In 2023, Malaysia experienced a slightly looser job market that was fraught with uncertainties and cost-cutting measures. Ai Rene Tan, Country Manager at Robert Walters Malaysia, points to concerns arising from escalating costs, local political conditions and geopolitical events as some of the key reasons behind the tentative mood of the market over the last year.

“The global economy was affected by the Russia-Ukraine War and Israeli-Palestinian Conflict, while here at home in Malaysia, political uncertainties, falling exports and currency devaluation prompted some companies to downsize and cut costs,” she shares. “Many companies took a hawkish stance towards hiring, with some even pausing recruitment activities for a time.”

Candidates, too, were cutting back on spending in response to the rising cost of living. Many weighed monetary benefits more heavily, leading to a higher acceptance of counteroffers in the past year.

Nevertheless, there were still positive developments that bolstered the job market. Ai Rene notes that public and foreign investments in Malaysia have increased as the country establishes itself as a commerce and technology hub. Most recently, the Minister of Economy also announced the government’s commitment to developing Kuala Lumpur as a regional centre for startups and digital industries. This growth is evident from the rising number of fintech startups minted in the past year, as well as the expansion of global business services.

Read on to find out more about Ai Rene’s expectations for Malaysia’s labour market in 2024.

Corporations embrace sustainability and CSR

Companies have already begun incorporating sustainability and corporate social responsibility (CSR) into their recruitment. In the process of doing so, they are reaping great benefits such as shaping the organisation into a more sustainable and socially responsible member of the business community, as well as attracting top talent who resonate with these values. In the year ahead, they are likely to expand on existing efforts in this area.

This begins at the very top, with Ai Rene observing, “There has been a stronger emphasis on hiring ethical leaders who make equitable decisions, and who show a genuine commitment to sustainable business practices and CSR initiatives.”

Many companies will also promote sustainable work practices such as remote work options, reduced carbon footprint policies and eco-friendly office spaces – which all collectively help foster a culture of sustainability within the organisation. We can also expect to hear companies share more about the green and social initiatives they have worked on as they seek to connect with potential employees who share the same outlook.

“Within the hiring process itself, more companies have, and will lean more into introducing sustainability criteria into job descriptions and candidate evaluations,” adds Ai Rene.

More diverse, blended workforce

In 2024, Ai Rene foresees that there will be more traction for the pushback to on-site work. She explains, “As companies move on from the pandemic era, some employers view the return to the office as a way to reinforce organisational norms, guarantee maximal operational efficiency and revitalise employee bonds that may have weakened during remote work. Some of them believe that face-to-face interactions can help their teams become more engaged and collaborative.”

Another trend that has been picking up speed is the emphasis on diversity and inclusion in the Malaysian job market. Ai Rene says that companies have introduced strategies such as unbiased recruitment processes and highlighting diversity in job advertisements, as well as investing more efforts into cultivating an inclusive culture. This is expected to continue as companies understand the value of a diverse workforce.

The larger hiring landscape itself is undergoing some massive adjustments. With the rising popularity of the ‘Future of Workforce’ concept, companies in Malaysia are constantly trying to transform and stay competitive. More companies will rely on AI-based tools to streamline candidate sourcing, screening and selection in the recruitment process. And as AI automates many procedural tasks, there will also be a stronger emphasis on specific soft skills, with innovative, forward-thinking, creative and tech savvy candidates standing out. All in all, Ai Rene expects that we can see a new blended workforce begin to take shape in the year ahead.

Top hiring trends for 2024

Environmental, social and governance (ESG), data centres and digital transformation and automation initiatives will set the tone for Malaysia’s hiring landscape in 2024.

The demand for professionals with ESG and sustainability expertise has been growing, with the financial services, energy, technology, consumer goods, and healthcare sectors being some of the industries that are the most hungry for talent. The introduction of the National Energy Transition Roadmap (NETR) will only spur on more investments and job opportunities in the renewable energy sector.

Furthermore, the rising popularity of electric vehicles has also accelerated the development of emerging technologies and the push for sustainability. This has translated into a higher demand for engineering and technical talent.

Some of the top skillsets and roles in this space include sustainable finance, renewable energy development, green technology solutions, supply chain sustainability and ethical research practices. Within finance, demand for professionals in sustainable investment management and ESG risk assessment will be high. There will also be more demand for engineering and technical talent in this space, particularly those who can address needs in clean energy, ethical product development, and green manufacturing.

More jobs will also be created as Malaysia’s data centre industry expands, to the tune of a projected RM7 billion by 2027. “Opportunities will be available as the industry constructs new data centres, brings them online, and keeps them running in the years to come,” Ai Rene remarks.

Many industries are undergoing digital transformation initiatives to improve operational efficiency, enhance customer experiences and sharpen their competitive edge. As a result, talent that can help drive digital transformation and automation will find themselves heavily sought after in spaces like financial services, manufacturing, retail and e-commerce, IT and healthcare. Some of the top skillsets and experiences include fintech, industrial automation, e-commerce, software development, cloud computing, cybersecurity and health informatics.

Anticipated salary growth in 2024 is expected to remain steady, driven by intensified competition among new market entrants vying for the same talent pool.

Advice on talent attraction and retention

Setting the stage for the current talent market, Ai Rene explains that talent attraction and retention in Malaysia have grown more complex and challenging. Companies today need to navigate intensified competition, the evolving expectations of the workforce, and a strong demand for highly specialised skills.

“We are now in a candidate-driven market where it’s common for each candidate to have multiple job offers at any given moment. With these options at hand, candidates are free to choose based on preferences like flexible or hybrid work arrangements, stronger work-life balance, whether they feel connected to the organisation’s purpose, and prospects for learning and growing their career,” Ai Rene elaborates. “Nevertheless, some candidates still favour stability over potentially attractive, yet unstable opportunities.”

To retain their talent, some employers have put up enticing counteroffers, promising higher salaries, improved benefits, and career development opportunities. This approach demonstrates the organisation’s commitment to their high-performing employees, and it also seeks to minimise costs associated with hiring and training.

This is a strategy that Ai Rene says is the step in the right direction. She further notes that companies should lay out career progression pathways clearly, and make adjustments to remuneration to account for rising costs and inflation. Providing improved benefits, such as family-friendly policies for working parents, can also go a long way towards increasing employee satisfaction.

Companies that prioritise employee engagement and equity, diversity and inclusion (ED&I) initiatives will also have a better shot at attracting and retaining their talent.

Lastly, when it comes to hiring, Ai Rene advises streamlining recruitment processes and providing clarity around job scopes from the get-go.

Salaries to rise steadily, plus better benefits

In 2024, salaries are expected to increase at a steady pace, with some sectors and industries seeing larger spikes than others as new players to the Malaysian market vie for a limited pool of talent.

In most cases, employees staying with their existing companies will receive increments between 3 – 5%, pegged to inflation. Meanwhile, job movers can look forward to increments between 15 – 20%, with some in-demand roles commanding raises of up to 30%.

While financial incentives are still important, Ai Rene notes that more candidates now prioritise company and management culture as key considerations, so companies will look at improving their compensation packages more holistically.

Find out more

Request access to our 2024 Salary Survey to benchmark salaries and to find out more about key hiring trends in Malaysia.