Malaysia’s Northern Region contended with several economic headwinds, which led to a decline in hiring in 2023.
“The larger Asian region has entered a more difficult phase in its post-pandemic recovery. The global semiconductor cycle has softened and is projected to stay in this cyclical downturn for some time,” explains LeeLing Lim, Manager for Robert Walters Malaysia’s Northern Region. The situation is worsened in large part due to with the sluggish macroeconomics conditions as well as the uncertainties from geopolitical events like the Russia-Ukraine War and the Israeli-Palestinian Conflict.
Hiring in the Northern Region have typically been driven by the manufacturing sector, but candidates have been reluctant to take up new opportunities even as companies have moved into the region and beefed-up operations.
“Candidates have been scared off by the waves of retrenchment going on across companies enacting cost savings measures. If they already have a steady job, they fear losing that stability and becoming the ‘Last-In, First-Out’ in case of redundancies,” LeeLing relates.
Nevertheless, there have been some bright spots in the hiring market. Long-term projects and strategic plans backed by the government are expected to continue, while other sectors have also been unaffected. Some sectors have even benefitted from the US-China Trade War, which has seen more companies moving from China to Malaysia. Industries such as tourism, transportation and logistics have also recovered well after the pandemic.
Penang also remains a frontrunner in the growing the industrial economy, playing host to more than 300 multinational companies and 3,000 small and medium-sized enterprises in the electronics, semiconductor and medical devices industries.
Read on to find out more about LeeLing’s expectations of the labour market and hiring trends for Malaysia’s Northern Region professionals in 2024.
Hiring activities to kick in in the new year
The semiconductor industry has recovered at a slower pace than expected, but it is expected that manufacturing volumes will bottom out in the first quarter of 2024 before taking a turn for the better. Demand for traditional consumer electronic goods will still be weak, but the growing shift towards automation, mobility and connectivity will revitalise and promote stronger demand for high-powered chips.
Therefore, LeeLing expects hiring volumes in the Northern Region to go up incrementally. Employees that were retrenched will find opportunities to move into new roles in the new year. Once companies complete their 2024 budgeting and planning sessions and gain more visibility on the outlook for the year ahead, they will likely lift the hiring freezes they imposed in 2023 and resume hiring activities. Thereafter, hiring is expected to hold steady throughout the year as the economy remains volatile and uncertain.
Meanwhile, candidates have developed a preference for the hybrid work model. Companies, too, have developed a stronger rapport with their employees and are thus more willing to allow such arrangements to continue.
Demand driven by several sectors
The biggest driver behind hiring volumes in 2024 is expected to be the manufacturing industry, which is expanding across the region with more new sites and facilities. Specifically, technical talent such as engineers, technologists and technical specialists will be highly sought after.
Many companies will also continue to modernise their IT infrastructure and systems, generating demand for talents from the tech industry, such as software developers and other candidates who can leverage digital tools to make processes smarter and more efficient.
LeeLing also anticipates that there will be a larger demand for sales and marketing talent in the year ahead, naming sales representatives, marketing managers and business development professionals as some key positions. “Companies rely on these functions to find growth pathways when markets are soft the way they are now,” she relates. “Hiring managers will definitely snap up candidates who can help them hunt for new business opportunities and bring up sales and profitability.”
Lastly, supply chain sectors and functions will also ramp up hiring in the year ahead, with an eye on candidates with strong commodity management, negotiation, sourcing, purchasing and planning skills. As LeeLing lays out, “Companies are no longer looking for the traditional buying and sourcing roles. Instead, they want candidates who can drive transformation and participate in business continuity planning to prevent disruptions.”
Understanding the needs of employees today
LeeLing notes that the hiring market is still primarily candidate-driven, with more job openings than available talent. As such, her advice is for hiring managers and employers to gain a deep understanding of their teams motivations and pain points.
Organisations are reevaluating business development to boost sales in a soft market. They're looking for candidates with strong hunting skills to explore and stabilise their business.
“As millennials and Gen Zs form the majority of the workforce, companies need to adjust their recruitment strategies to meet the needs of these generations. Employees do leave their jobs if they feel unheard,” she says. “Speak with teams across all levels and listen attentively to draw out ideas that can address their pain points. It isn’t just about salaries these days although the market is competitive with aggressive counteroffers and rising salary expectations, especially for talents with niche skillsets. Candidates do consider other perks such as hybrid work arrangements and career development opportunities.”
At the same time, it will help to provide candidates with some reassurance and stability. “Candidates are now less confident about moving jobs or initiating compensation discussions because of uncertain economic conditions. Stability is in the blood of Penangites, so it is a big win when companies can convince candidates they can provide that,” says LeeLing.
Nevertheless, candidates are more adventurous when it comes greenfield opportunities, which remains the strongest pull factor for the Northern Region. The prospect of kickstarting a new operation is seen as a deeply valuable for many candidates, who are keen to put these experiences on their CVs.
Salaries to grow at steady pace
In 2024, salaries are expected to rise steadily as new players enter the market to compete for a limited pool of talent. This may prompt companies to increase overall compensation. Job movers can expect increments between 15 – 20%, with in-demand positions commanding increments up to 25%.
Candidates remaining with their current organisations can expect salary increments of 4 – 7% during their annual salary review.
Find out more
Request access to our 2024 Salary Survey to benchmark salaries and to find out more about key hiring trends in the Northern Region industry in Malaysia.
