The EY conference on Malta’s competitiveness identified weaknesses in the labour market as one of the main challenges the island is and will be facing in the coming years. Forty-one per cent of those interviewed in the competitiveness survey identified talent shortage as the most serious threat that could impact their plans to invest here.

A growing economy by definition creates supply pressures on the local labour market. Some of this pressure can be eased by supplementing the local labour force with temporary imported workers. Defining what is temporary in the labour market is not so straightforward.

The EY conference heard Helga Ellul, CEO of a consultancy company, say that all were aware of the fact there were not enough people to fill the needs of industries. Neither did the right skills exist.

In the short term this weakness can be mitigated by importing labour. But it seems there is no proper plan on how the government will rationalise the importation of labour. This is not only giving rise to uncertainty among investors but also causing social hardships to locals who have to compete with foreign residents for affordable housing.

Clyde Caruana, head of JobsPlus, warned that the economy needs 12,500 new workers next year but 2,000 vacancies will not be filled. He is concerned this will result in a loss of €60 million in the economy.

Surely, there are more serious long-term concerns behind this shortage of labour. From the 11,000 jobs created last year, only 2,500 were filled by Maltese.

These staggering statistics beg the question of what strategic objectives the government has for Malta’s economic growth. Are we likely to end up like some Middle East countries where economic growth is mostly dependant on imported labour? What plans are in place to overcome the skills gap? Why is our educational system struggling to address this skills gap? What are the likely effects of imported skilled labour on wage inflation?

With Malta having one of the worst demographic problems in the EU, the government needs to reform drastically its educational and labour market strategies. Ronald Attard, managing partner at EY, made a very valid comment during the conference. He argued that Malta could look forward to the future with optimism as long as it had the courage, the foresight and the political will to move along with a changing world.

Political will that helps to address the present labour shortage includes a steely determination to reform the educational system so that it becomes effective in giving workers the skills the knowledge economy of today and tomorrow demands. The Chamber of Commerce, Enterprise and Industry urged educational policymakers to promote work-based learning and career guidance. Ms Ellul appealed to businesses to involve themselves much more in the education and formation of young people.

Political will to tackle labour market shortages also includes the banning of ageism by letting those experienced workers who want to continue working beyond the statutory retirement age to do so. They should even be encouraged to remain active so they can mentor younger workers to gain experience.

Finally, political will means that politicians do not continue to fill the ranks of the public service with workers who use their clout at election time to get a public service job that produces little wealth.

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