Image credit: SME horizon
PETALING JAYA: The growth of small and medium enterprises (SME) is being impeded by shortage of talent and stiff competition for such people from multinational corporations (MNC), according to Small and Medium Enterprises Association (Samenta) national secretary Yeoh Seng Hooi (pic).
“The shortage of talent is a serious issue and the matter has been aggravated as MNC fish in the same pool as SME, crowding them out by offering higher remuneration packages. What are the solutions to this predicament faced by SME?” he questioned.
Yeoh told SunBiz that the association, in its latest proposal to the government, said there should be more decentralisation in policies and implementation, for a start. The federal government should work closely with the state governments. More policy and decision-making on economic development should be delegated to the state governments.
“The state governments understand the needs of the SME in their respective states better instead of a one-size-fits-all policy. Grants and allocations should be provided to targeted state agencies and institutions that are tasked with specific roles,” he said, adding that financial support should be given to the Skills Development Centre (SDC) at state level – such as Penang Skills Development Centre – to provide suitable workshops and training to reskill and upskill SME workers.
Yeoh said that for training programmes targeted at SME, the SDC can claim for grants and reimbursements from the federal government. Such a model is implemented in Japan where there are nine regional and dedicated SME training institutes nationwide.
In addition, he said, public sector financial support and grants should be targeted at improving the skillsets of SME workers. Furthermore, boards of directors should have more representation from SME-focused trade associations such as Samenta instead of being dominated by MNC representatives.
Commenting on public funds that are utilised to train workers for MNC, Yeoh said attention should also be diverted towards talent requirements of SME.
He said introducing automation and pursuing IR 4.0 (Industrial Revolution 4.0) initiatives will not be successful if SME do not have the talent to embrace and execute the systems.
“As an immediate reprieve, SME need some fiscal support to pay for the more expensive talent as it will have to compete with MNC for talent.
“Double deduction tax allowance should be given to SME for salaries of workers above RM5,000. This policy would incentivise the SME to be more willing to pay a higher remuneration to the skilled workforce and managers so that the SME can move up the value chain. The financial burden on SME will be lighter if they can set off the higher remuneration against taxable income,” he remarked.
On a short-term basis, Yeoh suggested that SME be given more work permits to hire experienced technical staff from overseas. This could be a measure for, say, five years while the proposed training programmes at SDC and polytechnics are accentuated.
Source: https://www.thesundaily.my/business/samenta-proposes-ways-to-help-sme-address-shortage-of-talent-FF10402430