Matching grants proposed to bridge Malaysia’s SME skills gap

Small and medium-sized enterprises (SMEs) in Malaysia continue to grapple with a significant shortage of skilled and semi-skilled employees, posing a challenge to their growth and productivity.

Yeoh Seng Hooi, Secretary-General of the Small and Medium Enterprises Association (SAMENTA), has called for SMEs to be given priority in hiring graduates from government skills development centres to bridge the talent gap.

To support this initiative, Yeoh proposed a matching grant system to fund the training of skilled employees. “The government will sponsor students’ training. SMEs who recruit will cover 50% of training costs, and this money would go into a revolving fund to support future initiatives,” he said.

Yeoh’s comments come amid concerns over the growing number of Sijil Pelajaran Malaysia (SPM) holders—more than 500,000 between 2020 and 2023—who have opted not to pursue further studies, raising questions about their long-term career prospects.

While SPM holders can earn up to RM2,475 (US$558.36) per month in semi-skilled roles, the Association of Employment Agencies Malaysia Vice-President, Suresh Tan, warned that bypassing tertiary education could limit career growth and financial stability. The latest Salaries and Wages Survey Report 2023 by the Department of Statistics Malaysia found that low-skilled SPM graduates earn an average of RM1,982 (US$447.14) per month, significantly lower than diploma and degree holders, who earn RM3,707 (US$836.31) and RM5,242 (US$1,182) respectively.

Yeoh also underscored the importance of science, technology, engineering, and mathematics (STEM) education, stating that prioritising these fields is long overdue.

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When asked about alternative pathways for SPM graduates, Yeoh pointed to the Malaysia Productivity Corporation’s Academy in Industry programme as a viable solution. The initiative allows trainees to receive hands-on experience with SMEs while attending theoretical classes at partner colleges, with employers covering the educational costs.

He continued, “This model benefits both SMEs and trainees, as organisations gain skilled employees and trainees receive paid training. However, trainees must be willing to commit to a bond with the organisation.”

Yeoh also acknowledged the positive impact of government initiatives such as the Human Resources Development Corporation (HRD Corp) grants, which have played a crucial role in SME workforce development.

Ultimately, he stressed that SMEs need to shift their mindset towards prioritising training and upskilling, while employees should also recognise and appreciate the investment made in their professional growth, reported News Straits Times.

As Malaysia’s SMEs navigate workforce challenges and seek innovative strategies to attract and retain talent, HR leaders will have the opportunity to gain deeper insights at HRM Asia’s CHRO Series Malaysia, taking place on 16 July 2025. To find out more, click here.