Cambodia has skills shortages across all industries, including clothing

Cambodia has skills shortages across all industries, including clothing

Cambodia's apparel industry – of critical importance to its national economy – is struggling to retain experienced workers, which means the sector is facing a chronic skills shortage.

The industry is experiencing a massive 44% annual labour turnover, meaning nearly half of its workforce quit jobs every year, an industry expert notes, assessing data from a survey earlier this year.

The problem means the sector is facing a chronic skills shortage, says Silas Everett, the Cambodia country representative of the US-based Asia Foundation, a non-profit organisation trying to improve lives across Asia. 

But if the Cambodian industry is to deal with this challenge, it needs to shed some old assumptions, he notes. The first: that all factories need more workers and therefore recruitment is a matter of just opening the front gate of the factory.

"This certainly is not the case," Everett says. "We have found that factories want to find the right workers and finding those workers is not always easy." 

Indeed, the difficulty of crafting effective recruitment policies is made tougher for the sector by the fact that thus far, few recruitment agencies have been working with factories because currently "professional recruitment agencies cater to the professional and semi-professional sectors which is relatively low in volume."

The good news, suggests Everett, is that recruitment agencies are starting to realise the "big business potential" in facilitating the skilled manual labour market in Cambodia.

But to succeed, agencies will have to overcome a second assumption that prevents garment factories from adopting effective recruitment policies: that such services are prohibitively costly and hence factories rarely budget for such services.

Recruitment practices

Current recruitment practices within Cambodia's garment sector remain "largely informal," according to the Asia Foundation survey that included 590 member factories of the Garment Manufacturers Association in Cambodia (GMAC).

In fact, 98% of all participating factories admitted their most common way of finding workers is simply "selecting workers in front of the factory gate."

It is common practice for prospective workers to show up at a factory gate when they need a job and a factory HR manager or supervisor selects a handful of these potential employees for interview before being immediately put to work. Informal referrals are also widely used, with 81% of factories using such recommendations to recruit staff.

But easy appointment processes are matched by the willingness of workers to leave a company, with the result that they do not remain in post long enough to gain skills.

Sewing and leadership positions take the longest to fill

As a result, "sewing and leadership positions, such as supervising and team leading, appear to be the positions that take the longest to fill," according to the survey. Nearly 44% of respondents said "sewing" jobs were hard to fill, 42% said the same of supervisor roles and 35% regarding team leader jobs.

Industry-led initiative

The GMAC is trying to address the skills gap with an industry-led initiative.

"A new vocational training centre to train garment workers will be opened in June this year," the association's secretary-general Ken Loo told just-style.

However, where high labour turnover is concerned, it is "something for individual companies to control," Loo says. "Despite a contract, if an employee decides not to turn up the next day – it's totally up to them."

Everett suggests an effective way for factories to address the talent gap would be to provide information on available jobs to the government's national employment agency. In fact, businesses are supposed to do this by law, but "so far it has been difficult for the government to enforce."

He says providing job seekers with information about working conditions in factories where working conditions are better could help reduce recruitment costs for well-managed factories while increasing recruitment costs for poorly performing plants.

The problem for Cambodia is that it has skills shortages across all industries, which is often "cited as a barrier to investment by foreign employers," recruitment specialist AAA Cambodia told just-style, adding both local and foreign businesses in Cambodia need to invest heavily in training staff.

This issue has been recognised, however, with the government paying more attention to the vocational training sector in Cambodia, along with international development organisations.

"Having more skilled workers should help to reduce those costs and help increase productivity of these business," says AAA Cambodia managing director Susanna Coghlan.

Potential partnerships

Djamel El Akra, the chairman of the human resources committee at European-Cambodia business organisation EuroCham Cambodia, suggests employers establish partnerships with public agencies to formalise and diversify their recruitment processes, working with bodies such as the Cambodian National Employment Agency (NEA).

It collects data on recruitment issues and these have been informing the government about the scale of the problem – figures have proved a "mismatch between vacancies in the manufacturing sector and level of skills of job seekers registered with the NEA," Akra says.  

Ultimately, however, the difficulties companies have in retaining staff is rooted in the fact that Cambodia's garment workforce comes mainly from rural areas.

These workers' goal is not to find a career in a specific industry, but to increase the household income by finding whatever opportunity, Akra explains. This meshes with the desire of employers to minimise their costs through having a flexible workforce with just enough skills to yield current levels of productivity, but not improve it, he says.

To counteract these causes, the industry needs to develop a "partnership that goes beyond recruitment" with workers by developing vocational training plans and a career development plans, even though these would be tough to implement.

For the time being, at least, Everett says the industry needs to get the recruitment process right. "Mobile internet use among garment workers has become widespread in Cambodia and therefore the costs of disseminating job information have come down a lot."

Moreover, the costs of integrating record retention and building up worker databases have fallen as well.

The Asia Foundation survey recommends that "brands and factories should focus on recruiting quality workers instead of a larger quantity of workers" by formalising the recruitment process – providing more information about job opportunities among workers through recruitment services and other channels. 

But will factory owners listen? Ultimately, they may have to, if Cambodia is to retain its edge in garment manufacturing.