Tackling The Serious Issue Of Labour Supply In Malta

Marie-Claire Grima - 21st July 2018

Industry specialists share where the most significant problems in HR lie, what action has been taken so far, and what must be done in order to keep the economic engine humming.

At first glance, the employment situation in Malta appears to be excellent. The country currently has the largest labour force in its history, a significant increase in the domestic supply of productive hours, the largest cohort of foreign workers it has ever had, and the second-lowest level of unemployment across the entirety of the European Union.

Nigel Mifsud

Nigel Mifsud

Despite this, Malta’s employers face a severe lack of labour supply. “Employers are in constant, fierce competition to attempt to recruit the personnel necessary for operations to adequately meet demand,” says Nigel Mifsud, Policy Executive at the Malta Chamber of Commerce, Enterprise and Industry. “They are forced to contend with decreasing productive man hours per worker due to an increasing number of vacation days and other leave allowances, traffic and many other factors. These contribute to increased labour costs for less productive hours. Furthermore, labour shortages are also encouraging employees to become less proactive, because they do not feel that their jobs are at risk and for similar reasons, employers are finding it harder to implement corrective action where and when necessary.” Mr Mifsud adds that the scale of the problem is unprecedented, with shortages being experienced across the board, in every industry and at every level.

The only short-term solution available to employers with vacancies is to resort to the recruitment of foreigners. “However, recruiting third-country nationals is a very lengthy, bureaucratic and costly process which also involves a significant uncertainty at every stage for both the employer and the applicant,” Mr Mifsud states. “Identity Malta, the national agency responsible for the processing of work and residency permits for third-country nationals, has experienced year-on-year surges in the number of applications received. In 2017, the number of applications increased by 65 per cent compared to the previous year, while in 2018 an additional increase of 75 per cent is expected when compared to last year.”

Mr Mifsud says that the organisation faced an uphill struggle to cater for these numbers, but adds that a number of timely proposals by the Chamber prompted the required investment and improvements in Identity Malta’s operations. “In the coming months, employers and applicants alike can expect to find a larger pool of well-trained officials working within Identity Malta, together with reductions in bureaucracy linked to the permit renewal process, shifts towards online processes, as well as other forthcoming positive announcements in this regard. However, in the medium- to long-term, it is vital for Malta to develop towards a high value-added economy that mainly depends on skilled/educated domestic workers. A future characterised by a persistence of the present population growth is simply unsustainable,” he pronounces gravely.

Through its vast network of members, the Malta Chamber has always had its finger on the pulse of the business community in Malta, who give it invaluable insight and foresight on issues affecting any facet of a business’s operations. “In a recent report titled the Labour Market 2018 Report, the Chamber warned that the persistence of such a situation threatens the continued and sustainable growth of the country. With Malta at a crossroads in terms of its development, the Chamber felt duty-bound to proactively draft a suite of policies related to the labour market, intending to provide policy-makers with context of the issues at hand and more importantly, with a blueprint on how to mitigate the threats posed by the present shortages.” The Chamber’s proposals are primarily focused on maintaining the importance and relevance of Malta’s domestic workforce, while only resorting to foreign workers to supplement areas of domestic shortfall. Other proposals focus on implementing best practices observed in advanced economies, identifying gaps in the labour market, and proposing workable solutions to mitigate those gaps. The Malta Chamber presented its report to Cabinet in May, with the aim of sensitising politicians to the business community’s primary concern, providing a list of workable solutions for both the short-term and the long term, and exploring potential avenues for collaboration.

Antoinette Caruana

Antoinette Caruana

Antoinette Caruana, Farsons Group’s Company Secretary and Group Human Resources Manager says that the current labour market in Malta is definitely an employees’ market, with employers striving hard to be able to engage people to provide company products and services to their clients. “Vacancies range from positions in logistics, especially delivery persons, to qualified finance professionals and technical people, as well as competent administrative team members. As other colleagues in the hospitality industry may also confirm, recruiting crew members and management in hospitality also has its fair share of challenges. The increasingly diverse and inclusive labour market has, however, helped to provide a much-needed labour supply, which is critical for companies to continue to grow and succeed.”

Ms Caruana argues that the manufacturing sector may find it even more challenging to attract employees compared to other sectors, which may be perceived to be more agile, more outgoing, higher payers and more fun. “But the reality is that the manufacturing industry, and Farsons in this case, is also a significant contributor to Malta’s economy. Farsons is also known for being a good employer. We’re here for the long term, we’re dependable, we support employee growth and development, we recognise and applaud employees’ contributions, and we actually care. We’re known for our values which we live and foster with great pride. Our employees are at the heart of our success because, as we say, everyone makes a difference.”

