Visitors at the Perkeso’s MyFutureJobs Karnival earlier this month. Women should be enabled to enter the workforce as it also helps to strengthen Malaysia’s economic and social fabric. — Filepic/The Star
AS we celebrate International Women’s Day (IWD), it is a great moment to reflect on Malaysia’s strides towards economic resilience and growth, significantly bolstered by the active participation of women. With the projection of 4% to 5% of gross domestic product (GDP) growth by end of 2024, Malaysia is focusing on creating more jobs that pay productive living wages and offer adequate social protection to boost living standards. The goal is to make it easier for Malaysians to access and keep these jobs.
Yet, when it comes to the workforce, there is an undeniable gap of income opportunities between women and men. According to the World Bank, women are less present in the labour force compared to men, with only half of the potential female workforce participating, compared to men at 80%. In Malaysia, the figure is slightly over at 55.5%, however trailing behind other Asean countries including Laos, Singapore, Vietnam and Cambodia. The comparison signals a significant portion of Malaysian women missing out on formal employment opportunities that offer better pay and secured social protection.
Realising the fact that many women are outside of the labour market, Social Security Organisation (PERKESO) has immediately set protection under the Housewives Social Security Scheme to address the gap of protection in the Care economy.
But to maintain our economic momentum, especially in the face of demographic shifts like declining birth rate and ageing population, leveraging the full potential of our workforce is key. McKinsey & Company reported that advancing women’s equality could add Malaysia’s collective GDP by US$50bil a year by 2025, an 8% increase over the business-as-usual GDP. Following this significant opportunity, the Malaysia MADANI framework aims to increase female workforce participation to 60%, recognising the untapped talent among women.
Women’s barriers in entering the workforce must be addressed, says Dr Mohammed Azman Aziz.
To achieve this, women’s barriers in entering the workforce must be addressed, particularly in supporting them to balance their professional roles with responsibilities at home. The United Nations Population Fund outlined paid maternity leave and high-quality childcare as key investments to help women to remain in the workforce. The Human Resources Ministry (KESUMA) has extended maternity and paternity leaves under the Employment Act 1955 (Amendment 2022), promoting shared family responsibilities by new parents. But there is more to be done.
Currently, the financial responsibility for maternity benefits and parental leave falls on employers only. These costs are transferred directly to women in the form of higher barriers of entry into the labour market. Since women are more likely to take these caring roles, the extension of maternity benefits and the frequent use of parental leaves are interpreted as additional cost for employers, pushing women out of the workforce. While supportive, family support policies may inadvertently discourage the hiring of women, particularly for small and medium enterprises, due to the perceived increase in operational costs. Evidently, from labour force statistics, women of childbearing age are participating less in the labour force.
To address this, PERKESO explores an alternative solution such as incorporating maternity cash benefits and parental leaves into its social insurance model to alleviate the financial burden of both employer and employees facing maternity. The principle, which is the cost of childbearing, is redistributed by active contributors in the labour market. The proposed policy was also announced by the Government under Belanjawan 2023, and the amendment of the Employment Insurance System (EIS) Act 2017 is currently under review by KESUMA to establish sustainable maternity benefits, which is practiced by many of the Organisation for Economic Co-operation and Development countries.
For example, Vietnam’s focus on gender equality, starting with the Doi Moi economic reforms back in 1986, has led to female benefitting from the Social Insurance Law, which has now progressed to six months of leave at full pay. Thanks to its strong laws on childcare and maternity, Vietnam now has the highest rate of female labour participation in the region, matching that of more developed countries.
Given the Government’s mission to strengthen the EIS by shifting the focus from protecting jobs to protecting workers, now is the perfect time to enhance maternity benefits and paid paternal leaves to encourage more women to join the workforce. The reform is just the beginning, leading to more tactical measures like tailored training and employment services to ensure a smooth transition for women in career breaks for maternity leave and increase uptake of paid parental leaves to support childcare emergencies.
This could also be a start for addressing a wider array of vulnerabilities. It encompasses women facing diverse challenges such as persons with disabilities (PWDs), ex-convicts, and elderly women. Existing ad-hoc labour market programmes operating under PERKESO Daya Kerjaya Program are already primed at targeting support to these marginalised groups, facilitating their successful entry into the workforce.
As we mark IWD, it is timely that we commit to advancing policies and practices that not only enable women to participate fully in the workforce but also strengthen Malaysia’s economic and social fabric. As the former managing director of the International Monetary Fund, Christine Lagarde phrased it well, “When women do better, economies do better.”
Dr Mohammed Azman Aziz
Group Chief Executive Officer
PERKESO
