Malaysia’s Brain Drain: Salary Isn’t the Only Issue

Aside from money, Malaysia's brain drain issue is also attributable to safety, career growth opportunities, and the standard of living. 

Randstad Malaysia's Fahad Naem said that employers could do more to bring Malaysian talents back for knowledge sharing and develop the local talent pool's skills. 

More than 64% Malaysians want a safe work environment

According to a recent Workmonitor survey:

• 64% of respondents want a safe work environment,

• 52% want the opportunity to do meaningful work, and 

• 49% want job flexibility to accommodate outside-of-work commitments while also recording a shift in career priorities.

Fahad said that employers increasingly satisfy these higher demands in order to secure skilled workers. 

When it comes to technology, those with specific skills and relevant experience can negotiate for up to a 10% pay increase when changing companies, whereas those who work in specialised areas such as cybersecurity and blockchain can ask for up to a 35% pay raise when changing employers.

He went on to say that, in addition to pay, businesses are adopting measures such as flexible work arrangements and enhanced healthcare support.

Fahad said that job security in other countries is determined by employment laws, the industry and career choice.

According to him, the more in-demand a job is, the more likely it is for a person to feel secure in their employment.

However, he added that there are numerous variables to consider when relocating abroad, including the psychological cost of abandoning one's safety net and social group.

Depreciation of the Malaysian ringgit also plays a role

Should the ringgit depreciate and inflation hit Malaysia, Mercer's Market Leader for Malaysia, Koay Gim Soon believes it is reasonable for homegrown talent to work abroad because of the chances available there.

He suggested that because of the weakening of the Malaysian ringgit, it may be more appealing for talent to contemplate relocating abroad, particularly to Singapore.

However, currency value, which is connected to remuneration, is only one of many elements that talent should study before migrating abroad. Other factors to consider include:

• Practical relocation and family considerations,

• Tax implications,

• Cultural barriers,

• Lifestyle, and 

• Cost of living.

He explained that the value of the currency impacts employee salary, so it could be a motivator for individuals who are open to the concept of relocating. Employers who wish to keep and recruit top employees must regularly examine and factor this into their overall remuneration packages.

Workers are reevaluating their priorities around work-life balance

Based on Mercer's 2022 Global Talent Trends Study, employees are reevaluating their goals and employment choices around balance and how they can fit work around life rather than life around work.

This increasing attention on the employee experience and compensation will be a major push and pull element for people considering leaving Malaysia to pursue career opportunities abroad.

In terms of the benefits provided by corporations to retain their employees, Koay emphasised two points:

For starters, multinational corporations would be able to offer international assignments as opportunities for their finest employees to advance their careers, and relocation packages are always more appealing than local packages.

Meanwhile, enhancing the rewards package would be the most effective talent retention strategy for organisations that cannot offer talent mobility.

He added that since the pandemic, companies in Malaysia have been focusing more on the rewards component to make their reward packages more competitive as they raise their hiring efforts.

Even if income is still a major issue for most Malaysian employees, businesses can do better by:

• Improving workplace flexibility, 

• Providing better health benefits, and 

• Providing more opportunities for their employees to broaden their skill sets.

While off-cycle wage reviews are an option, Mercer's pulse poll from January to February 2022 revealed that salary increase budget modifications were evenly distributed in the face of rising inflation.

Almost three out of five businesses in the Asia Pacific said their wage increase budget is already aligned or increased to correspond with inflation.

According to Koay, when asked if they expected to adopt more frequent or off-cycle compensation increases in 2022 owing to inflation, 61% said no extra reviews or raises are planned.

While local talent going to work abroad is undoubtedly harmful to the country, he believes that working abroad helps individuals' personal and professional growth and development, hence enhancing Malaysia's talent pool and diversity when they return.

Do companies plan to increase wages this year?

According to Hays Malaysia, companies expect to raise compensation this year and provide flexible working arrangements that will be determined mainly by the firm or role type and company policy.

According to the findings of the 2022 Asia Salary Guide in China, Hong Kong, Japan, Malaysia, and Singapore: 

• 52% of companies plan to increase their workforce in the next 12 months, 

• 80% plan to raise salaries, and 

• Work-life balance is the leading reason why employees want to stay at their current company.

It was previously reported that 72% of Malaysian employees considered working abroad, which was fueled by several factors, including:

• 45% wanted a raise, 

• 32% wanted more rewards and recognition, 

• 28% wanted a promotion, 

• 28% wanted a bonus structure, and 

• 24% wanted flexible working arrangements.

Source: The Malaysian Reserve