KUALA LUMPUR – In response to concerns over Malaysia’s skilled talent outflow, which is estimated to cost the economy up to 0.4% of its GDP annually, the Government has announced a series of structural reforms, the Human Resources Ministry (Kesuma) said.
In a statement, the ministry said the reforms are designed to address wage disparities, improve job quality, and align workforce skills with market demands.
The National Wages Consultative Council (NWCC), under Kesuma, has identified economic factors, particularly income disparities, as the key drivers behind the brain drain.
Research by TalentCorp highlights that 94.5% of Malaysians working in Singapore are lured by higher wages, while 88.8% report dissatisfaction with wages that do not reflect their skill levels.
Furthermore, cost-of-living pressures, with Singapore’s lower working hours to meet basic needs, have compounded the issue.
To counteract these trends, the Government has ramped up the Progressive Wage Policy (Dasar Gaji Progresif), a key reform aimed at linking wage growth to productivity, skills development, and career progression.
“The Progressive Wage Policy is designed to ensure that wages grow in line with career progression, providing a more competitive and resilient labour market,”
This move comes alongside other initiatives such as MyMahir, which connects workers with targeted training aligned with real hiring needs across 18 priority sectors. Under MyMahir, participants can secure starting salaries as high as RM7,500.
While the RM1,700 minimum wage implemented in 2024 addressed basic subsistence, KESUMA acknowledges that minimum wages alone are insufficient to retain skilled workers.
With wage compression emerging as a significant challenge, the Government’s focus on structured wage progression aims to provide a more competitive and resilient labour market.
As Malaysia continues to rise in global competitiveness rankings, with higher positions in the IMD World Talent and Competitiveness indices, the Government is confident that these reforms will stem the tide of talent outflow and contribute to long-term economic growth. – January 14, 2025