It was a number that made headlines: Macau’s unemployment rate had dropped to 2.7 percent. By the end of last year, the rate was at its lowest since the handover and has remained stable since.

Still, it seems neither employers nor employees are getting all they want out of the labour market.

The latest figures indicate that the total labour force is 332,000 people. From November to January, there were 8,900 unemployed – 100 fewer than in the preceding three months.

It is a very different picture from 2000, when the unemployment rate was 6.8 percent. Since then, it has been downhill all the way for unemployment, except for 2009. The city, according to the Monetary Authority, has now achieved full employment.

For Macau Polytechnic Institute associate professor Sunny Chan Cheuk Wah, the decrease in unemployment shows that as the economy grows, so do job opportunities. However, the public policy expert is concerned there are still many low-skilled or unskilled jobs that need thousands of workers and absorb a lot of younger workers. Many are employed by the city’s biggest industry.

“Because the profit margin of casinos is very high, they can pay a very high salary, even for the lowest-skill-level employees,” Mr Chan says. But high-paid work may “give a very wrong signal to the younger generation” who could neglect further education, a situation he says is a “very serious problem” of a “sweet covering a poison”.

Overpaid, under delivering

University of Macau professor Davis Fong Ka Chio is head of the human resources policy research group of the Economic Development Council. His group last month found that Macau’s human resources were “quite limited”, and there was a “very urgent need to have more manpower”. The group is now working on solutions.

Mr Fong says a lack of workers led to higher pay levels in the last quarter, not only in big companies but also in smaller ones that could not compete financially for labour.

“There’s an increasing salary trend but the quality of the service is decreasing,” he says. Mr Fong argues that raising pay for some skills can harm productivity and raise product costs, further fuelling inflation.

The Federation of Trade Unions has a different perspective.

Federation vice-president Ella Lei Cheng I says that while the unemployment rate has dropped, thousands of locals still do not have work and the underemployment rate remains high, at 1.7 percent.

Ms Lei recognises that pay levels should rise because of the labour shortage but points out that data from the Statistics and Census Service show that “the median income of local workers has remained unchanged in the past 10 consecutive quarters, indicating that local workers’ wages and benefits have not reasonably adjusted due to the impact of the policy of labour imports”.

She told Macau Business that although the hospitality industry is profitable, “the workload and labour intensity of employees have risen substantially, but their salaries have not, showing that… employment status and welfare in Macau are not yet satisfactory”.

Prosperity, protection

Small and Medium Enterprises Association director Kenneth Lei says he is worried about labour shortages. He argues that it is unfair that Macau’s economic growth benefits only a few sectors, while harming others.

Finding quality employees is difficult and he “can’t see the government doing anything” to reverse the situation, he says. Businesses are reluctant to expand because a shortage of human resources hinders their growth. Further compounding the problem for small businesses is that employers feel they cannot fire poorly performing employees because finding a replacement is difficult.

“To operate well, the first thing businesses need is a labour force. No people, no output, no results,” he says.

Importing workers has long been a point of contention between employees and employers. In 2008, Macau had 104,000 non-resident workers. After the introduction of government labour import restrictions, the number fell to a low-point of about 72,000 workers last May. Since then it has been rising, peaking at 75,800 by the end of December.

The Federation of Trade Unions is sceptical about these figures. Ms Lei believes the biggest problem in the labour market is a lack of supervision of labour imports and a flood of illegal workers. “This not only infringes local workers’ employment and rights, but also will lead to a series of social-security-related issues,” Ms Lei says.

She suggests the government should clarify the way it calculates imported labour quotas and increase transparency in dealing with applications. Penalties for transgressions should also be made tougher. And the government should ensure imported workers are the first to be dismissed during a recession.

Preferential treatment

The Small and Medium Enterprises Association’s Mr Lei says labour shortages have already forced some companies to shut down.

SMEs represent about 90 percent of the companies in Macau, he says. They provide the bulk of the jobs but cannot match the pay and benefits offered by big companies. The government has a clear obligation to create different policies for different sectors, Mr Lei stresses.

