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Factors Including GST Hits Job Market Hard

Posted by | January 8, 2016 | Advice, Career

Via Malaysian Digest : Several factors, including the imposition of the Goods and Services Tax (GST) have seriously affected the local job market, with many organisations being forced to retrench rather than employ.

According to Malaysia Employers Federation executive director Datuk Shamsuddin Bardan, at present, the environment has forced employers to rationalise their operations as sales dropped by some 40%.

Instead of employing people, he said employers were looking at either carrying out or have carried out retrenchment exercises, especially those in the production sector.

“They have been hit by the minimum wage policy as well the lingering effect of the GST,” he, adding that from July next year minimum wage is to go up by 11% in Peninsular Malaysia and 15% in Sabah and Sarawak.

He said this is because a large number of consumers were being cautious with their spending.

He said the job market had been further hit by the move to increase the retirement age from 55 to 60, meaning there are 200,000 employees who should have retired but are still working.

Shamsuddin pointed out that the government has also frozen employment, some 14,000 to 15,000 jobs in the public sector have not been filled, only critical jobs are being filled.

“All this has made it much harder for graduates to get a job a and there is very little that can be done,” he said, adding that some 200,000 new graduates join the job market on a yearly basis.

He said the MEF has suggested to the government to come up with incentives to get employers to not only stop retrenching workers but to employ workers.

He added that tax breaks could be one of the ways to get employers to change their minds and employ graduates who have yet to find proper jobs.

Shamsuddin said there is an urgent need to act fast as the World Bank and the International Monetary Fund have forecasted 2016 to be a recession year.

Centre of Public Policy Studies (Asli) chairman Tan Sri Ramon Navaratnam said with the economy slowing down and companies retrenching workers, it was harder for new graduates to get jobs.

However, he said good graduates who are proficient in English may not have a problem getting a job.

“Businesses cannot run on favours today, as cost cutting takes affect more and more businesses will want the best out of their employees, meaning higher productivity.”

He advised those who are about to graduate to start looking for a job before they graduate as only top graduates will be grabbed fast.

He said the main problem is the a structural issue, when the economy goes down only the best survive.

Ramon said unresolved issues were affecting the economy and the lack of confidence has caused a drop in investment in the country, adding that all this contributed to a weak job market.

Source : MALAYSIAN DIGEST | Factors Including GST Hits Job Market Hard

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