Call for improved labour efficiency

August 29, 20169:59 am308 views

The Board of Trade has urged the government to boost labour efficiency and draw more skilled workers into the Kingdom.

Board of Trade vice chairman Poj Aramwattananon said the country needed to re-engineer its labour efficiency in accordance with the “Thailand 4.0” policy, which will need more skilled workers and high-efficiency employees.

“Thailand is facing a labour shortage as well as a lack of skilled workers. The government should focus on increasing labour efficiency and drawing more [manpower from] underemployed or other groups of people who could [contribute to] industrial growth under the Thailand 4.0 policy,” Poj said.

According to the latest “Global Competitiveness Report” published by the World Economic Forum, labour efficiency in Thailand is quite low compared with other countries, particularly in Asean. Thailand ranks 67th out of 140 surveyed countries, and sixth among the 10 Asean member states.

For instance, in the agricultural sector, Thai labourers earn US$6,346 per person a year, one-fifth as much as Malaysians, while Australians earn 13 times as much. Thus the Thai government needs to increase labour productivity in many ways. Thai labour productivity is behind that of Malaysia, Singapore, Cambodia, Laos and Vietnam, he said.

The measures required to increase labour productivity are reducing work processes, adopting more technology and machinery in replace of human workers, and developing logistics and supply chains, Poj said.

Moreover, the government has been urged to encourage people not fully employed in Thailand to work in the industrial sector. These people can be found in various groups, including 1.4 million minority people, 153,000 Thais who work overseas, 10.04 million retirees, 176,000 underemployed people such as motorbike-taxi drivers, and 11.2 million who work in the agricultural sector.

A survey by the University of the Thai Chamber of Commerce of 600 business respondents found that more Thai enterprises were employing foreign workers, from 10 per cent of their total workforce five years ago to 15 per cent now.

Thanavath Phonvichai, director of the UTCC’s Economic and Business Forecasting Centre, said that with Thailand becoming an ageing society and welcoming fewer newborns, the country should make it easier for enterprises to employ foreign workers.

About 3 million foreign workers are registered in the Kingdom, but the Chamber estimates there are another 2 million who are unregistered.

Small and medium-sized enterprises demonstrated lower efficiency and competitiveness in the second quarter of the year compared with the first three months, but the UTCC expects SMEs efficiency will recover in the second half along with a recovering economy.

SMEs with low efficiency and competitiveness are mainly in production sectors, while those in the service and tourism sectors do better.

Based on a survey of 1,400 SMEs, the “SME Health Index” was down from 42.4 points in the first quarter to 42 points in the second, while the “SME Competency Index” dropped from 51.1 points to 50.9 points during the same period. The baseline is 50.

Thanavath said SMEs showed lower efficiency and competitiveness in the first half of the year due to the sluggish economy, along with lower consumption. However, with clearer signs of an economic recovery and rising crop prices to increase consumer spending power, SMEs will become more competitive in the remaining months, he said.

To promote SMEs’ development, Thanavath suggested that the government provide measures such as soft loans and a restructured tax system.

The survey found that SMEs’ efficiency and competitiveness had been affected by lower sales and profits, low financial liquidity, and higher debt burdens.

Most SMEs said their sales would grow by only 0-5 per cent this year.

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