PETALING JAYA: A shortage of skilled workers rather than job cuts are a major drag on Malaysia’s labour market as hiring demand remains firm across several key sectors, say employers.
Malaysian Employers Federation (MEF) president Datuk Dr Syed Hussain Syed Husman said the increase in job losses in April should not be a cause for alarm, but rather reflects growing caution amid global uncertainty and rising costs.
“External challenges such as supply chain disruptions, geopolitical tensions, softer export demand and higher operational costs have made employers, especially in trade-dependent sectors, more conservative in their hiring and investment plans,” he said.
Syed Hussain said many companies are currently focusing on redeploying and reskilling existing staff while optimising headcount and automation, including imposing freeze on hiring.
“Malaysia’s labour market is still relatively resilient.
“Unemployment remains manageable and most employers are trying to retain their current workforce.”
Syed Hussain acknowledged that sustained increases in business and operating costs could eventually threaten micro, small and medium enterprises (MSMEs).
“If not carefully managed, prolonged cost pressures could weaken employers’ ability to create and sustain quality jobs,” he said, adding that policies must balance worker protection with business sustainability and job creation.
While some industries are downsizing their workforce, Syed Hussain noted that others in the E&E, healthcare, logistics, renewable energy, tourism and higher-value manufacturing sectors are still hiring.
He said employers are reporting acute shortages in engineering, digital and AI-related roles, cybersecurity, data analytics, skilled trades, healthcare and supervisory positions.
These employers are facing prolonged vacancies as applicants lack the necessary competencies, technical exposure and workplace readiness, he said.
Syed Hussain said job seekers are increasingly prioritising competitive wages and benefits, flexible work arrangements and work-life balance.
“Many MSMEs are struggling to balance rising employee expectations with business realities and cost constraints, amid a widening gap between salary expectations and productivity levels,” he added.
It was recently reported that Economy Minister Datuk Seri Akmal Nasrullah Mohd Nasir said a total of 7,057 workers were reported to have lost their jobs in April, up 21% from 5,855 in March.
Meanwhile, SME Association of Malaysia president Dr Chin Chee Seong said the job losses last month were driven more by a post-festive slowdown, tighter cash flow and contract expiry rather than large-scale retrenchments.
“After festive periods, business activity usually tapers off and hiring becomes more cautious.
“Part of the increase is due to the expiry of contracts without immediate replacement,” he said.
Weaker demand in construction, agriculture and manufacturing, coupled with higher logistics and input costs, has also dampened hiring and expansion, Chin added.
“Higher costs have already deterred many SMEs from expanding. Yet they still face manpower shortages in agriculture, services, hospitality and healthcare,” he said.
Chin also pointed to reliance on contract labour, foreign worker constraints, low interest in ‘3D’ jobs and a lack of skilled technical talent as persistent structural issues.
