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Lao businesses urged to attract domestic workers with better social welfare
Publication Date : 27-08-2013
Providing good salaries, welfare benefits and social insurance could all be ways to resolve the chronic labour shortage that challenges both local and foreign investors in Laos.
“We have to understand that the job vacancy situation is not under employer control, so employees have the opportunity to select their job, employers, workplace, salary and welfare,” Director General of the Ministry of Labour and Social Welfare's Skill Development and Employment Department, Phouvanh Chanthavong, said.
Speaking at the 8th Lao Business Forum in Vientiane last week, Phouvanh said employee welfare was another issue needing close attention, “especially the situation regarding social insurance. There are many companies that have not registered to participate in the scheme.
To attract employees in the long term, we have to provide them with some form of security. If not, they won't work for us.”
To guarantee their social welfare, it is necessary to ensure that their salary and welfare benefits cover any period when they or members of their family are ill, and that they have enough money to pay medical bills.
“I have noticed that many private businesses have not done well on this particular point,” Phouvanh said.
However, he added, it is true that a new regulation has set the minimum wage at 626,000 kip per month and many business operators are paying much more than that.
“In the current situation, competition between employers has given employees a wide range of choices,” he said. “Once they have the opportunity to choose, they are likely to go for whoever pays the most.”
Phouvanh said he had asked some people why they did not work for the private sector and their answer was that by working at home or in their village they could earn a similar income.
So they choose this option because it involves little expenditure, while if they worked in the private sector their living costs would be much higher.
“Some people also say that workers' dormitories are inadequate and are often crowded and dirty. Others say medical services aren't provided when they're ill,” he added.
Also speaking at the forum, a senior advisor to the Lao National Chamber of Commerce and Industry, Onesy Boudsivongsakd, said both local and foreign investors operating in Laos have been encountering problems stemming from the chronic labour shortage.
A labour pool of 187,750 people is currently available in the business sector according to a forum handout, but the annual requirement is for a further 31,130 workers.
These 31,130 people are required to work in the garment industry, processing industry, tourism, a steel rod production group, a furniture production association, construction group, KP industry group, and the Nikon and Essiloz companies in the Savannakhet economic zone.
This does not include the labourers required by two sugar companies in Savannakhet province and workers required to harvest latex on rubber tree plantations.
Onesy said that in the midst of the labour shortage there is a large exodus of over 100,000 migrant workers seeking employment in other countries.
In Vientiane, the labour shortage sometimes causes conflict between companies. This has led to poor discipline, inefficiency in the workplace and high labour costs.
A shortage of labour and the rapid turnover of workers is a major challenge facing existing investors and those who are considering investing in Laos.