Employers have warned Malta’s economic competitiveness is being dented by the rising cost of living, driven upwards by an “inflated property market”.
They have also expressed concern that the existing workforce shortage is getting worse, because the option of recruiting foreign employees was becoming less viable.
Addressing the Malta Employers’ Association’s annual general meeting, president Dolores Sammut Bonnici hailed Malta’s record economic growth but cautioned that success was posing challenges in terms of recruitment.
The problems were being experienced despite the presence of 40,000 foreign workers, who accounted for about a third of the entire private sector workforce.
“The thrill of being awarded a new contract is very short-lived when you come face-to-face with the difficult task of recruiting additional staff,” Ms Sammut Bonnici remarked, adding that the shortage was being felt across the board and in all grades, not just for manual workers.
She hit out at the government, saying it was partly to blame for the situation in the wake of what she described as “unwarranted” recruitment in the public sector last year. The recruitment had resulted in a drain in the private sector, she argued. Under the circumstances, poaching employees from other entities was one of the few available options on the table, albeit at a cost.
READ: Employers warn of 'critically scarce' labour market
“Wage inflation resulting from labour shortages erodes competitiveness, especially in the export sector,” she said.
Foreign employees in all sectors are leaving Malta after a few months in employment, as they are finding the cost of staying here too high
On a positive note, Ms Sammut Bonnici said that the increase in female participation and the increasing number of retired persons still in employment were offsetting part of the shortage.
Ms Sammut Bonnici said higher prices in the property market were generating demands for higher wages to compensate.
“An issue being faced by employers is a rising tendency that foreign employees in all economic sectors are leaving Malta after a few months in employment, as they are finding the cost of staying here too high,” she said.
The trend had been confirmed on the strength of research carried out in collaboration with the Family Ministry, she noted.
“Employers cannot compensate for an inflated property market. Compensation for labour can only be linked to productivity and value added,” she added.
Malta’s employers’ other concerns included the government’s pledge to compensate workers for public holidays falling on weekends. They feared this would increase workplace absences and hit competitiveness badly.
“We cannot allow populist measures to negatively impact the long-term sustainability of business, even if they may be affordable to a certain extent under current economic circumstances,” Ms Sammut Bonnici said.
Touching on the issue of family-friendly measures, the MEA president pointed out that research conducted by Jobsplus had concluded that 90 per cent of employees in the private sector who asked for such concessions had been accommodated.
Yet this could not be treated as an automatic right that disregarded the sustainability and circumstances of specific enterprises, she said.
The engagement by the government of people on a position-of-trust basis was also raised.
“One cannot point a finger at the private sector to accuse it of discriminatory practices when, at the same time, such people are being engaged without any explanation as to their credentials, remuneration packages or what they have actually achieved since they were engaged,” she warned.
“If we want to be respected as a country with a reputation for good governance, these issues, together with others related to direct orders, for example, have to be duly thrashed out and approached in a more transparent manner,” Ms Sammut Bonnici said.