THE Covid-19 pandemic is the biggest destroyer of jobs in both formal and informal sectors. The pandemic has worsened the labour market condition, which had already been impacted by the digital disruptions in recent years.
The workforce in high-risk industries such as accommodation and food services as well as wholesale and retail are most vulnerable to reduced income, furloughs or layoffs as a result of the crisis.
Among occupations, customer-service and sales roles are at risk. Many jobs could be lost permanently. That, in turn, would greatly dampen consumer spending, with knock-on effects across sectors.
How can the government and companies help at this time? Can new jobs be created anytime soon? It is reckoned that most of the lost jobs will not return in the same form immediately even after the pandemic is defeated. Private sector will start to invest and create new jobs until they have faith and confidence in the economy and market recovery.
This means that job growth may trail behind the revival of the economy. The government can help to create short-term jobs to reboot the economy through the implementation of public infrastructure projects and small-scale socio-economic projects.
During the pandemic crisis, the government has swiftly taken decisive actions to safeguard jobs. These include an estimated RM17.7bil Wage Subsidy Programme (as at Sept 18, RM11.93bil was approved. benefiting 2.6 million employees), RM240mil Employment Retention Programme, RM1.5bil workers’ hiring incentive, RM2bil reskilling and upskilling programmes as well as RM800mil to support flexible work arrangement incentives.
The unemployment rate has moderated for two consecutive months (4.7% in June and 4.9% in May) after hitting a record high of 5.3% in May, suggesting that the worst of the Covid-19 impact on the labour market is seemingly behind us. There was a reduction of 28,200 persons unemployed to 745,100 persons in June.
Based on the Employment Insurance System (EIS) data, total number of employment loss has off the peak recorded in June (18,579 persons) in June to 16,660 persons in July, 9,261 persons in August and 6,688 persons for Sept 1-28,2020.
In addressing the unemployment rate, we must have a granular view about which industries and jobs are most at risks? What type of jobs and skill set that will be replaced and are needed in the near future? Skill-based jobs are essential to creating the momentum of sustainable job creation.
The EIS data showed that the manufacturing sector recorded the highest number of employment losses (24%), followed by accommodation and F&B (15%) and wholesale retails (14%) as well as professional technical (9%).
By job category, 57% of total retrenchment came from professionals, managers, executive and technicians. By average wage income, 85% of employment loss persons earned an average wage income between less than RM1,000 and RM5,000 per month.
While the percentage of job placements (re-hiring over loss of employment) has continued to improve to 22% in August and 43% as of Sept 28 from a low of 5.6% in June, it takes some time before the jobless rate is anywhere near back to pre-pandemic level of 3.3%.
The Covid-19 crisis has added new dimensions to the labour market outcomes:
(a) Increasing shift towards online business away from the physical and offline store means the requirement of manpower with soft skills and ICT skill set;
(b) Demand for manpower equipped with creativity and innovative in the application of technology and apps; and
(c) Effective policies intervention to reskilling and upskilling to facilitate the placement of jobs according to skill set requirements.
Both the government and private sector, including industries and companies, can consider the following initiatives and suggestions to ease the unemployment situation and create jobs for new job seekers:
a) Create an Exchange of Manpower Placement and Redeployment Programme through the sharing of information among the industry associations, labour agencies, and groups of large companies regarding job openings and skill requirement by industry, job category, wage, demographical and gender as well as age group.
This helps for better, faster matching between job seekers and employers. In order to reach out to all job seekers and improve the offer of employment services, multi-channelling of information about the manpower exchange portal is paramount, especially for SMEs and job seekers in sub-urban and rural areas.
b) The government must ramp up its efforts to support businesses and unemployed in the reskilling and upskilling through subsidies and tax rebate. This programme can be extended into 2021. There have been significant new job opportunities and short-term demand surges in the food and grocery delivery services and information and communication technology (ICT) sector as well as healthcare-related services.
Digital literacy and data solution services as well as technology-enabled management programmes must be developed to enable the workforce be technically ready to meet current and future-skill trends.
c) It is urgently needed a revamped national policy on the Technical and Vocational Education and Training (TVET), led by the Education Ministry and Human Resource Ministry as well as the industry experts and academia, followed by a strict implementation strategy encompassing short-term and long-term interventions to enhance the quality and technical competencies of domestic manpower.
d) Design rehiring, jobs exchange and re-training programmes dedicated for SMEs through effective and government-backed incentives.
e) Continued implementation of a co-funded jobs support scheme (through cash grant) between the government and private sector to encourage the internship and apprenticeship for school leavers and graduates as well as the hiring of unemployed.
f) Innovation-driven entrepreneurs are a significant source of employment. They use creative approaches of technology with minimum capital to solve existing or future problems faster, cheaper, and better with new tools and technologies.
Lee Heng Guie is executive director at the Socio-Economic Research Centre. Views expressed here are the writer’s own.