task of delving into what action should be taken in order to enhance further Malta’s economic future.
“We would like to delve into what the education of the future, and for the future, would look like. You will soon see that the challenge of finding the right human resources is paramount to investors. We will, therefore, endeavour to see what the best paths from the classroom to the boardroom are,” Mr Attard said.