Worker shortage remains top challenge for business, but skills are improving

Employee shortage remains the biggest problem for local businesses, but foreign workers arriving on Malta’s shores in recent months are more skilled than before, the Chamber of SMEs acknowledged on Monday.

The findings emerged at the presentation of the Chamber’s most recent quarterly SME Barometer, which asked over 400 businesses about their views throughout July.

Employee shortage remains far and away their biggest concern, as was often previously the case, with 45% of all businesses identifying the issue as their greatest worry.

Time will tell how the incoming labour migration policy, will change matters, the Chamber said. The policy is set to come into effect in August.

However, while the survey did not delve into the issue, Chamber officials noted that foreign workers entering Malta in recent months appear to be more skilled than the majority of those who joined Malta’s workforce in recent years.

Ultimately, “employee shortages and difficulty sourcing skilled talent locally are causing disruptions,” the Chamber said, particularly in sectors where skilled labour is necessary.

Unfair competition also ranks as one of the sector’s biggest problems, the survey finds, named by a quarter of small businesses as their biggest concern.

Reacting to this finding, the Chamber said this is symptopmatic of Malta’s business structures preventing small companies from competing at a par.

The most glaring example, the Chamber says, is Malta’s tax regime, which sees the profits of small businesses taxed at 35% while larger foreign companies can effectively pay just 5% in certain circumstances.

The Chamber also criticised the lack of regular enforcement against supermarkets and bottle shops which illegally sell alcohol after 9pm. This practice negatively impacts bars and restaurants, and may lead to “unruly behaviour” in Malta’s streets, Chamber officials said, admitting that some recent enforcement action has been taken.

The survey finds that that businesses are increasingly likely to view overpopulation as the most important issue the country faces, with 37% of respondents pointing to this issue, more than in previous months.

Meanwhile, a lack of good governance (31%) and corruption (26%) also rank highly, although both have dipped slightly since previous surveys.

The survey also finds that there is ambivalence over government grants and schemes designed to help businesses, with respondents evenly split among those who described themselves as satisfied by the schemes and others who said they were not satisfied.

Smaller operators and sole traders, in particular, find the schemes problematic, with almost two-thirds of them expressing dissatisfaction with the available measures.