Overall Score

5.1 in 2015 4.8
0 2.5 5 7.5 10

Key Finding

Malaysia’s overall Index score suggests skilled labour market conditions tightened in 2016. This reflects a growth in wage pressures evident both at the industry level and for high-skill occupations. These wage pressures were boosted by a tightening in the flexibility of the labour market, which adversely impacted labour supply.

Due to the lack of availability of Malaysian structural unemployment data, we did not calculate the country’s Talent Mismatch score and therefore the overall Index score was calculated using six indicators.
Malaysia has been included in the Index for the first time this year. The country’s 2015 score reflects data for that year, and has been included for comparison purposes.

 

BREAKDOWN OF SEVEN INDICATOR SCORES

Scores
0 2.5 5 7.5 10
Education
flexibility
5.4
Labour market
participation
3.7
Labour market
flexibility
6.1
Talent
mismatch
N/A
Overall wage
pressure
5.3
Wage pressure in
high-skill industries
5.2
Wage pressure in
high-skill occupations
4.9

COUNTRY OVERVIEW

View from the ground

Despite the global economic downturn in 2016, Malaysia has emerged fairly resilient to external factors, with stronger GDP growth expected compared to its neighbours. While currency devaluation, increasing taxes and costs have resulted in slower business growth, a fundamental shortage of skilled talent in Malaysia bolsters hiring sentiments in the skilled human capital market, as seen from strong candidate demand and vacancy activity. With tightening labour regulations, talent shortages and a higher cost of living, it is not surprising that the labour market is stressed, placing upward pressure on wages. We expect competition for highly-skilled talent to intensify.

Tom Osborne, Regional Director, Hays Malaysia

Tom Osborne, Regional Director, Hays Malaysia

Country Profile

The Malaysian economy is estimated to have grown by five per cent in 2015, below the six per cent growth in real GDP posted in 2014.

Forecasters expect growth in 2016 and 2017 to be between four and five per cent

Exporters will benefit from the sharp depreciation in the Ringgit last year.

Tom Osborne, Regional Director, Hays Malaysia

Comparison Tool

Downloads