It is well established that human resources are scarce. Malta, like the rest of Europe, is facing a low birth rate and an ageing population. In view of all this, Malta is still able to achieve economic growth without pushing its population beyond the country’s carrying capacity.

The Malta Chamber of Commerce, Enterprise and Industry has been advocating for this in its various policy papers, most recently its 2024 pre-Budget document.

The tendency to depend on utilising inexpensive labour, which was the rule of thumb during the past years, needs to be curbed. We have reached a point that introducing a cap on the percentage of non-EU nationals that a business can employ is inevitable. Our proposal excludes healthcare or the provision of essential services such as waste management and public transport.

Temping agencies, which should be properly and adequately regulated, should fulfil the seasonal staff requirements of the hospitality sector. Limitation of use of successive temping assignments of the same worker, to the same commercial entity, irrespective within which industry, should be controlled, and were necessary, prohibited. Repetitive periods of temping services within the same entity could be indicative of abuse.

Earlier this year, the Employment Agencies Business Section within the Malta Chamber formulated a self-regulatory code of practice for the industry. The primary goals of this code are to promote high standards of ethi­cal conduct on the industry, stipulate the rights of candidates and employers, and bolster public trust in employment services. The Malta Chamber’s business section is currently promoting this code of practice.

Those subscribing to it are committed to professional employment services, through a more stringent framework for self-regulation that emphasises compliance with legislation, integrity, transparency, professional relationship standards, fair competition, diversity, safety, expertise, employment practices, ethical international recruitment, and confidentiality.

The Malta Chamber also believes that third-country nationals (TCN) should be able to change their employer freely once they obtain permission to work in Malta. Moreover, when a TCN has been employed with the same company for more than a year, employment should shift to the company providing the job, while employment licences should be extended for an additional three years after the first successful year of employment with the same employer.

In our pre-Budget document, we also recommend transforming the Key Employee Initiative into a Maltese Blue Card for skilled TCN professionals. This would be based on a Skills Forecasting Policy that would determine and prioritise specia­lised skills in the processing of applications.

The Malta Chamber favours a more strategic offering for highly skilled non-EU citizens, who want to live and work in the country to fill pressing qualitative skill gaps in the labour market, with clearly defined eligibility criteria including high salary thresholds.

Another aspect that goes hand in hand with human capital is education. The Malta Chamber has repeatedly emphasised that Malta’s education system requires an overhaul. Education needs to be safeguarded from any political interference and the attainment of short-term goals.

For the Malta Chamber the most vital is the review of methods of assessment to make it more accessible and holistic (incorporating also micro credentials). Furthermore, the correct use and interest in technology needs to start from an early age in all subjects.

Education needs to be safeguarded from any political interference and the attainment of short-term goals- Kevin Mizzi

To enhance our country’s productivity, it is crucial to invest in the necessary training and upskilling of workers. We believe that embracing techno­logy for task automation can significantly contribute to achieving higher levels of productivity, because automation strategies can and should complement our workforce.

Investing substantially in training and supplementing this with investment in more advanced technology will therefore lead to increased productivity without the necessity of adding more people. On this point we affirm that grants under various programmes should not be based on the crea­tion of new jobs but on improving productivity through automation.

Without corresponding productivity gains and a thorough rationalisation of resource use in both the public and private sectors, we run the risk of permanently losing our competitiveness.  In this context, while it is understandable that the public sector needs personnel at specific levels, there is an overstaffing problem in various government agencies and organisations.

This, coupled with the government effectively poaching human resources from the private sector, is leaving private industry at a disadvantage.

While curbing our population increase, we should not procrastinate further to allow 61-year-olds eligible for a reduced pension, to transition from employment to retirement gradually until they reach retirement age by taking an increasing portion of the pension while gradually reducing their working hours. Moreover, the country needs to implement an auto-enrolment with opt-out mechanism for employees as soon possible.

The current situation underscores the urgency for Malta to take essential decisions to effectively tackle critical challenges. The foremost objective of economic policy should be to elevate Malta’s productivity and competitiveness.

It is imperative to transition Malta’s economic growth model toward a more sustainable framework, allowing for growth with reduced labour input, ultimately enhancing the quality of life and alleviating stress on Malta’s infrastructure across the board.

Kevin Mizzi is head of policy at the Malta Chamber of Commerce, Enterprise and Industry.