Contracting on the rise as economic and cost challenges persist

Businesses in Malaysia switched tacks when hiring in 2025, relying more on contract hiring to bolster their ranks.

“Contracting has emerged as a compelling route to secure talent. Squeezed by cost pressures and budget constraints, businesses appreciated the flexibility of scaling team sizes up or down through contract hiring,” says Gan Hua Choon, Country Manager, at Robert Walters Malaysia.

Although businesses kept a tight hold on purse strings, digital transformation remained a priority. Considerable spending went, in particular, towards projects involving AI strategy and automation.

Read on to find out more about the labour market and hiring trends for Malaysia’s Contracting professionals in 2026.

Hiring trends for 2026

“If economic conditions remain hazy, and interest rate pressures and inflation persist, we’ll likely see a sustained surge in contract hiring volumes,” remarks Hua Choon. This marks a larger shift in workforce planning, where businesses strive to find the right balance between project-based, contract talent and permanent employees.

As more shared services centres are established in Malaysia, businesses will increasingly turn to contractors to ramp up operations.

The larger push towards digital economy initiatives across Malaysia will keep demand high for technology professionals, especially in areas such as AI, cybersecurity and data.

Top roles and skills in demand

In 2026, software developers, project managers, and data engineers and scientists will be highly sought after.

Attributes such as resilience, adaptability and agility will help professionals stand out in the contracting space.

“This is because contract professionals need to be able to take on a variety of different projects, and to adapt fast to changing environments,” explains Hua Choon.

He also points to specific finance and data roles as being at high risk of integration with AI. Already, data processing and analysis tasks are being replaced by AI, while chatbots take over responsibilities usually covered by service desk roles. Professionals are advised to learn how to use AI tools to increase efficiency and productivity.

Contracting has emerged as a compelling route to secure talent. Squeezed by cost pressures and budget constraints, businesses appreciated the flexibility of scaling team sizes up or down through contract hiring.

Advice for talent attraction and retention

Candidates are generally selective when choosing to take on a contract position, with salary, benefits and flexibility in work arrangements forming a baseline in their considerations. However, Hua Choon observes that increasingly, candidates see contracting as a career strategy rather than a fallback option. Such short-term stints provide the opportunity to gain diverse experience, with exposure to technologies like AI, making a job move even more appealing.

Competition for talent in the Contracting space is heating up. Therefore, Hua Choon’s advice to companies wanting to engage contractors is to offer substantial benefits and premium compensation packages. They should also aim to make interviews as seamless as possible, as candidate experience is now a key deciding factor for many professionals.

“Overall, companies that can lead with purpose will find themselves on a very strong footing. Start by being crystal clear about business goals, as that is the foundation for building trust with employees,” he concludes.

Salaries go up

Increments for job seekers who move from permanent to contract positions are expected to fall between 25 – 30%.

Find out more

Request access to our 2026 Salary Survey to benchmark salaries and to find out more about key hiring trends in the Contracting industry in Malaysia.