LABOUR shortage has always been a major issue for businesses. But Datuk Paul Wong, managing director of Manforce Resources (M) Sdn Bhd, opines that getting the right fit for the job can help reduce employers’ reliance on a large workforce.
“We have to look for the right people who can do the job. For example, overseas, you can run a restaurant with three people. Here, we need 10 because the people are not efficient. This is because they can’t find the right people for the job,” he says.
That’s where companies like Manforce can play a role, he adds.
The workforce solution and services company provides one-stop solution to employers with regard to foreign workers such as the provision of foreign worker management services, manual labour services and foreign worker insurance products and services.
But Wong notes that getting the right people for the role is not only about acquiring the right workers. Employers, too, need to buck up.
“First of all, we need to find the right customer (employer). They need to be qualified customers who can meet the minimum requirement by the government for things like minimum wages, proper accommodation and things like that. Getting the right employer means getting a good employer. And when foreign workers come, they are happy to work in this company.
“A lot of clients don’t qualify for new approvals (for foreign workers) because it’s hard to follow the procedures. There is a lot of red tape and a lot of labour laws to comply, like the overtime, working condition, hostel and so on.
“Because of this, we have to educate customers sometimes. In this market, more than 70% don’t follow 100% of government requirement. It is hard to follow. But they need to try.
“So when we work with an employer, we make sure they are the right kind of customer who can follow the law. Then, we try to match them with the right workers,” he explains.
Manforce was founded by Wong in 2004 as an agent to supply foreign workers. In 2007, when the government started issuing outsourcing licence to recruit foreign workers, Wong jumped at the opportunity to grow the company further.
However, new quota for this was frozen in 2010, forcing Wong to look at a new business model to sustain and grow the company.
Eventually, Manforce settled on providing worker management services.
“This change has made our company and the business grow better. We use this service to work with our clients. We help them with the recruitment and managing of workers but using their permit. So we are accountable for the quality of workers that we help them source but employers are still responsible for their workers,” he adds.
The new model also ensured that the company enjoyed recurring income.
Notably, Manforce had to change their customer base when they changed their business model. The company focused on foreign employers who were more familiar with the model.
But in the last two years, more local customers have also sought their services.
Manforce chief financial officer Andrew Chin notes that sourcing for the right workers was becoming more challenging.
The economies in most of these source countries have improved, reducing the attractiveness for them to migrate here for work. Additionally, the weaker ringgit is a push factor.
“Also, customers are changing. They don’t just want workers. They have more requirements to recruit workers nowadays, like, they must be well-spoken and skilled,” says Chin.
Wong expects to see changes in labour policy following the change in government last year.
Currently, its worker management services model does not require a licence but Wong foresees such requirement taking shape in the future. This would mean that there could be more players coming into the market with a similar model to Manforce’s.
Even so, there is still a lot of potential for the industry. Demand consistently outweighs supply, he says.
“We need to also educate our competitors. We don’t mind having more of them using this model. This is a concept that will do better. It’s good for the industry,” says Wong.
“Staff cost is always increasing. From a business point of view, there is always a need to try to reduce the staff cost. But the more you do that, the harder it is to get the right people to operate the business. So for us, this is an opportunity,” Chin adds.
Both Wong and Chin welcome any policy changes in the labour market that will help improve transparency and increase the level of professionalism in the industry.
Manforce was listed on the LEAP Market last December, raising RM8.6mil through private placement at 18 sen per share. The funds will be used for working capital and to defray listing expenses.
Manforce has been growing steadily over the past few years. Its net profit increased to RM4.8mil for financial year 2017 from RM4.5mil in 2016. Revenue rose to RM77.1mil from RM68.7mil over the same period.
The company is looking to help hire and manage up to 1,800 additional foreign workers post-listing. It currently has over 3,000 foreign workers under its service, mainly in the manufacturing and services sectors.