Shortage of skilled workers is major business constraint

 

Kuala Lumpur 27 March 2008

Malaysian business growth is suffering from a shortage of skilled workers, with 42 per cent of businesses reporting it as a major constraint.  This is above the global average of 37 per cent but lower than the regional average of 47 per cent. 

 

 

 

 

 

 

 

 

 

 

For the first time this century, regulations and red tape have been replaced by workforce issues as the number one problem holding back Medium to Large Enterprises (MLEs). These are the findings of the latest International Business Report (IBR).  37% of MLEs report the availability of a skilled workforce as a constraint on business development, up from 34% in 2007.  The number of businesses reporting regulations and red tape has dropped from 37% to 31%. However, for Malaysia it remained unchanged at 28% for both years.

SJ Grant Thornton Managing Partner Dato’ N. K. Jasani, says: "Despite the exploding global population and more people are going on to further education than ever before, MLEs are still struggling to find the right people.  The IBR results show that MLEs are working hard to become attractive employers, but these latest results suggest that recruitment is a growing problem.  Add to that the fact that many business owners are facing succession planning issues because their children have very different aspirations than to follow in their parents' footsteps and you realise why people issues are at the top of the MLEs agenda."

In the case of Malaysia, the shortage of skilled workforce is also due to many skilled Malaysians working overseas at more attractive salaries. Many skilled and professional Malaysians are working in Singapore, China, Australia and the Middle East.

“This is part of the globalisation process and brings long term benefits. In the meantime our educational institutions need to develop and train more skilled Malaysians whilst the MLEs consider raising their remuneration to more competitive levels,” elaborated Dato’ Jasani.

The number of businesses reporting that their growth is being hindered by a shortage of long term finance, working capital and the increasing cost of finance have all increased this year as well.  Shortage of long term finance as a constraint is up from 17% to 20%, shortage of working capital is up from 20% to 24% and the cost of finance is up from 20%to 25%. 

Dato’ Jasani continues, "The increase in businesses reporting financial issues as constraints on growth is probably just the tip of the iceberg in terms of greater financial woes.  The credit crunch is putting increasing pressure on all kinds of businesses now and I suspect that in 12 months' time the shortage of long term finance, working capital and the increasing cost of finance will be even bigger issues for MLEs.
MLEs are identifying and beginning to address the key issues they face as they operate in an increasingly global marketplace. Together with the current state of the economy, it represents a challenging period in the short term for businesses. However, as they address these issues and meet the challenges, they will be increasingly well positioned to be successful in the very dynamic global environment."

 

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