“If the policy is the same and leaves you no choice, that is not good,” he says. “The government must investigate the situation case by case, to know the root cause why the companies can’t hire local people first.”

A realistic plan would begin with listening to the feedback from employers and end with the lifting of restrictions on imported labour, he argues.

That process should start now, while the economy is in full flight, because Mr Lei fears a prolonged imbalance in the economy could be dangerous, especially if Beijing changes its outlook on gambling. “The government needs to act while times are good, not when they are bad,” he says.

The trade union federation’s Ms Lei hopes the business community can share its economic gains with workers by increasing pay. She wants the government to “promulgate policies for ensuring employees’ promotion opportunities, and encourage workers to participate in training for self-enhancement”.

There is broad agreement that a long-term plan to improve the quality of human resources and retrain labour is required. Academic Mr Chan says the government should move on a plan that brings together the professional associations and builds an accreditation system.

It would help employers and employees. “People with higher education get more choices,” he says, adding that better trained staff would attract employers interested in starting a business in Macau.

Mr Chan says the government should not close the door to imported labour. Foreign workers can transfer skills to the local market and nurture local talent.

Evolving response

In written replies to questions from Macau Business, the government’s Human Resources Office said it would continue to monitor the evolution of the labour market.

The office says that before approving the hiring of imported workers the government always gives priority to residents but is willing to allow imported labour to do jobs for which there are insufficient resident workers.

It also says it is keen on promoting training.

As for the Small and Medium Enterprises Association’s complaints, the office points out that the government has accelerated the procedure for approving the import of labour by SMEs.

The Human Resources Office also says it already has a database about the number of workers in Macau with higher education. More data is being collected to turn this into a general database about human resources, which will allow the administration to make better projections and so better plan future policies.

In need of manpower

The biggest game in town is not immune to labour shortages.

The gaming industry is the biggest single employer in Macau with about 44,000 people on the books last June, excluding the junket operators.

The Macau Gaming Industry Employees Association says there is a dire need for more staff.

“There is still lack of human resources in the gaming industry. Actually, there are lots of vacancies in all the casinos,” the association’s head, João Bosco Cheang Hong Lok, told Macau Business. “It’s difficult for the casinos to hire enough workers who are really suitable for the gaming industry.”

By the end of June last year there were 628 vacancies in the gaming sector, a 74 percent increase on the year before, according to the Statistics and Census Service. Industry insiders say demand will spike with the opening of Galaxy Macau, which will need close to 8,000 employees to operate at full steam. So far, the government has allowed the operator to import just 2,000 workers.

The problem, according to Mr Cheang, is the speed of the development of the gaming industry was never taken into account. “It’s hard to build a healthy and steady structure in such a short period,” he says.

The effects of the shortage are felt acutely by those already employed by the casinos, he says. They are required to work overtime, creating irregular working schedules that can preclude them from taking steps to improve themselves, such as additional study.

Besides leaving workers with little time to invest in school or training, the shift system may cause other problems, such as disrupting their relationships with families and friends.

Payday with a price

Dealers account for 43 percent of the gaming industry’s workforce and it is difficult for them to change jobs or seek careers in other industries since most are not trained outside the industry.

“The government and the employers should do more to solve the problem of lack of human resources in Macau gaming industry,” Mr Cheang says.

He would like to see more continuing education for casino workers so they can climb the gaming industry ladder.

The labour market is unsure about the precise needs of the industry, Mr Cheang says. People need to be told which skills are in demand. He says it would be a good idea to create a mechanism for matching casinos and job candidates.

The upside for those in the industry is the above-average pay and benefits. These will be further improved after the government appealed to casino operators to share their good results with their employees.

Four operators responded with pay rises. Wynn Macau announced a 6 percent pay increase for the company’s non-management employees from February 1. Sands China said it would give full-time employees a 4.5-percent increase, starting on March 1.