Ms Caruana says that Farsons Group, as a publicly-listed, commercial company, is committed to providing shareholders with the best possible return, and strives for this return in an environment which fosters strong values of integrity, loyalty, trust and teamwork, among others. “Corporate governance and a strong HR culture and strategy aligned to the business strategy and corporate vision are key elements of the way we do things. We believe that by striving to be a desirable employer, we can maintain and even strengthen our bottom line. The conditions of employment offered to our employees, as well as the environment and culture we foster contribute to the motivation and performance of our teams. We have been proactive in introducing various HR programmes and initiatives that enable the company to perform better as our employees are more skilled, more flexible and earn more for achieving targets whilst seeking to create a more positive and ‘caring’ environment where each person matters.”

Finally, Ms Caruana says that promoting and encouraging a more inclusive and diverse labour market is critical. “Diversity may bring about challenges in the workplace, but it also brings about strengths, as it reflects the reality of our society and of the market place, brings more innovation and more possibilities. Supporting more women to enter the labour market is also always on the agenda, which requires more flexibility in the workplace and in how we work. We also need to focus on the young generation – those students who are not completing their secondary education and possibly falling out of the formal labour market. We may need to look at how we can actually do more together to give these youngsters another chance. There certainly is a need for them in manufacturing.”

Dollsy Darmanin

Dollsy Darmanin

Dollsy Darmanin, Vodafone Malta’s Head of HR, says that the company is finding it most difficult to fill technology- and digital-related roles, “due to huge demand from both local and foreign companies, and competitive salaries being offered by gaming companies.” However, she says that the benefits that help ensure employee attraction and retention include “flexibility, mobile working and family-friendly measures (for both male and female employees), our policies on diversity, gender balance and LGBT+ inclusion, health and life insurance, as well as enhanced data and telephony.” Ms Darmanin says the company also does fair pay and gender pay reviews in line with benchmarking, to ensure that the company’s employees are paid fairly compared to the market average.

“The impact on our bottom line is quite hefty, but so far we have managed to retain the investment in our employees. Besides, engagement and productivity have increased with the introduction of these measures,” Ms Darmanin shares. “In the short-term, I believe we can solve the problem of HR shortages in Malta by targeting more countries with high unemployment rates to find additional resources. In the long-term, there should be more apprenticeships in jobs for the future, including careers that are currently rare or non-existent, such as Artificial Intelligence (AI), Internet of Things and so on.”

Catherine Calleja, Director and Group Company Secretary for Atlas Insurance PCC Limited, says that although certain positions, especially in the fields of finance and IT, are harder than others to fill, sometimes it is more difficult to fill positions at certain times of the year. “We make every effort to provide a career path within the Group, as we find that internal moves go a long way to help staff members find a fulfilling way to experience different roles and find a career path. We have in fact had people moving from one area to another and doing completely different things – from roles as disparate as personal lines to IT, from credit control to health claims, from health claims to finance. We do all we can to keep people who embrace our values and work ethic engaged. When you have these elements, retraining is very rarely an issue, and the previous experience at Atlas creates a significant advantage.”

Catherine Calleja

Catherine Calleja

Ms Calleja says that Atlas Insurance works very hard at employee engagement and has annual surveys with follow-up workshops in departments, as well as a performance management system which plugs into the firm’s training programme. “At all levels of the organisation, we encourage coaching and mentoring, and there is management support also to help management in today’s fast-moving business environment, which can be stressful. In 2017, Atlas won the Business Leaders Employee Engagement Award in its category for 2016, and we aim to continue building on this success. We also have an active social club and organise various events, offer volunteering leave, involve our staff in diverse CSR projects and so on. We also run a successful internship and talent pool programme which encourages job rotation. It is a reality that market conditions make it impossible to retain a particular staff member in some cases and sometimes the new opportunities created by a vacancy can lead to positive change. Having said that, we are proud to invest in so many programmes which make our work experience positive, and being part of the Atlas team an enriching experience.”

Ms Calleja, who is also the Chairperson of the Malta Chamber Human Resources Committee, strongly believes that education is the key to solving the problem of HR shortages in Malta – both in terms of the company’s internal resources and on a national scale. “The relatively large number of young people whose skills are being lost to the industry is so sad. The Not in Education, Employment or Training (NEET) rate is at close to 10 per cent. Although low compared to other European countries, it is still such a waste of skills which we could utilise so well.”

“At the Chamber, we actively support various efforts to develop our human resources as a nation and have been involved in a number of initiatives with the Department of Education, the University of Malta, MCAST and other institutions, including NGOs, working to integrate immigrants to encourage linkages between the world of education and that of industry, and to encourage more people to enter the workforce. Internships and apprenticeships are in fact increasing, and this type of relationship with students has been very successful in attracting talent and preparing students for the world of work. In addition, we run several programmes and benchmarking sessions for HR practitioners in our membership base on various HR topics designed to make today’s work experience more of a positive and engaging one, and ultimately to reduce wastage of talent.”

This article originally appeared in The Commercial Courier


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