Malaysia urged to review 80:20 workforce plan for manufacturers

Employers say plan 'not possible to achieve' by deadline

Malaysia urged to review 80:20 workforce plan for manufacturers

Employers across Malaysia are calling on the government to review its 80:20 local-foreign workforce rule for manufacturing sector businesses, according to a new report.

The policy, introduced in 2016, mandates employers in the manufacturing sector to have locals make up at least 80% of its workforce. The initial deadline was Dec. 31, 2022, before it was extended by the government to the end of 2024.

Despite the extension, employers are still saying the rule is not achievable.

"The government needs to review the policy because it is not possible to achieve the 80% target," Malaysian Employers Federation president Syed Hussain Syed Husman told Free Malaysia Today (FMT). 

Yeaw Kok Kwey, president of the Malaysian Rubber Products Manufacturers Association, added that the rule was not possible to achieve because locals are unwilling to enter the "dirty job" sector.

"Doing dirty jobs is a no-no for them, so how are we able to fill this employment gap? Foreigners are the only answer," he told the FMT.

Levy system, technology can help

This 80:20 target can be achieved, however, if the sector becomes more dependent on technology, according to employers.

"Measures to assist manufacturing employers to digitalise processes and automate production should be enhanced, so that the manufacturing sector can reduce its current reliance on a labour-intensive system," Syed Hussain said as quoted by the FMT.

The implementation of a multi-tier levy system can also help, according to Federation of Malaysian Manufacturers (FMM) president Soh Thian Lai.

"The FMM has been a strong supporter of a market-based levy mechanism and has, since 2009, been proposing the government introduce a multi-tier levy mechanism as a means to reduce the dependence on foreign workers," he told FTM.

This system sees to it that companies with high number of foreign workers are charged with higher levy rates, according to The Star. The plantation and construction sectors, which also employ many foreign workers, are under this system.

According to Lai, the government should have "necessary structural changes to foreign worker policy" to support the workforce's transformation.

Employers across Malaysia have long been urged to prioritise the hiring of local employees over foreign ones, particularly when the government launched its Foreign Workers Employment Relaxation Plan in January.

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