APART from a shortage of low-skilled foreign workers, Malaysia is also experiencing a shortage of talent.
It has worsened following the acceleration of technological transformation during the Covid-19 pandemic.
Since the pandemic, workforce across the globe, including Malaysia, went through several dramatic short and-long-term shifts.
These range from a sudden, necessary move to remote work, to larger questions surrounding work-life balance and the overall relationship between employers and talent.
The shortage of skilled workers has hampered business recovery as industries scramble to meet pent-up demand and new supply chain obligations.
Companies invest to digitalise their processes to reduce operational costs and make hybrid work possible.
In embracing new technologies, employees need to become more digital-savvy and productive at work.
Many employees realise the need to upskill and learn how to use new software.
At the same time, they face new work challenges that could impact their employability.
Meanwhile, employers across many industries are worried that they would continue to face difficulties in attracting, obtaining and retaining talent.
Ageing workforce aside, they also need to contend with talents leaving for other countries.
For instance, the oil and gas industry is heavily reliant on experienced foreign hires, especially in the areas of drilling, exploration and engineering design.
And what is becoming more evident is that demand for talent is increasing in areas such as the electrical and electronics (E&E), food and beverage, chemicals and chemical products, fabricated metal, and rubber products industries that include some of the sub-sectors, where they need to step up their capacity, and expansion plans due to the nature of their products and processes.
One area that is facing a huge shortage of engineers is the semiconductor industry.
Our local E&E engineers are being poached by manufacturers in neighbouring countries with lucrative opportunities.
This is evident in the increasing number of Malaysians seeking work in Singapore now that international borders have reopened driven by hopes of earning the stronger Singapore dollar.
The significant wage differentials and currency exchange rate and the opportunity to gain invaluable work experience and expertise in an international centre have long drawn Malaysians to Singapore.
Those pull factors stand in sharp contrast against push factors back home such as low wages, insufficient job opportunities and relatively less favourable career prospects.
The pandemic saw some of the foreign workers that the industry has trained being sent home.
They could not be replaced by the locals as the local workers have found other opportunities in the gig economy or transitioned to other industries during the various lockdowns.
At the same time, there is a lack of employable talents among local graduates as they fall short of industry expectations.
The impact will certainly be hard on smaller businesses.
They are generally less automated compared to the bigger boys like the multinational companies (MNCs) which would already have more advanced automation in place.
This is the reason why the MNCs outsource more labour-intensive work to small and medium scaled enterprises (SMEs).
The strength of Malaysia’s economy in part lies in producing more local talent in the fields of science, technology, engineering and mathematics (STEM) as stated by the Minister in the Prime Minister’s Department (Economy) Datuk Seri Mustapa Mohamed. STEM is the focus of Malaysia’s journey to become a developed nation by potentially integrating our manufacturing industry into the global value chain more significantly.
And there must be more efforts in reducing the gaps in technical and vocational education and training (TVET) programmes in the ecosystem.
This could be done by constantly exposing students to new and emerging technologies.
Hence the TVET collaboration hub will serve as a platform for the exchange of expertise and technology between TVET institutions and the various industries.
Malaysia must now be honest and serious in addressing the immediate talent shortage and lack of employability as pointed out by Bursa Malaysia chairman Tan Sri Wahid Omar in a recent discussion.
While our SMEs are keen to automate and digitalise, the challenge goes beyond technological efforts.
SMEs need the right mindset and processes to change. It is tough for them when there is a strong mismatch between the supply and demand of labour.
This is something the government must address quickly by speeding up the process of bringing in foreigners.
This could be a temporary stop-gap measures. At the same time, we must address the issue of long-term employability with specific measures.
Today, due to the shortages of talent, businesses in Malaysia are unable to take advantage of the surge in demand. Hence our business opportunities are being snapped up by neighbours like Vietnam and Indonesia.
In this respect, there is a need for the inclusion of TVET programmes in secondary schools.
We should begin at the start of secondary school. Students would have an advantage if they are equipped with technical knowledge as well. Every year, we produce students with good and average examination results.
But not all those with good results will be able to get places in universities and colleges.
If TVET is available at the start of secondary education, students could then further their training in skills development.
They will then be able to meet the high demand for skilled workers in the country. Many of these job opportunities now go to foreign workers.
Importantly, to address the employability issue, school education must be reformed quickly so that people could enter the job market without tertiary education.
We could start from primary school by focusing on reading, writing and arithmetic (3Rs) besides the most basic entrepreneurial-cum-survival skills.
As we move into the secondary level, students should be placed on short internships as many jobs require training through TVET programmes.
The courses designed must prepare the students for jobs not only in manufacturing but also in other areas of economic activities and the creative fields.
There is a need to establish a holistic approach with a one-stop agency that will coordinate school leavers and industries.
Students who have left school can be placed on internship with companies that could potentially absorb those who are deemed fit.
Reskilling and upskilling should be done by the companies or associations, for instance the semiconductor association. Schools and associations will be able to better understand their respective needs and capabilities.
A similar methodology could be adopted at the higher education level.
Such training need not be The Human Resource Development Fund claimable. In fact, companies under the semiconductor association for instance should be given some form of tax incentives for embarking on internship programmes.
To sum up, we must take note that talent shortage is a global issue.
Around 70% of global companies were affected according to a survey conducted by Manpower Group Talent Shortage Outlook as compared to 35% in 2013.
If this situation is left unchecked, it will only exacerbate the situation. It will have a strong negative repercussion on the economy. And Malaysia is no exception to this situation today.
We must build a holistic talent strategy.
To keep pace, an effective talent strategy should comprise a mix of the following key elements:
> Build by investing in learning and development to grow the talent pipeline;
> Tap by attracting foreign talent that cannot be built in-house;
> Cultivate by developing talent outside the organisation; and
> Assist by guiding people to move on or move up to new roles within the organisation.
Anthony Dass is AmBank Research chief economist and head, member of the EPU Economic Action Council Secretariat and Unitar adjunct professor. The views expressed here are the writer’s own.
