KUALA LUMPUR (April 27): The lack of significant policy changes to Malaysia’s work immigration policies places the tech industry in an uphill talent battle in 2023, according to global recruitment firm Hays.
The firm said that while the sector will be characterised by strong growth in 2023, as more multinational corporations choose Malaysia as a location for their regional Asia-Pacific hub underpinned by investment confidence as well as cost savings, this growing demand will exacerbate the tech sector’s skill and talent shortage, unsupported by policy changes.
Meanwhile, Hays said demand for finance talent with diversified skills in finance and technology is at an all-time high, as the provision of digital banking licences to financial institutions has strengthened Malaysia’s banking sector, driving fintech innovation and digitalisation.
“As the industry continues to mature, traditional banks are feeling the pressure to accelerate their finance digital transformation efforts, so they are not left behind,” the firm said.
Malaysia’s carbon neutrality pledge and Bank Negara Malaysia’s financial industry sustainability efforts will also see growing demand for experts across sustainability functions like sustainable financing, strategy, as well as environmental, social and governance (ESG) specialists.
“Banks are racing to set up their sustainability team, creating a candidate-driven market where the right skill set will mean stronger bargaining power," added Hays.
Hays, which surveyed skilled professionals and employers, said salary was the dominant motivator for active jobseekers in Malaysia with 77% of the respondents saying they intended to leave their jobs for better salaries.
It noted that the Malaysian employment market remained strong in 2023, with the highest percentage of active jobseekers at 33% versus the other surveyed markets — which also included Singapore, Japan, Hong Kong and China.
“There was, however, a wider salary expectation gap between employees and employer,” Hays highlighted, adding that the majority of Malaysian employees expect more than a 10% salary increase, versus employers’ plans for increases of between 3% to 6%.
According to the survey, Malaysian employers grew staff levels by 51.2% in 2022, being the only market to have hired above the anticipated rate — compared with the other surveyed markets.
“Contract recruitment is expected to increase in 2023, with more employers indicating growth in temporary and contract employees compared with the previous year. Special projects and exceptional circumstances were key factors for Malaysian employers increasing their reliance on contract workers,” the firm added.
Hays said given rising inflation rates, a possible recession is looming on the horizon. “With developments in the global economy in the second half of 2022 triggering a bear market; not only will fund managers be monitored closely for performance, hiring activities across all functions in the industry will also be more conservative in 2023.”
Despite recession concerns, Hays noted that Malaysia’s manufacturing sector is expected to improve further following growth trends in 2022, driven by higher output across all industries, especially electrical and electronic, transport equipment and metal-related segments.
“The semiconductor, E&E, and chemicals sectors which are more export-oriented will see higher demand as more organisations adopt advanced technology for process and cost efficiencies.
“As industrial and business activities continue to normalise in 2023, most domestic-oriented industries including food, metal-related and construction are expected to expand further through the course of the year,” it added.
Hays said Budget 2023 incentives designed to boost infrastructure, attract foreign investment, enhance the maritime and logistics industry, and encourage sustainable agriculture and manufacturing operations, will create growth momentum in Malaysia’s supply chain and procurement industry.
“The country’s regional currency advantage and relatively lower cost of business operations and hiring will also present further opportunities for employers, although skills and talent shortage will continue to pose challenges.
“Freight, commodities and utilities are key areas where the domestic talent gap is most strongly felt, but salaries are not increasing enough to entice returning talent,” Hays said.
“Employers looking to strengthen talent attraction and close positions in freight forwarding, logistics, and procurement over the next year will need to reassess their compensation packages to ensure they are commensurate with role responsibilities,” it said.