Sociedade de Jogos de Macau announced a 5 percent increase for all staff, which took effect on February 1. The company also paid out bonuses. MGM Macau said it would pay non-management employees 5 percent more from March 1.

Macau Business contacted all six gaming operators but none would comment further on this matter.

Helping hand

Professional recruitment agencies find their services are in vogue as the labour market tightens.

With a small pool of available workers, recruitment agencies say they are finding it hard to match the right people to the right job. A lack of qualified and experienced candidates is a major issue but employers are also working out how to make the most of relationships with recruiters.

The industry has experienced remarkable growth in the past few years. As MSS Recruitment Ltd. director Jiji Tu told Macau Business, two years ago most people in the territory did not know what a recruitment agency did. Now, she says “more and more people are aware”.

While forging awareness in the market can still be tough for agencies, it is the lack of suitable candidates that causes most headaches. “The main challenge is the same as faced by many other employers; the candidates’ pool is still limited,” Ms Tu says.

There are either just too few workers with the right experience or they are overly cautious in making the move to a new job.

Managing expectations

Employers’ expectations are another issue. Ms Tu says some employers “may not understand the local market” and expectations “may need to be adjusted over time”.

The company’s market research finds that the majority of candidates come from blue collar sectors such as hospitality, gaming, retail and construction. There are also candidates looking for new jobs in tertiary services such as human resources, finance, IT or marketing.

On the other side of the labour relationship, employers mainly come to MSS Recruitment “for the most difficult roles,” she says. In other words, companies are looking for suitable candidates to assume management-level positions and they are not always available.

Macau HR director Mark Hammons sees the majority of demand for labour in IT sales and technical roles, retail sales, hospitality and accounting. Most job seekers have a background in administration, human resources, marketing and accounting.

A typical age range is between 18 and 50 years, but most candidates handled by Macau HR are in the early stages of their careers, aged between 20 and 30. More than two-thirds are based in Macau, with the remainder from Hong Kong, the mainland, The Philippines or the Middle East.

Restricted roles

Matching candidates to roles is made more difficult by restrictions on labour imports, which, in some cases, have resulted in a freeze on headcount.

“Some companies may not be able to find suitable candidates in the local market and they do not have the quota to hire overseas candidates, so they often will hold off on the hiring of new staff,” Mr Hammons says.

As a consequence, existing staff have to share the additional workload, and in some cases that leads to overtime, exhaustion and low morale, he says.

Foreign labour can be “very valuable” in terms of the skills they can share with Macau residents. It is a vision Macau HR tries to pass on to non-local candidates when they apply for a job.

In such a challenging labour market, Ms Tu advises companies to draft their own retention strategies. Training and tracking employees’ confidence and satisfaction levels are things managers should pay attention to.

In the short term, Mr Hammons believes the government “may consider loosening up some import labour restrictions in some strategic industries”.

The Macau HR director also thinks Macau should learn from the experiences of other places where talent is also in short supply, such as Singapore. Greater investment in training is also required, particularly bigger intakes for higher education and specialty programmes for Macau’s leading industries.

5,000 reasons to catch up

Training institutes welcome a new government subsidy on training but argue that more must be done.

This year’s policy address may have left some people disappointed with the decrease in the cash handout but Chief Executive Fernando Chui Sai On announced another perk; a MOP5,000 subsidy for residents aged 15 and up to spend on training.

Players in the field welcomed the new policy but some argue it is still not enough.

SIM Hospitality Training chief executive officer, Joseph Lo, believes the MOP5,000 subsidy is a “good start” that can be further built on. People need to have the opportunity to go for training, he says. “The government needs to do more than just subsidise,” he says.

Attending training is not as simple as people may think. As “there are not enough people, everybody is working overtime,” making it hard to go to classes.

Created in 2009, SIM Hospitality Training, which has a close partnership with Singapore’s Shatec Institutes, trains at least 1,000 students every year.

