By Syafirah Mohd Shahar, Multipotentialite
Malaysia grapples with a significant economic challenge—the plight of unemployed migrant workers. As reported by FMT, firms failing to employ migrant workers may face fines up to RM30,000 per worker, reflecting the issue's urgency.
The Unseen Crisis
Government investigations reveal a distressing scenario - hundreds of South Asian migrant workers, mainly from Bangladesh and Nepal, arrive without jobs despite hefty employment fees. This affects crucial sectors like manufacturing, palm oil production, and construction. The longstanding concern is that unemployed migrant workers, a major source of cheap labor, face accusations of forced labor, impacting Malaysia's economy.
The Malaysian government, with the Ministry of Human Resources, has taken steps to address the issue, promising jobs for stranded workers from Bangladesh and Nepal. Yet, as of June 2023, 1,120 foreign workers under the Foreign Worker Employment Relaxation Plan remain unemployed.
Therefore, the pressing issue of unemployed migrant workers in Malaysia demands immediate attention and action. While efforts have been made, more is needed for the well-being of these workers and the nation's economic stability.
Magnitude of the Issue
Estimates suggest several hundred workers from Bangladesh and 125 from Nepal are caught in a precarious situation in Malaysia. The Bangladesh embassy in Kuala Lumpur has reported about 1,200 other workers across Malaysia in a similar situation. The Nepal embassy has also mentioned receiving complaints from its citizens. These workers are often stranded without jobs and face challenges in finding employment, with some even experiencing threats of deportation after raising complaints about poor working conditions and delayed payments. Transparency issues in the hiring process, concerns over labor abuses, and structural unemployment further compound the problem.
According to the World Bank, Malaysia has experienced a rise in foreign labor inflows, constituting around 15% of the total labor force. Documented migrant workers in Malaysia number 2.1 million, comprising 25% to 30% of the workforce. When combining the unknown yet significant number of undocumented migrant workers, observers from NGOs, migrant support organizations, and the Malaysian Trades Union Congress (MTUC) estimate that there are between 1 to 5.5 million migrant workers in Malaysia.
Root Causes Exposed
Investigations reveal a complex web of factors, including exploitative employment, lax oversight in the recruitment industry, and the failure to hold employers accountable. The influx of foreign workers into Malaysia is propelled by demand factors, a shortage of unskilled workers, and the nation's economic success relative to neighboring countries.
Migrant workers make up a large proportion of workers in different sectors, and almost half of the low-skilled workers in Malaysia are of foreign origin. Malaysia's economy has long been heavily reliant on the migrant workforce, and without adequate support given to keep these migrant workers in jobs, Malaysia would effectively be unplugging its economy's access to a large swathe of the labor force.
Industry-Specific Challenges
The sectors most affected by the shortage of migrant workers in Malaysia are manufacturing, palm oil production, and construction, which are vital pillars of the country's economy. According to a Reuters report, Malaysia lacks at least 1.2 million workers across these industries, a shortage that is worsening daily as demand grows with the country's economic recovery.
The manufacturing sector, for instance, requires 2.4 million workers, while the construction sector requires 1.2 million workers, as of the second quarter of 2022. Meanwhile, a Malay Mail article dated September 5, 2023, states that the shortage of foreign workers in three sectors, namely barbershops, textiles shops, and goldsmith shops, is not yet over. Migrant workers make up a large proportion of workers in different sectors of Malaysia with a disproportionately large presence in construction, tourism, manufacturing, and agriculture.
The Role of Governance
Determining accountability in the current crisis of the shortage of migrant workers in Malaysia is intricate. It is unclear whether the fault lies with HR professionals in Malaysia or the executive board overseeing company policies.
However, the collaboration between these entities is pivotal. The board's responsibility in setting a compelling vision, supervising HR policies, and making high-level decisions complements HR professionals' role in advocating for mindset change and ensuring business productivity. Malaysia's governance system for labor immigration involves a network of multiple public and private actors working across the local, national, regional, and international levels, with different actors having varying degrees of power and centrality.
Towards Solutions
Comprehensive reforms are urgently needed. Transparency in the recruitment process, stringent labor market regulations, and the protection of migrant workers' rights must become top priorities. This calls for collaboration between the board and HR professionals to align strategies, set key performance indicators, and ensure the recruitment process is transparent and regulated.
In conclusion, Malaysia stands at a crossroads – acknowledging the depth of the issue, understanding its root causes, and collectively working towards reforms. Only through a united effort can the nation pave the way for a fair and equitable future, not only for the unemployed migrant workers but for the resilience of its economy as a whole.
Syafirah Mohd Shahar is an HR enthusiast, economics geek, and seasoned media contributor. With a strong background in Human Resource Management and Economic Analysis, she has made significant contributions in roles spanning HR leadership, project management, and data-driven decision-making. Syafirah's ability to solve complex problems and her effective communication skills have been key assets in her career. Her work experience includes collaborations with reputable organizations such as DELL, JABIL, and more. As a dynamic professional, she continually seeks opportunities to drive positive change and make a lasting impact.
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