in 2017


Key drivers

Overall wage pressure (4.7)

Accelerating wage growth is the biggest contributor to Malaysia’s higher score this year.



Wage pressure in high-skill occupations (3.9)

Slower wage growth in higher-skilled occupations has led to a narrower occupational wage gap. This reduces pressure on firms seeking highly-skilled staff.

Education flexibility (4.8)

A rise in the proportion of the Malaysian population who hold a degree should mean employers have a larger pool of skilled labour to recruit from.


Education flexibility


Labour market participation


Labour market flexibility


Talent mismatch


Overall wage pressure


Wage pressure in high-skill industries


Wage pressure in high-skill occupation


Tom Osborne

Regional Director, Hays Malaysia

View from the Ground

In 2017, we saw a strong job market with nearly all sectors experiencing a fundamental shortage of skilled talent throughout the country. Candidates have many options when looking for new jobs; salary and benefits along with the work culture of the business being key factors when deciding to join new businesses. Employers are more willing to give dramatic pay rises to new employees of between 10-20%, compared to the yearly increments they are willing to give to their current staff members, usually between 6-10%. This is a major factor driving a buoyant jobs market.

Tom Osborne, Regional Director, Hays Malaysia

COUNTRY profile

Malaysian GDP saw its fastest growth in three years in 2017, rising by nearly 6%. The IMF forecast this will slow slightly in 2018 and 2019 but remain above 5%.

The rapid growth in output supports increased demand for labour. The unemployment rate, low by international standards, continues to edge down very slowly reaching just over 3%. Wage growth in the manufacturing sector has been running at over 9% for much of the past year.

Looking to the longer term, the World Bank believes that Malaysia’s education system is insufficient to support a high-income economy.

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