PETALING JAYA: One-off holidays are a bane for business, as many entrepreneurs would have us believe.
They have to spend extra on overtime wages to keep the wheels of business turning, and if the workers still insist on taking the day off, operations are disrupted.
Worse than that is the massive losses in productivity, which the Malaysian Employers Federation had previously estimated would amount to almost RM1 billion.
But the truth is that it is not all bad. For some, it is an opportunity to make extra money, according to Malaysia Retailers Association (MRA) president Andrew Lim.
“It is a boon for small retailers. They will have more business, yet they run on very low cost,” he told FMT Business.
These are usually family businesses where everyone, including the children, help out.
On the other hand, larger retailers would have to bank on a boost in sales to cover the extra cost, mostly in overtime wages, to remain open on such holidays.
Retailers in good locations with high footfalls are likely to reap the most benefits as consumers go out to shop.
Prime Minister Anwar Ibrahim’s decision to declare April 21 as a gazetted public holiday to give the people an extra day to celebrate Hari Raya Aidilfitri drew criticisms from business groups.
Small and Medium Enterprises Association (Samenta) chairman William Ng said declaring a holiday on short notice would disrupt fulfilment orders for businesses and it would have an impact on their contractual obligations.
Delivery and logistics are all dependent on their ability to plan well in advance, he added.
“Declaring a public holiday on short notice makes it difficult for us to fulfil our contractual obligations and in the worst case scenarios, may even subject us to penalties and cancellation of orders,” he told FMT Business.
“When businesses, including SMEs, accept orders from clients, it is based on their ability to deliver on time,” he added.
For MRA’s Lim, getting employees back to work on such holidays was a bigger challenge than coming up with the money to pay them extra. “Many people opt to take the extra day off to enjoy a long weekend,” he pointed out.
He said this would also disrupt supply chains because drivers and logistics personnel prefer to take the day off.
It’s all about timing
But apart from the small retailer, few other businesses can expect to reap extra benefits from such impromptu holidays.
One would assume that with an extra day off, people would take the opportunity to get away from the hustle and bustle, thus filling up hotel rooms.
However, that is not the case, according to Malaysian Budget and Business Hotels Association (MyBHA) president Ganesh Michiel.
“In practice, the industry only really sees additional benefits when holidays are well-timed,” he said. Presumably, not many people are prepared for that impromptu getaway.
Ganesh told FMT Business the extra holidays during the festive seasons do not bring more customers to the hotels because most of them would have already planned their holidays and made their reservations in advance.
He likens the extra holiday to a gimmick. “It’s like saying ‘I give you one extra holiday’, when people have already applied for leave,” he said.
He said that if there was a genuine desire to help the hospitality industry, holidays should be given at a different time.
Malaysia has a penchant for declaring impromptu holidays. For instance, when the national team beat Indonesia in the final of the Asean Football Federation Suzuki Cup on Dec 29, 2010, the government declared on Dec 30 that the following day, a Friday, would be a public holiday.
Ganesh said such a short notice would not give anyone ample time to plan for a holiday. “A two-week notice would be more practical — for both businesses and customers,” he added.