It's an economy that needs foreign workers, survey finds

MEA Director General John Farrugia said that in the short-term, foreign workers plugging the labour shortage seems like a solution, but which would contribute to severe problems down the road 

An MEA survey found that four out of every five companies are facing increased pressures to improve wages
An MEA survey found that four out of every five companies are facing increased pressures to improve wages

A Malta Employers’ Association (MEA) survey on wage inflation found that Malta's economy requires a lot of foreign workers due to labour shortage across the board. 

Director General of MEA, Joe Farrugia, presented the survey results at the MEA headquarters in Valletta and said that four out of every five companies are facing increased pressure to increase wages.

The survey was conducted with employers and followed by an online survey carried out a few months ago. The largest number of respondents (34%) came from small companies employing between 10-49 employees, followed by medium-sized companies (28%) employing between 50-249 employees.

450 companies responded to the survey.

52% of all responding companies said that they strongly agreed with the statement that they have been experiencing calls for higher wages while 32% said that they agreed. All kinds of employees have asked for better renumeration packages, be it skilled or manual workers.

This, the survey said, is juxtaposed against all companies employing foreign workers because of labour shortage. 14% of all companies said that more than half of their employees are foreign. 

The survey sample was spread over many different categories of companies: manufacture, wholesale and retail, hospitality and tourism, and the financial sector.

The survey found that 82% of companies are not covered by a collective agreement either. The factor most quoted as responsible for wage inflation is labour market shortage: the demand for workers is greater than the supply.

For this reason 58% are employing foreign workers—this reflects the phenomenon of population increase, Farrugia said. The number of foreign workers is now more than 50,000 and it’s still increasing.

"We are attracting more third-country nationals than before even though we’re still attracting EU skillsets. In the short-term, more foreign workers would help the situation, yes, it's a quick fix but in the long-term this could create further problems, a vicious circle that would contribute to higher pricing in the property market for example," Farrugia said.

He also said that the female worker potential has also been tapped and is at its current peak.

"The female resource has been tapped as well—the increase in labour demand cannot be matched by labour supply, including female participation. Labour shortage is being addressed by an ever-growing influx of foreign workers. Even pensioners are working to to supplement their pensions in order to maintain a decent standard of living," Farrugia said.

Due to labour market shortages, Malta is seeing a lot of labour turnover, the survey found. More than 30% of respondents said that companies experienced a labour turnover of more than 20%.

24% of companies said that all kinds of workers quit to look for another job, while 23% said that the skilled segment contributed the most to labour turnover.

70% of these labour turnovers have done so because of better renumeration packages.