Malaysia is facing a number of economic and market challenges. Will these problems continue into the foreseeable future?
By Zee Johnson
The Job Market
Malaysia’s chance at labour market recovery continues to be threatened. The Malaysian Employers Federation (MEF) recently revealed that 60,000 workers could lose their jobs this year, two times the previous year’s average.
MEF’s president Syed Hussain Syed Husman said that the proposed layoffs would greatly depend on the country’s economic situation, particularly on how well small- and medium-sized enterprises perform this year. He anticipates most cuts to be in manufacturing and construction, and recent Malaysia Industrial Development Finance research revealed that manufacturing employment contribution to total employment declined to 14.5% last year, the lowest ever recorded.
The Federation of Malaysian Manufacturers (FMM) president, Soh Thian Lai, however, said the group did not anticipate any major retrenchments this year. He stated that Malaysia’s growth rate of 8.7% last year was reassuring for the business sector and points to preliminary FMM research on business conditions that show employment continues to be stable amid a weaker outlook for the first half of 2023. “With continued efforts by employers to reskill and upskill existing workers, and government support to assist the unemployed to get the right skills to be gainfully employed, the labour market will remain resilient and strong in 2023,” he said.
Overall, leaders must remain on guard, as the country is still seeing some remnants of COVID-19. “Even though robust economic growth pace recorded last year, we opine labour shortages, tightness in global supply chain and COVID-19 concerns are among downside factors for solid recovery of the job market,” the FMM report said.
A Fleeing Workforce
Malaysian workers are looking abroad for better employment, and one of the reasons is the social injustice many experience, reports say.
Mustapha Sakmud, the deputy human resources minister, says workers are departing out of frustration of personal connections being the reason many are moving up the professional ladder and others aren’t. Migrating elsewhere will provide better, more equitable opportunities. “Developed countries have better laws that protect their workers’ rights from any discrimination, and also provide better salaries,” Sakmud told Singapore’s News Straits publication. “They are based on meritocracy, unlike in our ecosystem, which is sometimes based on connections or who you know.”
Better career prospects and better remuneration were other reasons workers were leaving, with the low salary rate in the country continually making it difficult for companies to retain professionals.
Sakmud said most workers were in sectors like oil and gas, power, financial services and sales, and nearly one million have relocated primarily to Singapore, Australia, and the United States.
But leaders can’t help but fear that this departure could ultimately mean long-term stunted economic growth. “When experts with intellectual potential leave the country in large numbers, it will make it difficult for the country to maintain high intellectual and academic standards. These individuals are the driving force behind creating a more educated and professional society, nurturing and developing other talents,” Sakmud said.
Finding New Ways to Recruit
Amid fluctuating economic progression and retraction, Malaysia is steadily testing out new strategies to draw workers into the country.
Malaysia’s Human Resources Minister, V. Sivakumar, confirmed that the government is looking for the best mechanism to allow employers to hire foreign workers without going through agencies. He said that several efforts have been taken to ensure that no agencies are making high profits from hiring foreign workers.
Malaysian officials have gone to countries like Nepal, Indonesia and Bangladesh to discuss the matter and work collectively on a best approach.
Sivakumar says acquiring talent without the usage of agents would help to reduce employer recruitment costs by nearly 80%, a reduction that would be positive not just for organisations but for the country overall.