In pursuit of skilled foreign labour

Malta’s positive economic performance over recent years – our growth rate is one of the highest in Europe - coupled with a low birthrate, has led to significant labour shortages. Certain sectors have a more acute problem than others in this respect.

It should come as no surprise that sustaining the current economic model required several local enterprises to increasingly seek to address this challenge through the engagement of foreign workers. At the end of 2022, the total number of employed foreign nationals in Malta and Gozo amounted to 96,970. When one compares this to the figure for 2005 – which was 5,231 – this phenomenon becomes even more striking. 36% of these foreigners hail from EU member states, 63% are third country nationals (TCNs), and 1% are from European Free Trade Area (EFTA) countries.

For Malta to sustain high economic growth rates, wealth and quality employment, sectoral and national productivity need to improve. Skilled labour leads to higher productivity. The National Employment Policy (2021-2030) highlights that “productivity is a key driver of economic activity, not simply in terms of generating higher levels of growth and output, but also in terms of improved wages and living standards”.

In last week’s budget speech, Finance Minister Clyde Caruana emphasised that investing in workers’ skills and competences leads to quality employment and improved productivity, contributing towards high standards of living for workers in Malta. This is also echoed in the vision of the National Skills Council, which is: “To foster a culture of lifelong learning for all, enabling people to reach their full potential in the dynamic world of work.”

Upskilling and – when necessary – reskilling, are crucial.  The EU has acknowledged their importance at this juncture in our collective history by declaring 2023 to be the European Year of Skills. Eurostat data places Malta just above the EU 27 average (15.9% as opposed to 15.6%) when it comes to employee participation in education and training. Despite the upward trend in this respect over the past few years, we have to accept that there is still room for improvement. Maintaining a skilled labour force requires ongoing and consistent investments in our human capital. This has now become even more pertinent - given the green and digital transitions we are focused on, together with the rest of our European partners.

This obviously also applies to the foreign workers amongst us. They should not be considered as being part of temporary stop gap measures, but as an integral part of any organization - despite the high turnover being experienced in this cohort of our workforce. The Central Bank of Malta has indicated that turnover rates for foreign workers are twice those found amongst the Maltese in a policy brief published last year. It is noteworthy that the hospitality sector registered the highest turnover rates. Whilst acknowledging the high turnover rates of foreign workers and the train-retrain loop needed as a result, employers should not be discouraged from investing in all the members of their team. It is universally acknowledged that talent management has a significant impact on employee attraction and retention.

In a bid to enhance productivity, the spotlight is now being turned onto the importation of skilled labour – focusing on quality rather than quantity. We should aim at attracting workers who already have the necessary skillset and the competence to perform the tasks they are employed for. This should include the necessary English language skills to facilitate communication and interaction with clients and fellow team members. An economic model which requires high numbers of low skilled foreign workers places a substantial burden on the national infrastructure and living standards. This is especially the case in smaller countries such as ours. The need to aim for higher standards was already underlined in the 2021 National Employment Policy. The recent launch of a related initiative by the Institute of Tourism Studies (ITS), in collaboration with Identità and the Malta Tourism Authority is a laudable step in this direction.

ITS is seeking to introduce a benchmark to facilitate access to employment in the industry to those with the necessary skills, by establishing mandatory requirements related to customer care, the Maltese touristic product and ‘English in Hospitality’.  For third country nationals this means that, as of January 2024, all those wanting to work in the sector will have to sit for tests in these disciplines to be eligible to apply for a Visa. The National Skills Council applauds ITS for this undertaking, which should ensure that only those with the basic skills necessary will be accepted, enhancing the quality of our product. This will also discourage those who simply view Malta as a convenient steppingstone for entry into Europe from coming over. Only those able and willing to contribute to the national good will do so.

The National Skills Council feels that this exercise can also be a pilot study for similar initiatives in other areas in the future. One of the Council’s remits is to identify any other sectors which would benefit from doing so.

Those who choose to make a future for themselves in Malta must have skills which will contribute to our country’s wellbeing and be prepared to integrate fully in our society. They should appreciate that they must be prepared to adapt and prepare themselves to do so. One should only wear a shoe that fits, and not try to squeeze into it when it doesn’t.