Competition from Singapore, problems related to hiring locals and getting foreign workers for dangerous, difficult and dirty jobs are threatening the continuity of businesses in Johor.
BUSINESSES in Johor, especially in Iskandar Malaysia, are facing problems hiring locals as they prefer to work in Singapore.
Johor South SME Association advisor Teh Kee Sin lamented that it was a challenge to get locals to do the 3D (dangerous, difficult and dirty) jobs.
“Like the majority of Singaporeans, Malaysians don’t want to do 3D jobs,” he said.
Yet, Teh said locals were willing to do the 3D jobs on the island republic due to the strength of the Singapore dollar.
The exchange rate on Monday was SGD1.00 to RM3.24.
He said for instance, the basic salary for a factory production operator in Singapore was about SGD1,500 (RM4,860), plus overtime, it could go up to SGD2,000 (RM6,480).
“Financial interests are drawing Malaysians and new job seekers to Singapore,” said Teh.
Unlike other states in the country, Johor’s labour shortage is intensified because its citizens prefer to commute daily to Singapore for work.
“Even those from other states are also relocating to Johor, especially Iskandar Malaysia, to work in Singapore,” said Teh.
Unofficial figures show that some 300,000 Malaysians commute daily from Johor to Singapore to work, while another 400,000 Malaysians work and live in Singapore,” he said.
Teh added that the figures could be higher post-Covid-19 since the border between Malaysia and Singapore had reopened on April 1.
“But it is difficult to get the exact numbers of locals working in Singapore as both Malaysian and Singaporean authorities are not releasing the official figures,” he said.
Teh hopes the new Federal Government could address the labour shortage in the country as failing to do so could cause an economic disruption.
“We are now talking about the shortage of local workers in addition to foreign labourers as most of them have returned to their countries after international borders reopened on May 1,” he said.
Teh said it had been challenging for manufacturers in Johor Baru, Pasir Gudang, Kulai and Senai who were trying to hire locals to fill the void left by these foreign workers.
Iskandar Malaysia Johor Chamber of Commerce and Industry secretary-general Md Salikon Sarpin attributed the country’s labour shortage to delays in adapting to the digital economy.
He said the country needed to quickly transform to the digital economy.
“We hope the new Federal Government and Johor government can work together to provide training, reskilling and upskilling for new and existing workers,” he said.
Salikon said Johor should focus on attracting more capital-intensive and high-technology investments into the state instead of labour-intensive manufacturing activities.
He said the Covid-19 pandemic and movement control orders changed the way people conduct business, especially small and medium enterprises (SMEs).
“Don’t treat technology as a roadblock but consider it an enabler to move forward,” he said.
Salikon said in today’s borderless world, digitalisation was no longer an option but a necessity, and businesses should not fear change.
He said companies, especially smaller ones, need to have knowledge of where and how to start, and get advice from the relevant service providers.
Separately, Salikon said thousands of Malaysians who commuted daily to the republic to work had contributed significantly to the state’s progress.
“Johor citizens and locals from other states working in Singapore have helped to boost the local economy as the money earned there and spent in the state has contributed to its development,” he said.
Salikon said the Singapore dollar’s strength against the ringgit over the past several years had been a boon for Johor’s economy as locals working in the republic had strong purchasing power.
“They have disposable income to buy properties and cars and this will definitely benefit developers, retailers and businesses in the state,” he said.
Salikon added that Johor and Singapore’s economic interdependence resulted in a win-win situation for both.
Meanwhile, Johor investment, trade and consumer affairs committee chairman Lee Ting Han said Johor recorded the highest investment figure in the country in the first half of 2022.
He said the Malaysian Investment Development Authority (Mida) reported that the RM60.9bil in investments was equivalent to an 822% increase from the amount registered in the corresponding period last year.
“It shows Johor continues to attract strong interest from investors despite the global economic challenges and uncertainties,” said Lee.
He said Johor would work even harder to attract high-technology, quality investments.
From January to June 2022, the service sector recorded RM54.2bil in investments.
The figures accounted for almost the entire amount of investments with the presence of foreign-based data companies.
In the same period, the manufacturing sector attracted foreign investments worth RM6.7bil while the primary sectors – distribution, transportation and logistics – registered RM30mil.
“The investments will create some 7,200 new job opportunities for semi-skilled, skilled and professionals and bring economic multiplier effects to the state,” said Lee, who is also Paloh assemblyman.
He said the state government would work closely with the industries and tertiary education institutions to produce knowledgeable and skilled workers in Johor.