Digital transformation and sustainability set to dominate hiring in 2026

Digitalisation, automation and AI adoption proceeded at an accelerated pace across the Engineering & Manufacturing industry in 2025.

Within the manufacturing sector, demand soared for automation, robotics, controls, data and software engineers as companies pushed to modernise factories. Meanwhile, decarbonisation roadmaps and environmental, social and governance (ESG) requirements were a key driver behind hiring demand for sustainability, energy management and “green engineering” roles.

These changes made upskilling a must for industry professionals. Without it, job seekers experienced poor marketability and weaker salary prospects.

“Employers will find it increasingly difficult to fill specialist roles like automation and sustainability engineers as tech adoption expands across all industries,” states Aaron Low, Director at Robert Walters Malaysia.

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

Technology and sustainability take centre stage

The industry will keep on marching towards Industry 4.0 in 2026, prioritising initiatives like automation, robotics, Internet of Things (IoT), predictive analytics and AI integration in manufacturing. As Malaysia invests more in digital and AI upskilling programmes, manufacturers will expect higher digital literacy rates among their workforces.

According to Aaron, sustainability is no longer a mere plus, and it’s increasingly becoming a requirement for licensing, investment and market access. This will drive up demand for hiring in process engineering, particularly in energy optimisation and emissions reduction.

Top roles and skills in demand

Automation engineers will be in strong demand. These professionals will form the backbone of companies’ efforts to raise productivity, reduce dependency on manual labour, and accelerate the adoption of robotics, IoT and AI.

Maintenance and reliability engineers will also be in high demand in the hiring market in 2026. With the deployment of more robots, automated lines and IoT devices, businesses will rely on these talents for the critical task of keeping uptime.

Sustainability and green process engineers will be highly sought after by manufacturers. This demand comes from a growing need to redesign processes for better energy efficiency, waste reduction, circular economy, and ESG compliance.

The adoption of AI, robotics and digital systems has heavily influenced the type of soft skills that employers are looking for. Problem-solving and critical thinking skills rank high, as engineers will need to interpret insights, troubleshoot complex issues and adapt workflows through addressing the problems flagged by AI. Professionals who can learn fast and pick up new tools quickly also have a strong advantage in the labour market.

“Talent needs to recognise that routine tasks are fading fast. The future belongs to higher-value, human-centric skills — and to those who can harness AI by configuring, maintaining and improving the systems that power it.”

Work with AI to avoid redundancy

AI-powered robotics arms have reduced manual assembly, packaging and machine operations in highly standardised operations. Therefore, production and assembly line operators are at risk of being made redundant.

Maintenance roles will also be impacted. Although a human touch remains essential for troubleshooting and applying creative fixes, AI-driven predictive maintenance will reduce the need for large teams running routine checks.

According to Aaron, talent will do well to note that job scopes in the industry will shift away from routine, repetitive tasks and towards an emphasis on higher-value, human-centric skills. Working with AI – by learning how to configure, maintain and improve systems enabled by this technology – will be necessary.

Advice for talent attraction and retention

Job security now matters more for employees than before. The current economic uncertainty – stemming from currency weakness, inflation and global manufacturing slowdown – has made professionals cautious about any career moves. Nevertheless, those in high-demand niches are aware they possess scarce skillsets, and remain eager to switch jobs if offered strong compensation and growth trajectories.

“Engineers are drawn to companies that invest in upskilling. A key concern for them is to future-proof their careers by picking up skills in automation, AI and sustainability,” says Aaron.

Therefore, companies should look to provide employees with clear career progression pathways and opportunities to assume leadership positions. Some ways they could do this include implementing transparent promotion frameworks, offering rotational projects across projects or plants, and providing exposure to international assignments.

Salaries rise

In 2026, salaries are expected to trend up by between 5 – 10%. Job movers, especially for those vying for in-demand roles, may see wages rise by between 15 – 25%.

Find out more

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