The sluggish approval process for local companies seeking to hire non-resident workers and the waning interest among migrant employees to work in Macau are two pressing issues that the city must address. Failure to do so could result in a labour shortage that could potentially cripple the operations of hotels and other tourism-related sectors as the local economy tries to recovery, industry representatives warn
Due to the recent recovery of tourism following the end of Covid-related travel restrictions, the local hospitality industry is finally breathing a sigh of relief after three years of hardship. But this abrupt recovery has translated into another problem for them – a sharp labour shortage.
In recent weeks, a representative of the local hospitality industry-related group has come out to voice concerns on the issue. Billy Song Wai Kit, president of the Macau Responsible Gaming Association, says some hotels in mega resorts in the city have only been running at about 80 per cent of their room capacity or lower since the start of the year due to a lack of staff in frontline positions.
“Many hotels have cut their headcounts and relocated their staff members to other aspects of the operation in the past three years because of the dwindling visitation volume,” Mr. Song says. “But the years-long restrictions have suddenly ended, and hotels have been unprepared for this rapid surge of visitation volume in terms of manpower.”
In the wake of the lifting of Covid-related restrictions in the region since the end of last year, the number of visitors to Macau skyrocketed by over 160 per cent year-on-year to 4.95 million in the first quarter of 2023. The rise in the tally of overnight visitors was even higher at 287.6 per cent, when there were 2.64 million overnight tourists in the January-March period, according to official data. In spite of the improvement, the figures still represented about 47.7 per cent and 55.7 per cent of the pre-Covid levels respectively.
“Local hotels have made great efforts in recent months to recruit manpower again, but locals are not very interested in frontline positions while it takes time for the paperwork of hiring non-resident staff,” Mr. Song reasons, expecting the labour shortage in the hotel segment will only be eased before the summer holiday.
In a bid to ensure local employment during the pandemic, the size of non-resident workers in Macau has severely shrunk in the past three years. According to the Labour Affairs Bureau (DSAL), the number of migrant workers in Macau plunged by more than 21 per cent, or over 41,600 workers, in the 2020-2022 period; among the various sectors, the tally of migrant workers in the hotel and dining segments suffered the biggest decline of more than 32 per cent, or nearly 17,760 workers, in the same time period. Overall, there were 152,577 non-resident workers in Macau by February 2023, further down from 154,912 by end-2022, while the tally in the hotel and dining segment went up by less than 300 to 37,260 workers over the same time period, the latest DSAL data said.
Corporate and real estate consultancy CBRE Equity Research has lately said the labour shortage in Macau, mainly caused by the loss of non-resident workers, has impeded the recovery of the tourism and gaming industries in Macau. As the tourism and gaming industries in the Southeast Asia market are also on the path to recovery, there has been a surge in demand for hospitality workers in the region, resulting in a higher cost for resorts in the region to vie for workers, the consultancy said in a recent report.
Andy Wu Keng Kuong, chairman of the Travel Industry Council of Macau, acknowledges the manpower shortage in the local hospitality segment, a situation that has improved, though. “At the start of post-pandemic times, it is true that many local hotels were operated with a room capacity of 80 per cent or less,” he indicates.
Nonetheless, as more non-local staffers have been returning to the city in recent weeks, the labour shortage in the segment has eased. “Currently, only about less than 10 per cent of hotel rooms in Macau are unavailable due to the labour issue,” he adds. “The situation has been improving… and it should be noted that the hotel room supply here totals about 40,000 to serve visitors.”
Latest government figures show the number of available guest rooms in Macau totalled 39,000 by end-February 2023, rising from 37,000 at the end of last year. Meanwhile, the number of available accommodation establishments also jumped from 123 to 126 over the same time period. The average hotel occupancy rate in Macau went up by 27.5 percentage points year-on-year to 76.1 per cent in February 2023, according to the official data.
Pool of candidates
“We have been occupied with loads of tasks since the lifting of Covid-related restrictions,” says a human resources executive at a local integrated resort who speaks on the condition of anonymity due to the policy of his employer. To find workers for various frontline positions across the property, not only limited to the hotel segment, his company has employed a wide range of measures, including reaching out to former staffers, especially those who have been let go in the past three years. “The advantages of recruiting former staffers are that they are familiar with the job nature and the company culture, and they can be immediately deployed without much training after the relevant paperwork has been approved,” the executive says.
