The amount of resources being wasted while trying to employ third country workers "simply does not make sense", CEO of the Chamber of Small and Medium Enterprises (SMEs) Abigail Agius Mamo said.

As an example, she highlighted the resources businesses waste due to the high number of their applications for third country workers being rejected by the authorities, among other things.

Malta's population has increased significantly in the past 10 years, with statistics from the National Statistics Office detailing that there are now over 115,000 non-Maltese nationals in Malta, a section of whom are Third Country Nationals (TCNs).

Asked about SMEs employing foreign workers and the adverse effects they would suffer if the country was to deviate from an economy based on consumption, Agius Mamo told The Malta Independent on Sunday that the country is caught in a cycle of wasting resources.

She said that TCNs make up a large section of the workforce and this is mainly driven by the difficulty in finding local employees. "Businesses at any point would prefer employing a Maltese person, if they found them. Businesses have no option but to employ TCNs, but, in reality, it is not cheap. Businesses must pay quite a bit to be able to bring workers to Malta," Agius Mamo said.

She added that it costs a lot for the TCN to be able to come to Malta, apply for a Visa, and afford living in the country. Moreover, she said that most end up becoming employed through an agency, or a middle company, which take quite a percentage of their wages.

Quoting a survey conducted by the Chamber along with Misco, businesses are saying that there is a labour shortage problem.

"We are not even managing to source people from abroad to cover what we need. Businesses are also very concerned about the level and quality of skills of the workers brought to work on the island," Agius Mamo said. She also said that foreign workers end up leaving after a few months, with the cycle starting all over again.

"Language barriers, skills or lack of -  all this effort is being made to attract workers who are not of the right quality, and momentarily, because they would soon leave and need to be replaced," Agius Mamo said.

She continued that SMEs often end up relying on agencies, as they would not have the time or capacity to be able to source workers themselves, and they would just need people, employing whoever was willing to work.

"If we want to source better quality employees, we need to establish bilateral relations," Agius Mamo said. She explained that a business should not have to go through an entire application process, just for the applicant to be refused.

She also said that businesses do not have information regarding any issues in the applicant's home country, nor intelligence on whether they are falsifying a certificate.

Noting bilateral relations, Agius Mamo suggested that countries can conduct the background checks between themselves and check if people have the right skills and if they are happy in coming to work in Malta.

"The businesses would then know that they will employ the employee, and would not have to apply for 30 employees because of the high refusal rate if they only need one or two," she said.

"We are not appreciating how much in terms of resources are being wasted, not only on the business side. If you apply for 20 employees, but you need only two, the business would be spending around €250 per application," Agius Mamo continued, adding that at the end of the day, someone will also need to process those applications and conduct background checks. "All wasted resources which are very dear at the moment."

Rejections, she said, could happen on a number of grounds where the genuine intention of coming to work in Malta is not sufficiently proven. "The large number of applications however have led to less scrutiny and quicker rejections as well. This was the responsibility of the diplomatic service but has partly recently been taken over by Identity Malta."

She also said that the current problem with foreign workers is that we are not managing to retain them.

"How are we going to attract quality workers and retain them? We must look at what other countries are doing. Many offer packages for people to be able to bring their family with them," Agius Mamo said.

Attracting quality employees, who will be paid for that quality, would then lead to finding a way for them to live in Malta. If rent is a problem, as it is still very expensive, other countries have provided some form of support and intervened, she said.

"We need to look at Malta in the bigger picture. How competitive is Malta? Are we adopting the right strategies or has it become a rat race? All these resources are being wasted to get nowhere," she said.

Agius Mamo added that re-employing and re-training someone is a very expensive process.

"A business should not have to do that multiple times, it is not something we afford as a country. We are doing it because there is no other option, but we should be able to strategise better," she said.

Agius Mamo was asked about the countries' economic model, and talks of a possible economic transition, or adopting a different model.

"We surely need a new model. We have a sort of national agreement that we need to start moving less from an economy based on consumption and numbers and more towards an economy built on value added and quality," Agius Mamo said.

She said that a strategy has not been found yet, but the country must work more sustainably to start moving in that direction, as the alternative needs to be defined.

"It will not happen overnight, an economy which is built on consumption will be retained while other economic pillars start taking over, so it will be a gradual change. However, the longer we take to start working on a strategy, the longer this shift will take," Agius Mamo said.

She added that in the meantime, this has an impact on the quality of life, investor appetite, stress on infrastructure, which are already being felt.

Agius Mamo said that changing the economic model does not seem to be a focus.

"A change does not mean completely wiping out what we've been doing. Certain elements will still rely on consumption, but hopefully we can start becoming less dependent on consumption," she said.

