Part two of the interview with Joseph Farrugia, the Director General of the Malta Employers’ Association, discussing family-friendly measures, education and labour shortages amongst other subjects.

Something which was brought up during the Malta Business Weekly’s most recent business breakfast was the need for more flexible family measures.  What are employers ready to grant to provide for a better work-life balance?

As an association we are fully in favour of family friendly measures. It’s a culture that is coming into our country; a lot of private companies already have a lot of family friendly measures implemented. 

What we don’t want however is that there is an imposition by which anyone can ask for any family friendly measure.  At the business breakfast, a case of a maid who asked for tele-working was brought up by one of the members of the audience.  We know what the maid wanted – a shorter working week at full pay; obviously she knows full well that her job cannot be done via tele-working. These are the things that cannot be tolerated in the private sector. 

Family measures today are becoming more widespread in the private sector as I said. However, it has been suggested that there is a link between family friendly measures and the fertility rate – that we can encourage women to have more children with more family friendly measures – as if the weight of the birth rate in Malta is going fall onto the shoulders of the employer as well. 

I’d like to point out that when Malta had the lowest rate of female participation in the workplace in Europe; we still had a fertility rate which was very low.  This is a very complex issue and you can’t just snap your fingers and solve it, but what is definite is that there is no direct correlation between family friendly measures and fertility rates.

Also during the Malta Business Weekly’s most recent business breakfast we heard that one of the biggest challenges in the work sector was a rising average age in workers.  This means that young workers are all the more important to you as employers.  Are youngsters being properly prepared for entry into working life?  Is our education system providing youths with the mentality and capability to work?

Another point related to this question that came out of that business breakfast was that Malta has the highest rates of school dropouts in Europe.  This is alarming; and we need to get to the bottom of it.  We need to see why youths prefer, relatively speaking, to not continue with their education.

 The answer isn’t easy to find, as there can be a lot of factors at play.  It could be a question of social background; but something we rarely hear people ask is whether education is really paying.

Is it true that in the best manufacturing companies you have occupations which are low-skilled where the take-home pay is higher than graduates who work in the public sector?  These are the type of questions that we need to ask.  We have seen the inequalities in the distribution of income be removed bit by bit; but to encourage more people to stay in education, we actually need to increase inequalities because the gaining of qualifications needs to be actually worthwhile for students; they need to see a return on their investment.

For example; you could have two 28 years old people in front of you. One started working at 17 years of age and had a good pay working a low-skilled job within the manufacturing industry.  The other studied for a number of years and graduated, and is now earning less than the other person in the low-skilled job.  These are realities, together with other realities that one must see. 

You mentioned youths being valuable to employers, and you are absolutely right. One of the things we don’t want in Malta is that our youths go work in EU countries and then are replaced with foreigners.  Basically, a brain drain compensated by bringing in workers from across the world.  The priority of Malta’s labour market should be the Maltese, and preferably in the private sector.

We get very worried when we see the public sector growing; we are already in a situation where 30% of workforce in the private sector is foreign.  That foreign workers come and work here in Malta is not something which is in itself wrong – but we need to be careful that the private sector, which is the motor behind the economy, does not strongly depend on foreign workers and that the Maltese all end up working in the public sector. 

Despite the influx of migrants coming to work in the country, recently the MEA has spoken of a labour shortage; do we still find this shortage prevalent in Malta?

The demand for labour is continuously on the increase.  A lot of private companies are not finding people to work, and so they are falling back onto foreign employees. 

There is an important change to note in this as well.  Up until a few years ago, the majority of foreign workers in Malta were coming from the EU whilst those that we call third country nationals were few in number.  Today, this trend has been reversed.  Since a lot of European economies are now recovering and generating their own work, less and less EU nationals are moving in search of work.  Therefore the ratio of EU to third country nationals is skewing towards the latter, and a lot of workers coming to work here are coming from outside of Europe.

Unemployment is going down across Europe – some countries, such as Germany and Hungary, even have less unemployment than Malta.  Hence, there is now going to be a Europe-wide competition between these countries for the same third country nationals which are, at the moment, coming to Malta.  If these third country nationals see that the situation in other countries is better than in Malta, they will go there.  That is already happening to some extent; the rental situation is affecting foreign workers, including professionals, like it is Maltese.  We have a lot of reports of foreign workers coming to work here, and then leaving after a short time because it’s simply not worth living in Malta from a financial point of view. 

One of the most recent debates to come to light is on whether to abolish day-light saving hours and instead stick to one fixed time.  How does the choice between winter and summer time affect employers?

This has been blown a bit out of proportion I feel.  If we keep summer time, it could affect certain businesses in the sense that they wouldn’t have to swap the clocks twice a year, possibly making dealings with international clients a bit smoother.  I think that for the employee, it also helps to have longer days in terms of daylight – at least come winter it wouldn’t be dark once they leave work.  So I think that the general sentiment is that if we had to keep summer time, it would be best.

One of the big complaints heard are about companies that are facing big turnovers in workers, meaning that companies end up training and re-training more people.  Is this a reality, and what’s the solution if it is? 

When you have a labour shortage, the employee looks for what is best for him.  So if he or she has a package and another company offers to add 5-7% onto it – the worker is going to try his or her luck at this company.  You can understand that. 

Turnover can, up to a point, be healthy – but when it goes above a certain level it can become a serious threat.  It can even affect the decision of companies to provide training or not.  I make reference again to the fact that 30% of workers in the private sector are foreigners.  If many foreign workers are leaving Malta soon after they arrive; it could holding employers back from providing training, as they would want a certain measure of stability.  Training is a cost that they expect a return from.

In terms of a solution, every company has its own strategies to retain employees. There are companies that throughout the years according to seniority improve the employee’s package, something which is an incentive in itself.  Career progression is another one – someone with a certain measure of experience at a company has more of a chance to gain a promotion there rather than starting over elsewhere.  Some companies even offer retention bonuses awarding employees who stay for a prolonged period of time. All told, there are a number of means that can be used to reduce turnover.