Outsourcing Malaysia calls for more support for local GBS sector

More support: Outsourcing Malaysia chairman Cheah Kok Hoong believes that GBS is a new driver of business and investments for Malaysia.

Ahead of the tabling of Budget 2016 on Oct 21, Outsourcing Malaysia (OM) – the chapter under the National ICT Association of Malaysia (Pikom) – today released three recommendations which it hopes will further strengthen Malaysia’s Global Business Services sector.

OM says that the recommendations are aimed at boosting local talent and supporting local GBS companies. GBS was formerly known as the Shared Services and Outsourcing Industry.

According to Outsourcing Malaysia’s GBS Business Services Outlook Report, the sector is poised to record growth of 10-15% for the next five years, creating more than 6,000 jobs in 2016. 

The report also found that the industry has surpassed the 85,000 mark for jobs created, which was the target for 2017.

“A growing number of companies worldwide are using GBS firms in Malaysia to streamline operations and achieve better quality and cost efficiency. GBS is a new driver of business and investments for Malaysia,” said Outsourcing Malaysia chairman Cheah Kok Hoong.

“Yet, we face an acute talent shortage, which will impact our potential to be a global player. As such, OM urges the government to consider the following under its budgetary plans for the coming year.”

Firstly, OM recommends that funds be allocated for joint upskilling programmes involving collaboration with academia, industry and the government to develop industry ready talents for the GBS industry, in line with the 11th Malaysia Plan’s focus in Accelerating Human Capital Development.

This is because the 2014 Labour Force Survey report by the Department of Statistics released in June 2014 also revealed that one third (31%) of those unemployed in Malaysia had a tertiary education, translating to about 130,000 persons.

Also, the Ministry of Education statistics show close to 25% of local graduates were unemployed (51,835 out of 202,328 graduates) according to OM.

OM says its close working relationship with public universities can be tapped to ensure local graduates can secure jobs and develop industry relevant skills in a fast-growing industry. 

It further recommends the creation of an industry oriented global GBS institute with a government investment of RM50mil.

Secondly, OM calls for more support for local GBS companies, in line with the 11th Malaysia Plan’s focus on the transformation of the services sector.

To that end, OM recommends that a specific loan or equity scheme be allocated for the development of local GBS companies as working capital or for mergers and acquisitions. 

In addition, a creation of a single point of funding and facilitation for the expansion of local firms is recommended with an expansion fund of US$100mil (RM419.25mil).

Lastly, OM recommends for more local GBS companies to be given opportunities to service the outsourced functions of government bodies such as ICT, human resources, customer contact functions.The industry body said that it hopes these outsourced functions will remain in Malaysia.


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