KUALA LUMPUR: As Malaysia grapples with the challenge of retaining and attracting skilled workers, the government is stepping up efforts to create a more attractive environment for talent.
With a focus on increasing high-skilled job opportunities, encouraging a business-friendly ecosystem and ensuring competitive salaries, Malaysia aims to address the talent drain and boost economic growth.
A month ago, the World Bank Group chief economist Dr Indermit Gill said highly educated Malaysians were moving to Singapore for jobs because of the currency differentials and it was impossible to prevent them from going.
Around 1.8 million Malaysians have migrated overseas, with 60 per cent of the diaspora totalling 1.13 million individuals, residing in Singapore.
This migration of skilled professionals in engineering, medicine and technology has led to brain drain, impacting Malaysia's innovation capacity and global competitiveness.
These high-skilled workers, earning an average of S$11,776 (RM41,854), contribute significantly to brain circulation, transferring skills abroad.
However, their absence reduces domestic spending and economic growth potential, thereby affecting local industries, said Talent Corporation Malaysia Bhd (TalentCorp).
TalentCorp group chief executive officer Thomas Mathew said when Malaysia has enough high-skilled jobs and talents with the necessary skills, it naturally results in competitive salaries.
"This is closely tied to investments in the country, requiring a business-friendly ecosystem and a welcoming government.
"The Ministry of Investment, Trade and Industry and MIDA play crucial roles in facilitating these investments, while collaboration across government, industry, and academia ensures that Malaysia's workforce is equipped with the required skill sets," Mathew told Business Times.
To address brain drain, the Malaysian government - through TalentCorp - has launched MyHeart, an initiative encouraging Malaysians abroad to contribute their expertise back home, fostering brain circulation rather than drain, said Mathew.
MyHeart facilitates engagement and support for Malaysians overseas. For instance, Professor Amy Poh, a Malaysian academic in Japan, leads the Malaysian Japan Visionary Conference, showcasing research on geopolitics and the economy.
Last month during the Salam Dari Malaysia Programme in London, Human Resources Minister Steven Sim introduced MyHeart Innovate, aiding Malaysians abroad in establishing startups in the country.
Dr. Ahmad Syahid, a senior CFD Engineer in the United Kingdom, mentors Malaysian students on automotive design through TalentCorp collaborations.
"MyHeart also addresses returning families' concerns by offering educational support, partnering with schools and facilitating immigration and job placements, involving 60 companies. These initiatives reflect Malaysia's proactive approach to reversing brain drain, promoting national development, innovation, and educational support," said Mathew.
ManpowerGroup country manager for Malaysia Sanjoy Ghose said one way to encourage skilled Malaysians to stay is to focus on bringing international opportunities into the country.
Doing so will enable locals to pursue international opportunities without leaving Malaysia. To achieve this, the government may consider looking into facilitating remote work, Ghose added.
According to Talent Solutions' Total Workforce Index report, Malaysia ranks 35 out of 60 global markets when it comes to remote readiness.
Ghose believes that creating infrastructure and policies that support remote work may enable more Malaysians to pursue international work opportunities without leaving the country.
"At the same time, this may also attract skilled workers back to the country, leading to a significant boost to the nation's economy and knowledge base.
"They can also look into creating international exchange programmes with global MNCs where local professionals have the opportunity to gain exposure and experience abroad which they will then bring back to Malaysia," he told Business Times in an email interview.
Apart from that, promoting policies that attract Malaysians based overseas to return and reintegrate into the local economy, such as tax incentives and professional recognition of international experience, can convert brain drain into a brain gain.
"For example, TalentCorp already has programmes such as The Returning Expert Programme (REP) which facilitates Malaysian professionals returning home from abroad to meet the talent needs of Malaysia," said Ghose.
Singapore's DBS Bank vice president for risk and data analytics Gabriel Ryan pointed out that the main reason Malaysians work in Singapore is due to the republic's strong currency.
"For many semi-skilled workers, higher wages in Singapore are crucial for their financial survival. In Malaysia, these workers often struggle, so moving to Singapore is about earning more and supporting their families," he added.
For white-collar professionals, the high cost of living in Malaysia is a major concern, especially with subsidy removals. "Middle managers with five to six years of experience are more likely to move, while senior managers with families find it harder to uproot."
Retention strategies need to be targeted, said Ryan.
The strong Singapore dollar, influenced by US Federal Reserve (Fed) interest rates, drives the trend. "If the Fed cuts rates, it could benefit the ringgit and potentially stabilise the migration trend."
Ryan said however, the strong Singapore dollar does not always benefit foreign talent looking to settle down, adding that high property prices and the cost of raising a family in Singapore are significant barriers.
"Many professionals either choose to remain childless and work in Singapore or return to Malaysia to start a family. This is an area where the Malaysian government and agencies like TalentCorp can focus on supporting returnees," Ryan added.
Ryan, a Malaysian, has been living and working in Singapore since 2016.
As of 2023, remittances from Malaysians working abroad reached RM35.3 billion, boosting household incomes, reducing poverty levels, and enhancing overall economic growth.
"This additional income can be invested in education, health, and small businesses, further stimulating the domestic economy," said Mathew.
To enhance collaboration between the government and industries, TalentCorp has been tasked with conducting an impact study on AI, digitalisation and the green economy's effects on Malaysia's workforce.
Acting as the Human Resources Ministry's think tank, TalentCorp works with various departments and agencies to address evolving challenges.
Mathew said the study will serve as a reference for policymakers and the industry, especially SMEs, to prepare a future-proof workforce.