The centre focuses mainly on training people for the hotel and hospitality industries. It works with some local schools, like the Institute for Tourism Studies, where it regularly holds short workshops directed towards people already working in the industry. But it also partners with casinos, targeting in-house training.

Mr Lo says the hospitality industry is in “an early stage of development” in Macau. One of the reasons the city lags behind is the lack of qualifications. He quotes a study conducted by the government in 2008, which showed more than half of the labour force did not graduate from high school.

“You can’t deliver a sophisticated product or satisfy a sophisticated client if the workers are the opposite of that,” he says, adding that this is why training is so important in Macau and necessary for both local and non-local workers.

“The quality of our human resources does not match our needs.”

“Macau lacks human resources,” says Diamantina Coimbra, the head of the Institute for Tourism Studies’ Professional and Continuing Education School. She says the government is doing a lot in terms of subsidising courses, and the new MOP5,000 subsidy is another positive step.

From her experience, there’s a big lack of frontline workers, like receptionists, waiters, cooks or maids. But there’s also strong demand for directors and other management level staff, an area in which her school will start working soon: in July, it will launch a supervisory course.

“There are many companies that want to promote local workers. They feel that, although they may be good workers, managing people is another skill that needs to be learned,” Ms Coimbra says.

Last year, the Institute for Tourism Studies gave professional training to around 20,000 students. The institute offers different types of professional training, from languages to culinary courses, including event management and wine tasting.

It offers both certificate and diploma programs, all recognised in Macau and several of them also internationally.

Some students say they attend these courses to learn more, others to get promoted or to find new opportunities in the service industries. There are also those who admit to being there because their employer told them to go and paid for it.

Changing attitudes

A different type of training provided by the Institute for Tourism Studies is pre-service vocational training, which targets secondary school students. The goal is to explain to them what the service industry is really like and demystify some of the pre-conceived ideas they may have.

“[In the past,] there was a wave of some students who even left school to work in the casinos, they believed all would be roses,” Ms Coimbra says.

H. W. Cheng, director of the University of Macau’s Centre for Continuing Education, also believes the MOP5,000 could help promote training.

His centre has been “established to offer whatever courses the community needs,” without having any kind of restriction as to subject areas. Currently, it offers short courses in design, public administration, and professional English language, among others. In 2009, 3,000 students enrolled, both in short courses and diplomas.

Students that attend the courses are usually already working and the majority are aged from 30 to 40 years old.

In the future, the centre is hoping to introduce creative studies, convention management and show business courses, to cope with the overhead plan for Macau.

Employee’s high turnover rates and language levels are two main problems detected by Mr Cheng in today’s local labour market. He believes Macau needs “more people who are willing to devote their time to a single enterprise,” while at the same time the territory is “lacking people who are good at Chinese and English”.

Knowledge transfer

A well-known training facility in Macau is the Macau Productivity and Technology Transfer Centre (CPTTM), which offers hundreds of different courses and has trained thousands of professionals since 1996. It is a non-profit organisation and results from a partnership between the government and the private sector.

The centre offers both public and corporate training courses in four areas: information technology and systems, business language and presentation, apparel technology and industrial support and quality management and enterprise development.

Senior manager Helena Lei explains the centre targets people who are already employed, but are looking for a way to upgrade their skills.

As she points out, Macau has changed rapidly. The local garment sector, for instance, has evolved into a fashion industry, and, so, the training courses in this field have also changed.

The two largest groups of courses are IT and management. However in 2009, creative design saw a significant growth rate. Language courses, especially English, are also popular among students.

It’s difficult, though, to find instructors, Ms Lei says. At her centre, most are locals with work experience in the international environment. But the institution still needs to recruit instructors from outside, especially from Hong Kong and the mainland.

For Ms Lei, there will always be a demand for human resources in Macau. There are opportunities, but the problem is whether people have the skills to grab them.

“Macau people will really need to embrace the concept of life-long learning”, Ms Lei says. Locals should create their own career planning, she stresses.