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PUTRAJAYA: Deputy Prime Minister Datuk Seri Fadillah Yusof today reminded small and medium enterprises (SMEs) that while the government is committed to providing policies and incentives that support growth and human capital development, real transformation must begin within each organisation.
Fadillah, who is also Energy Transition and Water Transformation Minister, said leaders must recognise that people are not merely resources but the driving force behind every successful enterprise.
"Investing in talent is investing in the future of your business and, ultimately, the nation,” he said when officiating the SME HR Conference 2025 here on Monday (Sept 8).
He said that SMEs play a crucial role in Malaysia’s economy, contributing 40 per cent of gross domestic product and employing nearly half of the national workforce.
Elaborating, Fadillah said their challenges in areas such as attracting skilled talent, retaining employees and meeting compliance requirements are not isolated issues but national concerns that affect Malaysia’s competitiveness.
He then called for a change in mindset among SME founders who often view human resource (HR) management as a cost centre rather than a strategic growth driver.
Data from SME Corp Malaysia, he said, showed that SMEs with structured HR practices grow 2.5 times faster and scale three times more efficiently compared with those without.
The Deputy Prime Minister also highlighted emerging HR trends that will shape the future of work, including artificial intelligence (AI)-driven recruitment, skills-based hiring, hybrid work arrangements, employee wellbeing initiatives, diversity and inclusion, agile performance management and ESG-linked practices.
"These are not future possibilities, they are realities already shaping businesses globally. The key question is whether Malaysian SMEs will adapt quickly enough to seize the opportunities they bring. Those who do will thrive while those who delay risk being left behind,” he said. - Bernama
