Fast-paced economic growth leading to poor standards – employers

Increased opportunity resulting from fast-paced economic growth is leading to a loss of standards and quality because the problems in the labour market are “critical,” business owners have told The Shift News.

Echoing the concerns raised by the Malta Employers Association, they said contracts won could not commence because companies were unable to find the human resources needed.

“We have three contracts that the company worked to acquire, but we haven’t been able to start even though we got the go-ahead weeks ago. We simply can’t find the workers. We’ve been interviewing people non-stop but we can’t find the skills we need,” a CEO in the service industry said.

Increased opportunity is leading to a loss of standards and quality. “It’s pointless to have an abundance of opportunity if you can’t fulfil it. It’s leading to a deterioration of standards because people are cutting corners otherwise you can’t move forward. Then you’re faced with the choice of competing or bowing out. It’s becoming impossible,” he added.

From the tourism to the transport sector, company owners who spoke to The Shift News on condition of anonymity have expressed similar concerns. Companies are losing money on contracts they cannot meet, and that starts to affect other contracts as the companies struggle to meet their obligations. Recruitment has become an additional burden on already scarce resources.

There are over 40,000 foreign employees in the private sector, almost 30% of the private sector labour force, but this is still far from enough to cope with economic growth, according to the Malta Employers’ Association president Dolores Sammut Bonnici.

On Friday, she described manpower as being “critically scarce”, saying the situation was exacerbated by the “unwarranted recruitment” in the public sector during 2017, when the general election was held, as many companies reported a drain on their manpower to join the public sector.

Sammut Bonnici said there were shortages across all grades and economic sectors. “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,” she told the MEA annual general meeting.

There is a rising tendency for foreign employees, in all economic sectors, to leave Malta after a few months as they are finding the cost of staying here too high, according to a focus group conducted recently by the MEA with researchers from the Ministry for Family, Children’s Rights and Social Solidarity.

Business owners are aware of this problem and trying to find ways to address it. “Increasingly, we rely on foreign workers, but the turnover rate is so high it’s almost impossible to get someone trained to the right level to continue to offer a quality service. They leave before you can get them there, and the reason most of them give us is that they can’t cope with rent prices,” an operator in tourism industry said.

Different sectors are discussing how to raise wages, but this necessarily creates a ripple effect on increase in costs along the sector’s line. Sammut Bonnici said ‘populist measures’ such as an increase in the hourly wage could affect competitiveness.

In a hard-hitting editorial on Corriere di Malta on Saturday, Dario Morgante questioned the point of economic growth if people’s quality of life could not be improved. Dorgante said Malta is richer, but poorer as a result of its “formidable economic growth” that is draining its human resources while its natural resources are sacrificed at the altar of unrestrained construction.