This article first appeared in Digital Edge, The Edge Malaysia Weekly on October 13, 2025 - October 19, 2025

At a glance, Malaysia’s labour market is showing signs of recovery. Unemployment dropped to 3.1% in 1Q2025, which is the lowest since before the Covid-19 pandemic.

Companies are hiring, workers are progressing in their careers and confidence seems to be returning across multiple industries. But as we peer beneath the surface of this apparent stability, a more complex picture emerges — one defined by uneven recovery, deepening talent gaps and the looming influence of automation.

The story of Malaysia’s post-pandemic recovery is not one of pure momentum. It is one of recalibration.

The latest data from Jobstreet by SEEK reveals a hiring landscape centred around core operational functions. The top five job categories — accounting (12.7%); manufacturing, transport & logistics (11.2%); sales (10.3%); engineering (8.5%); and administration & office support (8.2%) — collectively made up 51% of all job postings in the first half of 2025.

Yet hiring momentum is also visible in other sectors. Healthcare & medical (4.4%), human resources & recruitment (4%), and information & communications technology (ICT, 3.3%) all accounted for a meaningful share of job ads, indicating rising demand for specialised, high-skill roles. This points to a broader recalibration across industries, where talent competition is intensifying — particularly in knowledge-driven and digital-first sectors.

But the real story lies in how competition for talent is intensifying across different sectors. Our data shows that application rates vary significantly across roles — not as a signal of surplus or scarcity, but as a reflection of structural shifts in Malaysia’s workforce.

Roles in sales and accounting, for instance, are experiencing application rates between 50% and 25% below the market median, indicating a shortage of talent in these areas. In contrast, sectors like manufacturing, engineering, administration, HR and customer service are becoming increasingly competitive, with application volumes 20% to 80% above the median. Meanwhile, healthcare and ICT have relatively balanced demand and supply dynamics.

These differences are influenced in part by Malaysia’s semi-skilled labour composition, with over 60% of the working population falling into this category and by how certain sectors are perceived in terms of job stability and prestige.

But the underlying trend is clear: Competition for future-focused talent is growing, especially in higher-skilled areas like digital, artificial intelligence (AI) and green jobs. The challenge now is less about the availability of work and more about whether the workforce is equipped, enabled and encouraged to pivot towards these emerging opportunities.

In theory, this should be solvable through upskilling and reskilling. But the solution isn’t just technical. It’s also cultural. There remains a strong social preference for “stable” jobs in administration and finance, even as industry needs shift towards customer-centric and revenue-driving functions, like sales.

The question is, how do we realign aspiration with opportunity?

This is where the private sector, policymakers and educational institutions are encouraged to come together to provide more training and reframe how we talk about value and growth. Sales may be celebrated in some circles as a high-impact, high-reward career, but it also comes with unpredictability — commissions vary, targets shift and stability isn’t guaranteed.

In contrast, fields like engineering or accounting offer more structured career paths, with clearer qualification routes and steadier income.

These differences shape perception, and until we reframe how we define job security and value, talent mismatches may persist despite ample openings.

The next phase of labour market recalibration isn’t just about mindset; it is also about methodology. As employers recalibrate their recruitment processes, AI is increasingly becoming a key part of the equation.

At Jobstreet by SEEK, we are seeing more companies experiment with AI tools to streamline hiring, automating everything from job ad optimisation and CV screening to interview scheduling.

Yet despite these advances, caution remains. According to our Hiring, Compensation & Benefits Report 2025, nearly half of employers are wary of over-automating the recruitment process, and their hesitations are valid.

While AI can accelerate workflows and reduce administrative burdens, it also risks removing the human touch by introducing bias, reducing opportunities for personal connection and overlooking nuanced traits like cultural fit or leadership potential.

Ultimately, AI is only as effective as the intention behind its use. It is not a replacement for human judgement, but a complement to it. The most successful employers are taking a calibrated approach — using technology to manage transactional tasks  like filtering high-volume applications  while empowering recruiters to focus on what can’t be automated: understanding people, potential and fit.

Malaysia’s job market may be expanding, but the nature of employment is evolving. While permanent full-time roles still make up the bulk of hires — 85% in 2024 — many companies are diversifying their workforce models.

The most notable growth has come from part-time and temporary positions, especially among small and medium businesses.

In 2024, 40% of companies hired permanent part-timers, a sharp increase from just 3% in 2022. Contractual full-time hires also rose from 19% to 39%, while part-time contract hires climbed from 8% to 25%. Among large businesses, the trend is even more pronounced, with half hiring permanent part-timers in 2024 compared with only 9% two years prior.

These shifts aren’t solely driven by employer needs for agility; they also reflect changing expectations among talent, particularly Gen Z. Younger workers are rethinking what a “good job” looks like.

According to our Talent Attraction Lab, 48.3% of Gen Z say flexible working hours are a must-have, and 53.8% are especially drawn to employers that offer remote or hybrid work. Nearly half value the ability to work independently and half say that working for a purposeful organisation is non-negotiable.

This evolving mindset is reshaping how jobseekers evaluate opportunities. While 77% of companies gave salary increments in 2024, most were in the 1% to 5% range. Pay is still important, but today’s candidates are also looking for work-life balance, wellness support, and a structure that aligns with their personal values and goals.

To stay competitive, organisations must move beyond a one-size-fits-all approach to hiring. Whether it’s full-time, part-time, hybrid or project-based, the future of work is not just flexible — it is purpose-driven, customisable and human-centred.

It is tempting to measure progress solely by gross domestic product (GDP) or employment statistics, but real progress lies in how people experience their work. Do they feel valued? Do they see a future? Can they trust their employer to invest in their growth?

The evolution of Malaysia’s job market will require more than digital tools and macroeconomic wins. As we navigate a period of rapid technological change and shifting workforce values, what’s needed now is a recalibration — one that aligns business strategies with human needs.

This means empathy-driven leadership, bold policy experimentation and a national conversation about what meaningful work looks like in an era where AI is reshaping how we hire, manage and grow talent.

We are at a crossroads. One path leads to a high-performing but fragmented job market — where companies embrace AI to streamline recruitment, yet fail to invest in the very skills and people needed to thrive in a tech-driven future.

This creates inequality not just between industries, but within them: between roles that evolve with support and training, and those left behind. The other path demands deeper transformation — where people and technology grow together, where policies prioritise inclusion and upskilling and where hiring is treated not merely as a transaction, but as a long-term responsibility to the workforce and society.

Nicholas Lam is  managing director of Jobstreet by SEEK Malaysia

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