In an economy that is experiencing a labor shortage due to the rapid growth and labor import restriction, the existing workforce tends to be in a position where they can be selective in their choices for employment because there is an abundance of job vacancies. To compete for labor in these situations, companies strive to focus on job attractiveness by increasing salary in order to retain and attract more people. Several large hotel companies announced increases in salaries early in 2011.
For instance, there was a 5% salary increase for non-management employees at MGM Macau, a 6% salary increase for non-management employees at Wynn Macau, a 5 % salary increase for entire employee at SJM, and a salary increase of 4. 5 % for all fulltime employees at Sands China. This is especially true for the job of casino dealer. Since the Macau SAR Government requires casino operators to hire only local residences as dealers, companies have to offer more attractive compensation in order to attract locals to fill in the vacancies in casinos, which eventually push the salaries even higher compared with other non-gaming related jobs.
Staff turnover produces many ‘costs’, including those associated with recruitment, any enterprise-specific training and the need for new employees to familiarise themselves with their new occupation and/or workplace. These costs are particularly hard hitting for small to medium enterprises, which account for the majority of businesses in the hospitality industry. While low skilled jobs traditionally have had the highest rates of staff turnover, reflecting individuals moving along the career path from lower skilled to higher skilled jobs, in the hospitality industry the change in occupation is often unrelated to the area of work.
The industry is often used to provide a casual income for students, who then go on to other careers on completion of their study and for carers in family situations that evolve. The skills and labour shortage is compounded by the employers’ difficulty in targeting the people who are best suited to the industry and also see the industry as a long-term career option. A key element of this is the need to make the industry much more professional, and be perceived more positively. Recommendations With respect to the manpower issue in Macau, the Macau SAR Government has airly strict measures on imported labor, in which we can see that the government wants to protect the highest interest of local workers. Unfortunately, as mentioned previously, the government has regulated that the hiring of workers by stating that only local residents can work in the position of dealer, which is actually the lowest position in the casino operation hierarchy. This move doesn’t create any benefit for local workers’ long-term development. In addition, it greatly restricts the flexibility of human resources allocation and increases the dealer pay abnormally high compared with other entry level jobs.
As a result, many local workers go to join dealer jobs without proper consideration of an education, as well as future career development. Although the salary of a dealer is higher compared with other low level jobs like F&B server or room attendant, it limits the future advancement potential of local workers. Therefore, it is suggested that the Macau SAR Government try to proportionally open the position of dealer for foreign labor to dilute the abnormal situation in this sector and to balance the participation of locals in other operational areas such as F&B, housekeeping and front office to facilitate a healthy human resources development.
It is also suggested to clarify the foreign labor regulations, and the ratio of imported labor, to increase the government transparency. As mentioned previously, approximately one-fourth of the total labor force in Macau is imported labor, which is a seemingly high proportion. Due to the high labor demand, the government should review and revise the current quota for imported labor with consideration being given to future development projects as well as the labor shortage issue.
In addition, through introducing more skilled or technical labor from other countries, it can help to bring in skills as well as to loosen up the labor-intensive situation. Conclusion The shortage of labor is undoubtedly the number one challenge to the hotel industry in Macau. This has created various problems such as low service quality and high turnover rate. The problem has created a vicious spiral that has started to snowball. More and more overtime is required from laborers and the service standard is continuing to drop.
This dropping of the service levels may have significant impacts on the reputation of Macau’s hotel industry. If no effective solution is implemented by both the hotel industry and government, this could be a perfect storm which might seriously obstruct the industry development in Macau. Nevertheless, if the Macau SAR Government, as well as the hotel companies were willing to confront the root of the labor shortage problem with proper insight and long-term planning, it could stop the situation from getting worse and help to maintain a healthy labor market.