CENTRE OF STUDIES FOR QUANTITY SURVEYING FACULTY OF

ARCHITECTURE, PLANNING AND SURVEYING UNIVERSITI

TEKNOLOGI MARA

THE IMPACT OF LABOUR SHORTAGE IN MALAYSIA

CONSTRUCTION INDUSTRY

DANIAL ILYASA JUAN BIN MOHD JOHAN JUAN

(2019461688)

Centre of Studies for Quantity Surveying,

Faculty of Architecture, Planning & Surveying

October 2019
The Impact Of Labour Shortage On Contractor In The Malaysia Construction

Keywords – Labour Shortage, Contractor G7, Construction

Abstract

Construction skilled shortage workers have become worldwide issue. It also

becomes the greatest challenge facing Malaysian construction industry. Moreover,
participation by local workforce is not very encouraging and there’s understood that skilled
workers produced from vocational training were not meeting industry’s needs. Some of them
left construction sector even after undergo training from construction training institutions.
Malaysian construction has problems in the ability to get the source of labor as well as
retained skill people and has to depend on foreign worker to respond to the high demand of
skilled workers due to rapid development in Malaysia and poor participation from local
people. This paper explores on construction skilled shortage issue in Malaysia and how
serious it is. Discussion of the paper will be on initiatives taken to overcome this issue by
introduced technical and vocational skills training and education in Malaysia such as
National Occupational Skills Standards (NOSS) and National Dual Training System (NDTS).
Those initiatives will be discussed and compared. Moreover, success factor of dual system
will also be discussed which are based from other country that successfully implement dual
system. Last but not least, reasons of local reluctant to join or work in construction sector will
be explained. Some strategy to attract local’s participant to join construction industry will be
discussed
Introduction

Construction field is getting more essential around the world. Problem of labour
shortage has bringing lots of consequences and economy of Malaysia will being the first
signs of significant negative impacts of labour shortage. The major impacts such as
construction costs increase, quality of work and the speed of construction will be slow down.
In this era of welfare reform, we have to pay more efforts in attracting people into the
construction so that can reduce their reliance on public support and thus lighten the burden
of the state.

The construction industry needs a continuous supply of foreign workers for

infrastructure and building projects in order for it to sustain growth of eight to 10 per cent this
year. The construction industry grew 7.9 per cent in the first quarter of the year and 8.8 per
cent in the second quarter. Malaysia’s construction sector is still labour intensive, with an
estimated one million construction workers needed every year, the majority of them
foreigners. (Master Builders Association Malaysia (MBAM) president Foo Chek Lee).
Problem Statement

It is well known that construction sector is one of the important sectors since the
construction always had a certain position in Malaysia. Construction sector has generated
large contribution and also created certain amounts of financial sources to Malaysia.
However, the problem of labour shortage makes the whole construction development has
calm down and the output of the construction take it reducing. The problem has become
more serious since there are no any investments or financial assistances get from the
government and also the investors. At that time, they have no one can withstand for the high
risk due to the insufficient labour will incurred a large amount of extra costs. In this case, the
capability in earning profit in construction industry is become lower.

The domestic construction industry is facing an acute shortage of labour,( says

Master Builders Association of Malaysia (MBAM) president Foo Chek Lee.)
He said the shortage is particularly felt by small contractors, (Nanyang Siang Pau) He
disclosed that the industry needs 600,000 to 800,000 more workers in order to meet the
estimated need of 1.2 million workers in the industry.

although industry players are bringing in Bangladeshi workers through Construction

Labour Exchange Centre Bhd despite grouses by some that these workers' performance is
below expectations, the numbers are far too small to meet the huge demand,( says Master
Builders Association of Malaysia (MBAM) president Foo Chek Lee.)
the economy saw a labour productivity growth of 3.3% last year but believes that it
will be challenging for labour productivity to grow in the years to come because of the lack of
skilled workers.( Malaysian Employers Federation executive director Datuk Shamsuddin
Bardan)

He fears that without more skilled workers, the economy will find it more difficult to
move up the value chain and will not be able to attract large capital investments .( Malaysian
Employers Federation executive director Datuk Shamsuddin Bardan)
It adds that the talent base of the workforce lags behind the standards of high-income
nations. “The country suffers from a shortage of skilled workers, weak productivity growth
stemming from a lack of creativity and innovation in the workforce, and an over-reliance on
unskilled and low-wage migrant workers,”
Aim

To find out the impact of labour shortage on contractor G7 in Construction Malaysia and how
to overcome the problem of labour shortage in Malaysia.

