Focus on rewarding local employees, employers in Malaysia told

Malaysia needs to provide incentives and raise salaries to keep more Malaysians employed in the local workforce, says the Human Resources Minister.
By: | June 6, 2023
Topics: Compensation and Benefits | Malaysia | News

To curb the brain drain in Malaysia, employers should consider raising wages and providing more benefits to entice more employees to stay in Malaysia and join the local workforce.

This was one of the key points that Human Resources Minister V Sivakumar has suggested in response to the Malaysian Employers Federation (MEF)’s comments that a recent government ruling requiring at least 80% of the workforce in manufacturing companies to comprise of Malaysians by the end of 2024 was impossible to achieve. Sivakumar has remarked that despite the numerous job opportunities available in Malaysia, more employees are travelling abroad to countries like Singapore due to better pay and benefits, reported Free Malaysia Today.

“They (employers) can’t stick to the RM$1,500 (US$331.07) minimum wage rate and must look into how they can provide (higher) wages and additional facilities and benefits so that Malaysians would no longer choose to work overseas,” he explained. 

READ MORE: Malaysia’s DPM calls for fair bonus distribution to boost productivity

While 31 December 2022 had previously been set as the deadline for the manufacturing sector to have a 4:1 local-foreign workforce ratio, the timeline has since been shifted to the end of 2024, as companies have been unable to attract enough local employees to hit their initial targeted timeline.

Sivakumar also pushed employers to use initiatives already offered by the Malaysian government to meet the target, citing the targeted employment incentive, where RM$1,800 (USD$393.23) will be given over a three-month period to employees who meet certain criteria and were unemployed for more than two months.