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Hiring crisis threatens Macau

As a rapidly growing gaming market, Macau is desperate for talented and experienced workers. The city had 28 million visitors, and enjoyed 21 per cent economic growth, last year – and is close to full employment.

With a population of more than 560,000, Macau’s unemployment rate for February to April 2012 was just 2 per cent, according to the city’s Statistics and Census Service.

“Right now, the number of workers available is zero,” says Queenie Zhu, director at MyJobs Macau, a human resources consultancy. “The unemployment rate represents a group of people who either don’t need a job or are unemployable.”

Casino operators such as Las Vegas Sands, Wynn Resorts, Galaxy Entertainment, MGM, Melco Crown Entertainment and SJM are competing for workers as they seek to expand their gaming businesses. But rules requiring firms to hire from Macau’s population are driving up wages and jeopardising work quality.

Zhu says that at least four new casinos are in the pipeline in the next two to three years. With a labour force of only 345,000, it is uncertain where they will find staff.

“Locally, the size of the labour force has not increased. When another casino project opens, it will need to fill up a few thousand positions. That will stretch the pool of labour, and we will need to hire from overseas,” Zhu says.

However, overseas hiring requires relocation and that involves a lot of documentation and administrative preparation. According to Zhu, employers are sometimes reluctant to make such an investment as they cannot guarantee candidates are suitable until they join.

“The mainland market has also become a major competitor, with more than 1,000 hotels opening every year,” Zhu adds. On the other hand, businesses in general have evolved from the building to the maintaining stage. As such, staff requirements have changed.

Wynn Macau was the first Las Vegas-style integrated resort to start the mass-hiring model. “Now, five years later, some of the local staff have been promoted to managerial level. So somehow, they have become a pool of higher-level employees,” Zhu says.

The extremely high demand for staff has spoiled some local employees, as they have many job opportunities offering higher pay and positions. “They become very selective and, in return, employers might suffer from lower work quality as power shifts to the employees,” says Zhu.

One upcoming property on Macau’s Cotai Strip is Galaxy Macau Phase 2, scheduled for completion in mid-2015.

“We are still working through what the number [of staff] might be for that but that is certainly a massive extension of our existing business at Galaxy Macau,” says Trevor Martin, senior vice-president of human resources and administration at Galaxy Entertainment Group.

“My recruitment team are always busy, either recruiting new talent or replacing talent that may have been attracted to somewhere else because of promotion opportunities, or maybe a new property or a new casino opened, or the government are hiring and offering very good conditions for the local Macanese in particular,” says Martin.

Almost any area of business has high demand and – certainly in the skilled labour area – for management. With only about 350,000 people active in the work force, Martin says there is simply not enough labour in Macau on its own to be able to source all the growth that has been happening.

“When we opened Galaxy Macau, we hired about 8,000 people. And when another hotel opened, they may have hired another 8,000. It is very easy to add up to [the total labour force of] 350,000,” says Martin.

“So it is important that we have the right middle and senior management staff to be able to develop local talent and be able to pass on the expertise needed to run such a complicated business,” he adds.

Retaining talent is a challenge for everyone – the government, small businesses, hotels and casinos – because there is so much opportunity.

In the last 12 months, the Galaxy Entertainment Group saw nearly 2,000 promotions. “If you think about how many promotions we would have to have just to [retain people], there are probably five times that amount of promotions in the Macau market just at casinos. You can understand that even with good planning, good succession planning, good conditions, satisfying jobs, you still have that retention issue,” says Martin.

Sands Cotai Central, a mega tourism project which opened in April 2012, was hindered by slow progress in construction, due in part to government restrictions on the number of foreign workers companies in the labour-starved territory can hire.

“There is a quota system here and essentially, you will have to have two local workers for every imported one,” says Edward Tracy, president and chief executive officer of Sands China.

“The problem of the delay of the Sands Cotai Central project is more related to construction work. The majority of the construction workers tend to come from the mainland. When you’re talking about 15,000 construction workers, in our labour market that is equivalent to 2.1 per cent. It is unrealistic to think that you are going to get that many construction workers in Macau.”

Companies must obtain approval from the government before hiring a non-resident worker, according to Macau’s Labour Affairs Bureau. Some jobs, such as those of casino dealers, can be held only by local residents.

Tracy says they have been working closely with the government to assure them that they give priority to locals when recruiting staff. “We hired over 4,000 residents before we ever asked for one imported worker,” he says. The group currently has 22,000 employees, and Tracy says 77 per cent of them are from Macau.

The market is hoping that the government will loosen restrictions on foreign hiring to help the industry sustain growth. The Pacific Asia Travel Association (PATA) recently released a report commissioned by the Macau Government Tourist Office on Macau’s development into a “world centre of tourism and leisure”.

Andrew Drysdale, the board chairman of PATA, said that currently neither the quality nor the quantity of Macau’s human resources can fulfil the sustainable development of the gaming industry or tourism and leisure.

The PATA report therefore includes a recommendation on improving workforce productivity. This involves addressing a migration policy specifically tailored to skilled workers, and developing the capacity to work with local universities.