In this month’s issue, Macau Business takes an extensive look at the city’s human resources. This is especially important at a time when Macau has reached full employment, with unemployment at its lowest level since the handover, according to official data.

A lack of workers hurts small and medium enterprises (SMEs), which have less bargaining power than casinos when attracting new employees. After falling back during the global financial crisis, the gaming industry’s workforce keeps on expanding and its wages are increasing.

Facing great odds, some SMEs are questioning their own survival. Many are calling for more money and other support from the government, all the while showing no inclination to adapt to the new economic environment.

The most obvious solution to this problem would be for the government to relax its restrictive policy on importing labour. Although that is certainly needed, there are only so many people that Macau can cope with (think of the thousands of tourists flocking into town every day) without a sharp drop in the quality of life.

A plausible answer to Macau’s human resources problem could be increasing labour productivity.

Little, if any, data exists in Macau about productivity, least of all about productivity in SMEs. Owing to the domination of the economy by the casinos, any overall calculation is always skewed by the gaming industry. The gaming industry is the reason that last year, the Korea Productivity Centre ranked the Macau economy as the 24th most productive in the world.

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A quick tour of the city shows SMEs are not making full use of their manpower for at least a considerable portion of the day despite the fact, bizarrely, that overtime is common. Shops with five employees but with no customers are a common sight.

Business owners may argue that additional staff are needed for peak periods. It is a good point but the problem could easily be solved if the government got round to making rules for part-time employment and allowed imported labour and students from abroad to work part-time.

In other international tourist destinations, employers rely heavily on part-time and seasonal employees, whether local or imported, during peak periods and to ensure quality of service. This not only makes more rational use of the available labour pool, but also makes SMEs more profitable.

Curiously, casinos seem to be leading the efforts to improve productivity, by training and closely monitoring employees. The government cap on the number of gaming tables is an incentive, encouraging gaming operators to increase revenue by increasing the amount of gambling done at each table.

Training alone will not solve Macau’s productivity problem because several training courses already on offer lack quality. A certification system of some kind is urgently needed.

Adapt or perish

Furthermore, more skilled employees need work that makes use of their higher skill levels. It is pointless having restaurant employees learning how to use sales software if the restaurant uses paper and pencil.

This brings us to another issue.

To improve their productivity, SMEs must say goodbye to their technophobia. It makes no sense that more than half of local businesses make no use whatsoever of technology in their day-to-day operations, as recent official figures indicate.

Any drive for greater productivity will mean that, in the early stages, some low-skilled workers will be left behind. Social policies can partially ease their woes.

It will be harder to change the mindset of employees and employers. In a land ruled by monopolies and oligopolies, competition and, therefore, productivity has never been a big issue. And the paternalistic approach consistently followed by the government has done very little to change the status quo.

A drive for greater productivity could easily bring about the most significant transformation of Macau’s economy since gaming liberalisation. The question is whether we are ready to transform ourselves first.