THE cost to hire foreign workers has now doubled after employers were told that they would have to foot quarantine and Covid-19 screening fees, industry leaders said.

Leaders in the construction, manufacturers and furniture sectors told The Malaysian Insight that although Putrajaya has given approval for hiring foreign workers, their plight in overcoming the acute manpower shortage is not over yet due to the high cost involved.

Master Builders Association Malaysia (MBAM) president Sufri Mohd Zin said that the estimated cost to bring in a foreign worker is between RM13,000 and RM14,000.

The cost of screening and quarantine for imported workers after the epidemic is estimated to be as high as RM8,300, according to MBAM’s preliminary calculations.

The fee is inclusive of the worker’s RT-PCR test taken 72 hours before departure, the five-day quarantine cost before leaving his home country, the two PCR tests after arrival in Malaysia, the seven-day quarantine, as well as the transportation, food and accommodation costs stipulated by the Malaysian Construction Industry Development Board.

In addition, other fees such as the foreign worker’s head tax, medical examination, social insurance, insurance, and visas will require another RM5,000.

Sufri said most of the foreign workers in the construction field are from Indonesia and Bangladesh, with others from Myanmar, Vietnam, India and Pakistan.

“The problem is that, in addition to strict standard operating procedure and costs, the government has yet to open up our borders for bringing in the new construction workers,“ he said.

He estimated that there is still a shortage of 500,000 foreign workers in the construction industry.

The shortage is caused by foreign workers who left the industry or country after their permits expired during the movement-control order period.

“It is estimated that almost 85% to 90% of labourers in the construction industry are foreign workers.

“Although the government and various industries encourage the hiring of locals, locals are not keen on the construction industry and think it is dangerous, dirty and difficult.”

He said a general worker who works in construction can easily earn about RM2,600 to RM3,500 per month, which is much higher than the approved basic pay.

As for undocumented workers, he said although the government has allowed them to apply for legalisation, employers find it difficult to legalise them as very little is known about their background.

Sufri said that the problem of foreign labour shortage in various industries has been ongoing for many years. The government needs to have the political will to solve the problem, he added.

Additional RM5,000 to hire a foreigner in the manufacturing industry

Federation of Malaysian Manufacturers (FMM) president Soh Thian Lai said the rough cost of hiring a foreign worker was between RM6,120 and RM8,400 before the Covid-19 pandemic.

Post-epidemic, manufacturers must bear the screening fees of foreign workers and the additional operating fees required for MySafeTravel online when applying for the entry of new foreign workers.

According to FMM’s calculations, expenses for each foreign worker increased by another RM5,000.

Soh said that as the National Recovery Plan entered into advanced phases, industries have begun to resume operations and have increased production capacity.

Manufacturers faced a shortage of skilled and unskilled workers and according to FMM’s recent survey, based on feedback from 252 companies, it was estimated that the manufacturers urgently need 22,000 employees.

The highest shortage is among the unskilled general worker category at close to 14,000, followed by skilled general workers, technicians, machinists and engineers that totalled more than 7,000 workers.

The top five manufacturing sub-sectors facing manpower shortages are electrical and electronics, food and beverages, chemicals and chemical products, fabricated metal and rubber products.

FMM has a total membership of 3,500 manufacturing companies.

Soh said as a member of the National Chamber of Commerce and Industry Malaysia, a recent survey covering 835 companies reported an overall shortage of 77,721 workers, with the manufacturing sector requiring up 77.1% of the total manpower needed, followed by the construction sector (11.2%) and other services (8.9%).

The data compiled from industry associations showed that plantation required 70,000 foreign workers, rubber glove (25,000), furniture (30,000), construction (200,000), manufacturing (25,000), services (45,000) and plastics (6,293).

He urged Putrajaya to act on the plight of manufacturers by lifting the freeze on foreign workers to fill the gaps in the unskilled general worker category.

This would be a short-term measure to assist the industries’ revival to support economic growth for the country, Soh said.

RM5,200 to hire a new worker in the furniture industry

Malaysian Furniture Council (MFC) secretary Matthew Law said the furniture industry needs 30,000 foreign workers.

He said expenses for each foreign worker is about RM3,700, excluding vaccination and quarantine fees that could add another RM1,500.

He said the cost of applying for a new foreign worker will exceed RM5,200, which is a huge financial burden to employers.

Law said that the furniture industry has been unable to hire foreign workers for the last two and a half years.

“In June, due to the complete lockdown, the industry was unable to operate for more than two months. Manufacturers’ orders could not be completed. International shipping costs were extremely high.

“Customers have reduced their furniture purchases. Under severe shortage of manpower, the furniture industry struggled to sustain,” Law said.

He estimated that every furniture factory has a manpower shortage of 20% to 30%.

The MFC urged the government to extend the grace period for foreign labour permits.

“After all, the furniture industry is a technical one. After skilled foreign workers have returned home, re-training new foreign workers cannot be done in a short time.

“The furniture industry needs skilled workers. Otherwise, we will not be able to take on new orders,” Law added. – November 10, 2021.