In recent weeks, his company has also collaborated with foreign recruitment agencies for hiring in Southeast Asian markets like the Philippines and has hosted job fairs in nearby Guangdong province, the human resources executive says. “The problem now is not about the lack of candidates but the time it takes to choose the appropriate ones from a pool of candidates, get the paperwork and other administrative procedures done, and train them,” the executive adds, who also notes that the labour shortage in the hospitality segment has been “less acute” in recent times compared with earlier this year. “There are still some positions to be filled, but I won’t say it is severely crippling our operation now,” he adds.
Slower than in the past
According to the estimates of the president of the Macau Overseas Worker Employment Agency Association, Ao Ieong Kuong Kao, it now takes about three to four months on average for the local authorities to approve an application for hiring non-resident employees. “The current approval process has been slower than in the past. It’s likely due to the fact that many local companies from different sectors have applied for the quota in recent months, and the authorities might somehow be overwhelmed with a large number of applications in a short time period,” he says. “Despite the recent improvement, the local unemployment rate now is still higher than the pre-pandemic level, and the government is cautious in approving non-local labour quotas for companies.”
The overall unemployment rate in Macau stood at 3.3 per cent in the three months ended February 2023, down from as high as 4.3 per cent during the pandemic, while the jobless rate for residents retreated from the peak of 5.5 per cent to 4.1 per cent by February 2023, the latest official data said.
“The process of rehiring workers who have worked in Macau before is much faster than employing those who are new to the city,” Mr. Ao Ieong adds. Not only the Macau authorities, but the expert also notes that some Southeast Asian nations like the Philippines have recently strengthened supervision for their nationals to work abroad, thus resulting in a longer approval period for Macau companies to hire Southeast Asian employees.
Expedite the process
He believes the Macau authorities should expedite the approval process for non-resident workers to meet the needs of local companies, from large corporations to small-and-medium-sized enterprises (SMEs), as well as establish a better mechanism for enterprises to track their application progress.
The city’s prominent business group, the Macau Chamber of Commerce, also issued a statement in April, urging the authorities to speed up the process of approving non-local workers. “Macau is a service-oriented economy, and a structural unemployment problem exists in the city that affects the speedy recovery of the economy,” the group said in a statement. “Besides ensuring local employment, the government should also help the city replenish non-local workers in a timely manner to support the recovery of local tourism.”
The business chamber refers to a problem highlighted by the administration in recent times – there are currently many vacant positions in the job market in the areas of hotels, dining, retail, and construction, but unemployed residents are not interested in these jobs as they previously worked in the gaming industry and others.
“To alleviate the manpower shortage in various industries in the wake of the recovery of the local economy, the Labour Affairs Bureau will provide appropriate support to SMEs in their applications for non-resident workers under the conditions of safeguarding local employment,” the DSAL said in a statement.
“Concerning applications from tourism-related industries, such as hotels, catering, retail, security, and cleaning services, as well as the reapplications from enterprises that have voluntarily voided the approved non-resident labour quotas during the pandemic, the Labour Affairs Bureau will expedite the process of reviewing such applications and consider approving the quotas in tandem with the actual conditions [of the market],” the bureau said in the recent reply to an inquiry of legislators. The government has also pledged that the approval time period for the reapplications of non-local labour quota from SMEs would only take up to five working days.
Although the administration has pledged to expedite the process, the path to hiring non-local workers is still not a smooth ride. Fong Kin Fu, president of the Federal General Commercial Association of Macau Small and Medium Enterprises, says it has not been easy for local SMEs to hire non-resident workers, particularly those from Mainland China that account for about two-thirds of the tally of migrant employees in Macau.
“Given the robust development in Mainland China, particularly the first-tier and second-tier cities, the salary levels between Macau and those cities have been narrowed,” Mr. Fong says. “Together with other factors like the exchange rate, the appeal of working in Macau has been less attractive for them [mainland workers].”
The Covid-19 pandemic in the past three years has also changed the mindset of some mainland workers, who have been less willing to work beyond their hometown, he observes. In view of the latest situation, he adds that local SMEs are monitoring the development and would make adjustments if needed, such as further improving the salary packages. “We are also worried that the quality of our service will drop significantly due to the lack of manpower,” he concludes.