PETALING JAYA: Labour shortages in oil palm plantations are causing severe economic and operational losses estimated between RM7.5bil and RM20bil annually, says Malaysian Employers Federation (MEF) president Datuk Dr Syed Hussain Syed Husman.
He said the situation highlights how heavily the plantation sector relies on foreign workers, who make up about 80% of the workforce, especially oil palm harvesters.
Syed Hussain said travel restrictions and slow recruitment processes have resulted in significant volumes of fresh fruit bunches going unharvested and leading to reduced oil extraction rates and deteriorating crop quality.
“When harvesting is delayed, the losses are not just immediate but compounded. The quality drops, output declines and the overall efficiency of operations is affected,” he added.
Syed Hussain said labour shortages are also taking a tangible toll on production output in other critical sectors.
“As of this year, about 77% of manufacturers highlighted that labour shortages are their primary operational challenge, even surpassing concerns over tariffs and trade barriers,” he said.
He said labour scarcity may also push up wages, overtime and recruitment costs, forcing employers to either absorb the extra costs or pass them on to consumers..
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He noted that uncertainty over workforce availability may also affect plans for businesses' growth or new projects.
This could slow economic activity, disrupt job creation and affect the country’s appeal to both domestic and foreign investors, he added.
“Existing employees are also likely to face heavier workloads, raising stress levels and the risk of greater turnover.
“Productivity could take a hit if companies are forced to operate with suboptimal staffing, compounding operational pressures across affected sectors.
“Persistent labour constraints may also force some employers to turn to informal hiring channels and increase the risk of regulatory breaches, penalties and reputational damage,” he said.
He stressed that without coordinated action between employers, government agencies and training institutions, prolonged manpower shortages could slow domestic investment and dampen broader economic expansion.
“We need a more responsive and efficient workforce management framework to ensure businesses can operate at optimal capacity. Otherwise, the longer this persists, the greater the risk to growth and competitiveness.”
