Malaysia struggles to keep workers as ringgit takes a battering

JOHOR BARU — Over the past three years, Mr Dwayne Ho, who runs an automotive repair shop in Johor Baru, has lost two of his best workers to Singapore.

His first worker — a junior mechanic — left in 2013 to work for a Singaporean company that specialises in repairing taxis, as well as a nearly 70 per cent increase in pay.

“He was offered a salary of S$1,000, whereas when he was working with me, he was earning RM1,800 (S$597). How could I stop him?” he told TODAY, surrounded by cars in various stages of upgrading and repair.

A year later, another of his junior mechanics quit to go to Singapore, also drawn by the strong Singapore dollar.

Today, Mr Ho is running his business with four junior mechanics, and is still looking to replace the two staff who left. This also means he and his remaining workers have to log in extra time, sometimes up to four hours more a day, to complete their jobs on time for clients.

His is among a host of businesses in Johor struggling to hire and retain workers, many of whom prefer to make the daily commute to Singapore due to the weakening ringgit.

Malaysia’s ringgit was Asia’s worst performer in 2015, battered by the global crude oil slowdown and uncertainty tied to a corruption scandal involving state fund 1MDB. The ringgit is trading at around 3.02 to the Singapore dollar this week compared to its year-to-date high of 2.8510 on April 15.

JOHOR HIT HARDEST

Over the decades, Johor, along with other states in Malaysia, have lost workers to other countries, including Singapore.

The problem is especially acute in Johor due to its proximity to the Republic.

Compounding the labour problem is the fact that the weak ringgit means that foreign workers, too, are reluctant to work in Malaysia.

“The weak ringgit has disincentivised foreign workers from Nepal, India and Indonesia from working here,” Deputy Home Minister Nur Jazlan Mohamed told TODAY.

“They find it is not worth their while to come here because they have to fork out their own money to pay for agents’ fees, and they find the wages are not enough to cover the initial costs.”

Malaysia, with a population of 30 million, had 2.1 million legal foreign workers in 2015, a figure which fell to 1.9 million as of June this year, according to Mr Nur Jazlan.

Many of the foreigners are hired to work in “3D” — dirty, difficult and dangerous — jobs shunned by Malaysians. Most of these migrants are from Indonesia, Bangladesh, Myanmar and Nepal, and work in the agricultural, manufacturing and construction sectors.

Malaysian employers in Johor said besides the strong Singapore dollar, local workers are also attracted to the Republic’s emphasis on high tech and high skilled industries which offer better learning opportunities and experiences.

Mr Lee Tau Boon, group chief operating officer of a bio-organic fertiliser manufacturing plant in Johor’s Pasir Gudang industrial estate, said semi-skilled and skilled workers such as machinery maintaintenance workers, forklift drivers and electricians are highly sought after, not only in Singapore but locally as well.

“Malaysians in this field can earn S$3,000 in Singapore which after conversion is around RM9,000. That is equivalent of a manager’s pay scale in Malaysia. They will never get this sort of salary in Malaysia,” he said.

For employers, this means losing workers as quickly as they can train them. Mr Lee said his company needs about 10 forklift drivers but they lose the workers either to Singapore or to other local companies at a rate of 30 to 40 per cent annually.

Mr Lee believed the only way to resolve this problem is for companies to pay workers more or give them better perks. He also said fresh graduates need to be less fussy with jobs and consider more varied work experiences instead of preferring to work in an office environment.

Johor Lorry Operators’ Association president Anthony Tan concurred, adding that youths have a negative perception of truck drivers, thinking that it was a hard and dirty job.

As a result, there are 1.2 million registered heavy goods vehicles nationwide but the industry faces a 20 to 30 per cent shortfall in drivers.

“There is a lack of interest in the job, primarily due to the relatively low pay and lack of social recognition,” he told TODAY.

He said a Malaysian driving a 40-foot truck is paid between RM3,000 and RM6,000 a month. Meanwhile, a bus driver in Singapore earns a basic salary of almost S$2,000, which can go up to over S$3,000 after adding in overtime pay and other incentives.

“The strong Singapore dollar is certainly one of the contributing reasons, where good qualified drivers opt to go to Singapore and take up jobs as bus drivers,” he added.

THE BOOMERANG EFFECT

Despite the exodus which has make it difficult for factories and businesses to retain talent, Mr Teh Kee Sin, advisor to the Johor South Small and Medium Enterprises, is optimistic.

“They have roots here (in Malaysia) so they will want to come back and when they do, they are equipped with knowledge, a positive work attitude and high productivity and we will benefit from their experience,” he said, adding that Johor workers have been making their way across the Causeway to work for decades.

The Johor state government, in a bid to stem the brain drain, announced last year it was setting up a RM107 million Johor international skills training hub to equip the workforce with the necessary technical and vocational skills needed by the industries.

Sited on a 100-acre land along the Kulai — Kota Tinggi highway and 20 minues’ drive from Senai Airport, the hub is expected to be ready by 2018. When completed, it will be able to house up to 20,000 trainees a year.

“There is so much investment in Johor,” Mr Bruce Lim, the executive director of Johor International Skills Hub told TODAY, referring to the many projects ongoing in the southern Malaysian state, from the Pengerang chemical refinery plants to the Iskandar property development.

“It is not easy to get a skilled workforce that meets the needs of employers so this hub will boost workers employability and their wages.”

He said the hub will play the role of matchmaker, matching companies with training providers so that workers are equipped with the necessary skills that are accredited both locally and internationally.

Ultimately, even if workers prefer to work in Singapore, Mr Lim said, he does not view the issue as “a threat”.

“At the end of the day, we just need to train more workers,” he said, noting that many companies from Singapore have also relocated to Johor due to lower operating costs and these companies will need talented workers.