Objective of study

1. To identify the awareness of government on the labour shortage problem.

2. To analyse the effect of labour shortage in Malaysia construction industry.

3. To recommend the way to overcome the labour shortage riddle.

Research Question

1) How does the construction industry combat this issue of a labour shortage?

2) What is the problem faced by the contractor if there is a labour shortage?

3) What is the level of awareness by the government?

Scope of Study

In order to achieve the results of this research, the scope of study will be focusing on
the awareness, the problem faced by the contractor and how the government overcome the
labor shortage riddle.

A survey will be formulated for the respondents of this research who consists of the
contractor at Klang valley. The survey would be able to show the level of awareness, level of
knowledge and types of action taken by the respondents.

Research Methodology

3.1 Introduction
This chapter include and explain the methods used and the detail for this
dissertation. For this dissertation, method that being used is interview. The
researcher used the method interview to order to achieve the objective of this
dissertation. After define the objective and scope of the study for the title, the
researcher will collect the data and information by two sources which are primary
sources and secondary sources to achieve the objective of this dissertation which
are:

1) How does the construction industry combat this issue of a labour shortage?

2) What is the problem faced by the contractor if there is a labour shortage?

3) What is the level of awareness by the government?

 3.2 Research strategies
In order to succeed this study, a methodology was developed and used. The main objective
is carrying out this study is to identify the awareness of government on the labour shortage
problem in Klang valley.. Based on the information above, this study will further describe the
responsibilities of the related agencies which are the government agencies. The
methodology on means to solve the defined problem was developed, prepared and properly
planned to ensure the above objectives are achieved In order to make possible the
methodology, relevant data were collected from the related parties which is the contractor
G7. All necessary reference related to the parties involve and environmental problems
including books, journals, articles as well as review of studies has been made. The
sequence of this study begins with literature review, questionnaires with the relevant parties,
data analysis and presentation of finding. By using systematic sampling method, it is a
method where the elements are chosen from a target population by selecting a random
starting point and selecting other members after a fixed ‘sampling interval’. Sampling interval
is calculated by dividing the entire population size by the desired sample size.

3.3 Data Collection

Data is a fact can be analyzed or used in an effort to gain knowledge make decision.
Data collection technique allow the researcher to collect information and data
systematically. Selection of data collection technique depends on the nature of the
investigation and the type of data and information required (Naom, 2007). According
to the Fraenkel & Wallen, (2006) there are two approaches for data collection which
are primary data collection and secondary data collection.
3.3.1 Primary Data Collection
According to Naoum (2007). primary data known as fieldwork research" that
consist of survey, case study, and problem-solving approach. The survey
approach has been done by gather data from a relatively large number of
respondent. Primary data- Questionnaire Information will be gathered from the
questionnaire survey conducted to the industrial operators. All the respondents
need to answer the question survey from that has been prepared consist of
several sections. Afterward, the data information being analyses. The data from
the questionnaire are collected from Contractor class G7.

3.3.2 Secondary Data Collection

 The research method adopted for secondary data collection based on a literature review
of “sustainable construction” and “labour shortage” in the construction industry. This paper
performed a content analysis approach that involves cross-referencing various sources of
information in order to identify the challenge of labour shortage in construction industry. The
literature analysis revealed some factors that influence the availability of labours in the
construction industry.

3.4 Data Analysis

Analysis method used for this research is descriptive statistics which under the
quantitive data analysis descriptive statistics are brief descriptive coefficients that summarize
a given data set, which can be either a representation of the entire or a sample of a
population. Descriptive statistics are broken down into measures of central tendency and
measures of variability (spread). Measures of central tendency include the mean, median,
and mode, while measures of variability include the standard deviation, variance, the
minimum and maximum variables, and the kurtosis and skewness. Hence, the data
collection from questionnaire will be conducted by using Google Form and Microsoft Excel.
These kind of software will easily help to interpret data and information from respondents
which it provides chart and table to list the data.Hence, the final result will be used for
conclusion and recommendation through these methods and analysis.

To find out the impact of labour shortage on

contractor G7 in Construction Malaysia
 Objectives

1) How does the construction industry combat this issue of a

labour shortage?

2) What is the problem faced by the contractor if there is a

labour shortage?

3) What is the level of awareness by the government?

Research Methodology

Primary Data Secondary Data

Questionnaire Survey  Journals

Distributed to available  Books
Contractors in Klang  Internet
valley.  Research papers

Analyse Data

Establish Findings

Conclusion and Recommendations

Research Process
References
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