As the economy grows, a need to address Malta’s labour gap

The Maltese government’s growth-friendly budgets and sound fiscal policy have transpired into a thriving economy that is now expected to remain well above the EU average in terms of growth, having secured its highest-ever surplus in public finance besides record-low unemployment figures. 

And yet, this robust economy still poses major challenges: failure to address both labour and skill shortages can only hinder progress and impede growth. 

These concerns were repetitively raised at a dialogue meeting organised by the Malta Chamber of Commerce, Enterprise and Industry which I personally attended. As a result of having virtually “full-employment”, employers are struggling to recruit locals or even EU nationals and third-country nationals who are willing to take up particular jobs in a number of sectors.

We are also experiencing a mismatch in skills in certain industries, whereby employers are finding it hard to identify employees for certain highly-qualified jobs. This means a labour gap exists in terms of both quantity and quality which impedes companies who wish to enlarge their business operations.

This reality is not solely confined to the tourism or construction industries but almost all other sectors of the economy are either envisaging or encountering such constraints. In response, employers have resorted to recruiting foreign workers, most of whom are third country nationals. Single-permit holders increased to just over 8,000 by the end of 2016 from 2,757 in 2012. It goes without saying that a greater influx is anticipated in the coming years.

Nonetheless, this does not pose any imminent threat to the Maltese workforce, due to a growing economy. 

The surge in demand for foreign workers has proven to be a greater administrative burden, mounting additional pressure on Identity Malta’s operations. Single-work permits are issued through a centralised process where applications are vetted by the Immigration Police and assessed by Identity Malta together with the ETC.

The agency has now has initiated an internal exercise to fine-tune its operational functions in becoming more efficient, evaluate more streamlined ways to process permits faster, review existing procedures, and reduce processing time to just under two weeks.

Significantly, applications of highly-qualified third country nationals earning a gross annual salary of €30,000 are being processed within five days.

There is still room for further improvements as already shown in government’s preliminary plan presented to the social partners. Amongst others, the government is committing itself to allocate additional resources to Identity Malta, open two new front-offices, eliminate the requirement for experience or qualifications regulation for low-skilled work, extend the present vacancy exemption list to other occupations, and develop an online platform which allows applications to be submitted electronically. This will save ample time, diminish inundating paperwork and provide prompt and up-to-date information about the application progress.   

The changes at Identity Malta are primarily intended to address the ever-changing labour market demands in such a competitive environment. A growing economy requires additional workforce and rich skills.

In anticipation of future growth, we need to address the present labour gap in terms of both quantity and quality so as to further reap the benefits of a booming economy.

Julia Farrugia Portelli is parliamentary secretary for reforms and citizenship