Labour skill to get a boost under AEC

However, with the open trade environment, manufacturers of labour-intensive products such as garments and textiles will relocate their facilities to such countries as Vietnam, Cambodia, and China that will be more cost-competitive, as they do not need highly skilled labour for the jobs.
Simon Matthews, Thailand country manager for ManpowerGroup, said he did not believe that labour would move freely from one country to another under the AEC. The AEC is different from the European Union as Asean members have different wage structures and market mechanisms.
“The current situation has changed. Thailand used to be strong in the textile industry. However, when the domestic wage increases, this industry will move on to grow in China and Vietnam. Consequently, the Thai labour market has changed significantly to focus on high-skills manufacturing sectors such as automobiles and electronics,” Matthews said.
 “As people nowadays pay more attention to the environment, more hybrid cars are being produced, causing skilled labour to move into this industry. Thailand will be recognised as the Detroit of East Asia,” he added.
Matthews said there were many challenges in the wake of the government’s policy to increase the minimum wage in certain provinces to Bt300, effective from April 1. Meanwhile, the minimum wage in the rest of the provinces will rise by 40 per cent.
“The first challenge is that business entrepreneurs have not been doing anything and then the new minimum wage structure will affect their bottom-line performance and profitability. The second challenge is that if they pass on the cost to consumers, it will push up the prices of products and services,” he said.
“From the social standpoint, the new minimum-wage structure will have an impact on the country’s inflation,” he added.
Matthews said that to cope with the wage hike, local manufacturers needed to improve their efficiency and productivity within the organisation. They have to do more with skills.
“At present, the wages in North America, Europe and Japan are quite high. Several companies plan to move their production base to other countries. Thus labour also migrates. Although the technology is much improved, Thailand still encounters the problem of lacking skilled labour and language skills, especially for the industrial sector focusing on the particular skills such as in the Eastern Seaboard,” he said.
Matthews said the main focus of ManpowerGroup was to search for more labour in fields where there is a shortage. Meanwhile, it plans to establish a manpower search and selection centre in Cambodia as well.
Suthida Kanjanakantikul, marketing manager of ManpowerGroup, said the company’s survey of 1,080 job applicants and 200 companies using its service found the following:
The most-wanted jobs for local labour were: marketing and public relations (21 per cent); administration and human resource (20 per cent); advertising and media (16 per cent); tourism and hotel (15 per cent); and financial and banking (14 per cent).