Updated 6.20pm with MUT's reaction
Business leaders have recommended increasing compulsory education by two years to 18 to address the alarmingly high number of early school leavers.
They also suggested an overhaul in the education system to improve standards for both students and teachers.
Human capital, both in terms of volume and skills is the main stumbling block being faced by businesses in Malta.
In its national workforce strategy launched on Wednesday, the Malta Chamber made a number of recommendations to nurture, attract, retain and upskill talent so as to boost productivity and increase the added value provided by the workforce.
The document identifies four key workforce challenges experienced by industry. These are:
- encouraging active labour market participation by increasing the female participation rate,
- promoting active ageing
- focusing on tackling skills gaps and mismatches to address systemic gaps, and
- incentivising upskilling and reskilling.
The Malta Chamber also made recommendations to attract and retain local and foreign talent to fill the gaps in the Maltese labour market. and suggested ways to improve productivity and workers' added value as well as addressing underemployment in certain sectors.
Malta Chamber president Marisa Xuereb explained that its recommendation to increase the compulsory education age would make post-secondary education compulsory too, leaving students no option but to continue studying rather than leaving school empty-handed.
She said this would also help when these students realise that they had made a mistake to leave school so early and would come in useful if they opt to attend in-work courses to increase the level of their education.
Drop in sixth form students
Last year, 5,225 candidates registered for SEC examinations, representing just 85% of the 5th former cohort. Out of the registered candidates, 60.1% managed to obtain six O level passes.
Meanwhile, MCAST data indicates that between 2011 and 2021, 830 students dropped out of Level 4 while 208 students dropped out of Level 5.
"This shows that a substantial amount of young people are failing to complete a Matriculation Certificate/Vet Diploma (iv) or an Undergraduate Diploma (Vet Higher Diploma) which are nowadays considered as general requirements for entry-level jobs.
"It also demonstrates that a considerable number of students entering MCAST are not always successful in completing such formal education," the Malta Chamber observed.
For a more competitive and resilient economy
The document stresses that immediate action needs to be taken to ensure a more competitive and resilient economy.
"The necessary skills in the workforce need to be provided to further boost sustainable innovation across different industries. A holistic approach to strengthen the human capital must happen immediately," it says, adding that if the serious workforce limitations are not addressed "the country’s future wealth and prosperity will be compromised."
Marriage tax rate
The Malta Chamber proposed an overhaul in the married tax rate category, which, in its current structure, disincentivises the second spouse - traditionally female - from gainful employment.
It also called for measures that would "encourage more balanced utilisation of leave entitlements between women and men after childbirth".
And it criticised the fact that parents who are not socioeconmically active are excluded from free childcare, suggesting they are most likely to benefit.
It also recommended the introduction of measures that encourage older employees, active in the black market economy, to transition into the mainstream economy.
An example of such a measure would be to subsidise in-house child care and family support arrangements for families. This will have a two-fold advantage: encourage more female participation in the workplace and encourage current individuals providing such services into formal employment.
It proposed the creation of personal taxation structures that are designed to attract rather than detract foreigners from working in Malta. The Malta Chamber said Malta was being used as a stepping stone for such employees and employers were finding it hard to retain these workers.
It recommended shortening the time and red tape involved to get work permits, which currently stands at around eight weeks.
It also called for an improved process for family-relocation for approved work permit applicants, with work permits renewable every three years, following the first successful year.
It said the salary requirements being asked for third-country nationals who wished to relocate their family to Malta were illogical because the current benchmark is higher than what the average Maltese employee earns to support his family.
Over half of foreign workers leave after one to two years
Approximately 46% of new EU workers and 42% of new TCN workers leave between one and two years after entering the Maltese labour market, and 62% leave after between two and three years. Of all new entrants, 54% leave after between one and two years.
It said an international marketing campaign showcasing Malta as a career destination was needed and proposed tax breaks for the first five years when highly qualified Maltese working abroad return to Malta.
Malta Chamber CEO Marthese Portelli explained how in a recent survey it carried out, 77% of businesses reported having trouble finding employees of varying skills, subsequently impacting their respective operations. 61% said that hiring challenges were limiting their company’s ability to operate at full capacity. Furthermore, 64% reported that their staff were looking for higher salaries.
MUT: address shortcomings instead of shifting responsibility
Reacting to the chamber's proposal, the Malta Union of Teachers said that schools were not "producers of workers to meet the needs of businesses".
The MUT said in a statement that education was beyond the competence of the chamber's members.
It claimed that businesses' impact on education was leading to "low-level training programmes" that match the sector's current needs.
"Businesses want to shrug off their responsibilities to train new workers, expecting educational institutions to carry out training through the proposed extended compulsory school age.
"The chamber would best to see how some businesses are encouraging young students from discontinuing their studies after a few years of post-secondary education by luring students through initially attractive salaries," it added.