TalentCorp turns Malaysia’s brain drain to brain gain

FOUR years ago when the Government was confronted with a difficult question of how could it reverse the brain drain into a brain gain, it decided to embark on two major initiatives. 

This saw Talent Corporation Malaysia Berhad (TalentCorp) embarking on the first, which was the Returning Expert Programme (REP) to encourage Malaysians working abroad to return to the “Tanah Air”. 

The second was the Residence Pass–Talent (RP-T) to retain highly skilled expatriates already working in Malaysia.

Both initiatives have shown results as attested by the World Bank. In its June 26 report “Improving the Effectiveness of TalentCorp’s Initiatives”, the World Bank stated “the REP is in fact effective in attracting people (Malaysians) with the skills that Malaysia needs.”

The report assessed and analysed the effectiveness of TalentCorp’s efforts since January 2011 to attract and retain global talent through its REP and RP-T initiatives.

Most importantly, instead of resulting in loss of taxes, the REP offered positive monetary value to Malaysia, with net fiscal benefits estimated at RM27,000 per returned applicant.

The report highlighted the REP was most effective for individuals who already had a job in Malaysia at their time of their application, as they were over 40 percent more likely to return as a result of the REP incentives.

The World Bank found the wide availability of professionally fulfilling and financially lucrative jobs in Malaysia was crucial for overseas Malaysians.

This was indeed a reversal in their viewpoints, unlike when they had earlier left the country for better career opportunities.

The World Bank recommended TalentCorp improve its focus on connecting talent to attractive job opportunities, such as through a job portal and making CVs available to employers.

Ambitious talent development

The World Bank report also revealed the RP-T was effective in approving and retaining genuinely talented global professionals.

Based on their broader perspective and international market exposure, approved RP-T recipients were viewed by Malaysian employers as more likely to contribute to their organisation’s profitability than locals.

The World Bank’s analysis concluded that both the REP and RP-T were successfully attracting individuals in filling some of Malaysia’s skill gaps. Such individuals, it noted, tended to earn a wage premium in Malaysia’s labour market, due to their value to employers in terms of experience and expertise.

Commenting on the report’s findings, World Bank lead economist Truman G. Packard stated: “Malaysia has set itself ambitious talent development goals and it is making progress in many areas, not least with the REP and RP-T initiatives.”
 

Much needed policies

So why were the REP and RP-T needed?

Back in 2011, the Government was faced with the reality that a significant portion of Malaysia’s skilled talent was leaving the country to pursue more promising and lucrative professional career opportunities available abroad, leaving behind a significant gap in the local talent pool.

At the same time, it realised that to meet the national goal of becoming a high-income nation by 2020, Malaysia needed a sustainable supply of expatriate talent who could fill the needs for highly skilled talent demanded by high value, high impact sectors of the Economic Transformation Programme (ETP).

Faced with the impact of these two talent predicaments, the Government acted to formulate the REP and RP-T initiatives.

Originally introduced in 2001, the management of the REP was transferred to TalentCorp in January 2011, with first round incentive and eligibility criteria revisions introduced in April 2011.

The REP facilitates the return of Malaysians with demonstrated expertise needed by Malaysia who have spent at least four years working abroad, with various incentives, principally an income tax rate of 15 percent for a period of five years, and fast track permanent residence status for their foreign spouse and children.

The RP-T grants highly skilled expatriates with a long term pass, enabling the talent and their spouse to live and work in Malaysia for 10 years, with the flexibility to move employers during that period.

These initiatives were implemented to fill the talent shortfall in professional and technical skills in high growth and priority sectors of the economy.

The World Bank recommended that the approval criteria for both REP and RP-T be continuously refined to better align with Malaysia’s talent needs and adapted to evolving labour market demands.

The World Bank proposed that the RP-T criteria for a minimum of three years working experience in Malaysia be removed to expand eligibility for highly talented expatriates to apply for RP-T directly from abroad.

 
Brain drain not a major concern

While the issue of Malaysians leaving the country in pursuit of better opportunities abroad has been frequently debated, it is not something the country should be overly concerned about, noted the World Bank’s Packard.

“Many talented Malaysians come home after being based abroad, which brings many benefits for the country,” he explained.

Citing China and India as examples of countries which reached out to their diaspora to fuel their respective home countries’ development, Packard suggested that the term “brain drain” may not be an accurate term to use to reflect what in reality is a cyclical movement of talent or “brain circulation”, which in the long term may bring a nation benefit.

“Plenty of studies show that countries benefit enormously when a significant group of their nationals who have international experience come back, they bring with them new technology, new ideas, new business niches that didn’t exist before, more demanding expectations of their government and regulatory authorities to make it easier to do business.

“Those are the kind of things that people can really learn when they go abroad,” added Packard.

The Global Malaysians job portal makes it much easier for your friends and family abroad to seek career opportunities back home. There’s no better time to come back and be part of Malaysia's economic transformation. Visit  http://rep.talentcorp.com.my/jobboards/jobboards for more.