With the impending announcement of Budget 2019, Brian Sim, deputy general manager for Kelly Services, Malaysia, shares his thoughts for the nation’s workforce.
Kelly Services Budget Wishlist
- Incentives towards a more balanced workforce
One of our key expectations from the 2019 budget is measures which would encourage women participation in the Malaysian workforce and work towards creating a more balanced workforce. This will also be crucial to help achieve the target of 30% women on boards of directors among the public listed companies by 2020.
The last budget’s initiative to increase maternity leave from 60 days to 90 days was a welcome step in this direction. Furthermore, the creation of day care centres at all government agencies helped build a strong support system for women returning after maternity. The female labour force participation rate in 2017 was 50.79% overall and has been around that figure for the past 3 years. We are hopeful the upcoming budget will add impetus to bridging the gender gap in the Malaysian workforce moving forward.
- Increasing employability of local labour
As the government begins taking a more conservative approach to the labour industry, we are very interested in seeing measures from the upcoming Budget towards upskilling local labourers. The Human Resources Minister recently suggested that local restaurants should only hire local cooks. Any regulation in this regard could impact the local food and beverage industry, owing to the large foreign workforce it has employed across the country for years.
While the intentions to empower the local labour industry are good, we hope to see substantial incentives that will justify businesses owners’ decision to employ local labour over foreign labour. This is in the context that we see a lot of reliance on Foreign Knowledge Workers specially in technology related fields and they help with the knowledge transfer. We think the upcoming budget should go beyond training and skill development initiatives to empower local labourers and increase their employability.
- Timeline on minimum wages
The recent 5% increase in minimum wages is reflective of the government’s compromise between keeping their pre-election promise and Malaysia’s current economic environment. The increase is certainly small when viewed from an individual’s lens, though the Prime Minister rightly highlighted that it wouldn’t mean anything without an increased buying power.
For context, the minimum wages in Peninsular Malaysia have risen from 900RM in 2012, to 1000RM in 2017 and now stand at RM1050. Similarly, in West Malaysia (Sabah, Sarawak and Labuan) the minimum wages of 800RM in 2012, increased to 920RM in 2017 and stand at 966RM in 2018 after the recent hike.
As the nation regains its fiscal strength, we expect the government to set out a clear plan in the upcoming budget on raising the benchmark on minimum wages. There is a need to outline a timeline for increasing wages over the next 3-5 years to ensure the recent hike is not a one-off occurrence.
- Spurring FDI in key sectors
One of the key things to watch out from the 2019 Budget would be incentives for Foreign Direct Investment, more so towards the Research and Development space. We are confident that the R&D facilities across sectors will thrive on the back of fiscal incentives and spur our knowledge economy.
We are also keen to know the government’s vision for FDI in the shared services sector, which includes the likes of BPOs that primarily attract foreign investment. As the reach of this sector is quite wide, from Human Resources, Financing as well as IT, boosting foreign direct investment would simultaneously generate more jobs for Malaysians.
- Boosting graduate employability
Human capital development initiatives is a key focus area for the new government and would need to be backed by incentives in the upcoming budget. This will be crucial in achieving Education Ministry’s target of 85% employability for skilled graduates in Malaysia.
There continues to be a mismatch between the skills of graduates and the needs of employers today. While TVET as well as STEM (Science, Technology Engineering and Maths) graduates are in huge demand around the world, lack of soft skills including creativity, communication and critical thinking are among the main reasons for unemployed graduates. The youth unemployment rate in 2017 was at 10.8% and has been around that figure since 2015. The budget needs to address this with initiatives that will empower our talent pool and help employers build a strong pipeline of Malaysian graduates that can rightfully address the talent shortage in key sectors.