Agius Mamo spoke of financial services, pharmaceuticals, aviation - all very high value-added sectors, which the country needs to continue building on.

Additionally, the country must also find new sectors which are solid, value-adding and that attract a high-quality workforce who contribute more return, rather than creating collateral damage, she said mentioning the state of construction. "We cannot continue seeing this quality of construction," Agius Mamo said, adding that eliminating construction is not the way to move forward, but rather it's about looking at a different way as to how things can be better planned.

"It is becoming so evident that we are lacking good quality planning and a strategy which is owned across ministries," she said, emphasising that different ministries came up with their own strategies during the pandemic, for instance.

Agius Mamo said that unless there is joint ownership, elevating a good quality tourism strategy, the Maltese experience cannot be achieved, especially if we do not have commitment from Infrastructure Malta, the Planning Authority and other areas which have an important impact.

"We think too much from day to day, we are lacking a strategy and we are not using the fact that Malta is small and we can all sit around the table and agree on something as an advantage," Agius Mamo said, describing what is being done as "firefighting".

She said that in Malta people have become accustomed to working in their respective areas, irrespective of how it will impact other sectors.

"We feel this fragmentation in the way things are being done," Agius Mamo noted.

Turning to traffic, a measure that has been spoken about recently was the staggering of services in the morning rush hours, to help ease traffic flow.

In a previous interview with the CEO five months ago, she had said that businesses will need to open far beyond their normal operational hours if certain services are to be offered after 9am.

Asked if there has been progress in the discussions, Agius Mamo said that the Chamber has presented a set of tangible proposals as to how the situation can be eased.

"At the moment, we are meeting with Transport Malta and Ministry officials in order to see as to how far we can start organising a shift in the way this can be implemented," Agius Mamo said.

She said that some sectors offer more flexibility than others, and not everything will have to move, adding that looking into where some incentives could help is important.

The Chamber has also presented a new proposal regarding trailers. Those needing to travel to Gozo do not need to drive all the way up to Cirkewwa but they would depart from Marsa and go directly to Gozo, which she said would speed up the process and eliminate having these vehicles driving across the island on a daily basis.

She said that there are good proposals that would make a difference and that everyone understands that adjustments are needed.

"We insist that government leads by example as the biggest employer. It would help seeing government make the effort to find collaboration. This does not mean that everyone will change in the same way," Agius Mamo said, emphasising that certain businesses, such as the package delivery sector, has to deliver in the shortest timespan. Restricting their operation might affect them, as they are already operating outside peak hours to be able to benefit from lower traffic, she said.

"But there are some things that can be done and we are studying different options to provide a number of solutions," Agius Mamo said, explaining that many small interventions could make a difference.

She emphasised that changes need to be made soon, as the situation is getting worse by the day, impacting business' productivity as well as costing the economy.

The recent drive on climate neutrality also pushes businesses to become more environmentally-friendly. Asked if it is feasible for an SME to undergo a green transition, Agius Mamo said that not every business is aware of how to do it, but said it can certainly be done.

"Firstly, we need more awareness and examples of how different businesses of different sizes and sectors have managed to make this transition, and that it made business sense as well," Agius Mamo added.

She said that when discussing how to become more environmentally-friendly, the country must be talking about using fewer resources and operating more efficiently, which in itself signifies less cost on energy and water.

"Businesses know how to do business, they are not engineers, they might not know exactly where to start from, but the information is there and it is easily accessible. It is up to us and different entities to increase the level of awareness for businesses to start looking at these things," Agius Mamo said.

She said that businesses may also face a cost barrier, so environmentally-friendly measures must make business sense, in terms of recuperating the investment.

"We know of businesses that have changed their cooling systems; fridges, freezers and air-conditioners, and within two years they got their investment back because of how efficiently they were running," Agius Mamo said.

There are a number of schemes available today from renovating the whole business to make it more sustainable in terms of energy and water efficiency, to simple interventions such as changing a fridge, she said.

"There is support and we are noting a lot of interest in terms of how businesses will start to operate more sustainably," she said.

Agius Mamo said that an element the Chamber is focusing on is showcasing examples of what businesses have done, how they did it and how they succeeded in terms of the environment.

"When we speak about carbon-neutrality, there is still a long away to go, but we already have a number of medium- to large-sized companies which have a carbon neutral plan," she said.

She said that it is a positive sign that certain businesses have started implementing this, showing their awareness.

Agius Mamo emphasised that when it comes to larger businesses, it would be a regulatory requirement to start planning in that direction. But even when it is not required, there is already a lot of interest from businesses to become more sustainable.