BUSINESSES in Johor are losing employees to Singapore, lured by the republic’s high exchange rate, employers in the food catering and manufacturing sectors said.

Chinese restaurants, in particular, are struggling to hire cooks and waiters, while in manufacturing, there is a shortage of workers at the supervisory level.

Pan Malaysia Koo Soo Restaurants and Chefs Association president, Wong Teu Boon said restaurants in Johor are offering RM3,000 to hire workers but cannot compete with the S$3,000 (RM9,448) offered by Singaporean employers.

“This shortage of staff has become serious after borders reopened,” Wong told The Malaysian Insight.

Malaysia reopened its borders fully to international travellers on April 1 after two years of Covid-19 lockdowns.

Wong said earning the same figure in Singapore dollars, which converts to more than RM9,000, made it an obvious choice for many workers. The ringgit has not been lower than RM3.15 to the Singapore dollar since mid-April, and is currently at RM3.16.

“Of course they will choose Singapore,” Wong said.

Sia Boon Kong, managing director of Loon Sing Group, a seafood restaurant chain, said the lack of workers is affecting their quality of service.

Businesses are seeing a lot of activity now but profit margins have not returned to pre-pandemic levels and they are faced with staff shortages, rising prices, and higher wage bills.

Waiting times for customers to be served have also become longer, now that many are left with around three employees instead of the 10 they used to have.

“We are operating on existing manpower and since the pandemic is still not over, we are still spending on things like disinfection,” Sia said.

Besides restaurants, small and medium-sized enterprises are also facing a severe manpower shortage.

South Johor SME Association president James Tan Tien Chong said the ringgit’s depreciation and Singapore’s continued recruitment drive has had a great impact on Johor’s services and manufacturing industry.

The manufacturing industry is facing a severe shortage of supervisory-level employees, he said.

Tan said the manpower shortage also means that many orders in the electrical and electronic sectors cannot be fulfilled, which has resulted in factories rejecting new orders.

The monthly salary paid to workers in Singapore, when converted, equates to pay earned after three months of work in Malaysia, Tan added, and cited the example of a dishwasher who is paid S$2,500 in Singapore, which converts to RM7,898.

“Singapore is too attractive since the ringgit has depreciated badly.”

More savings in Singapore

Many Malaysians working in the city state also prefer living there to avoid the daily commute across the border, and this has driven rental prices up, Tan said.

Before the pandemic, the average rent was S$400 to S$600, but it is now S$800.

For Kelvin Chia, a Malaysian working in the island state, the balance of his wages after paying rent when converted to ringgit still makes it worthwhile to live there.

He saves on time and money commuting across the border, and doesn’t spend much on anything else.

“I’m satisfied here. I’m saving a lot because I don’t spend a lot on entertainment,” said the employee at a trading company who makes S$2,000 a month, inclusive of overtime.

Chia, who went to Singapore to work when Malaysia fully reopened borders, said he saved far less when working in Malaysia. Now his savings have grown, he added.

The depreciating ringgit also deterred food and beverage worker David Liew from returning to work in Malaysia, where he has family.

“I did think about coming home to be closer to my family but after seeing the ringgit slide, I decided to stay back in Singapore and save more money before returning home,” said Liew, who has been working there before the pandemic. – July 12, 2022.