High Skills Workers Issues

1
The Shortage of High-Skilled Worker in the
High-Tech Industries of Malaysia
2
Current Situation

• In 2020, the Ministry of Human Resources
  estimated that Malaysia faced a shortage of
  around 1.5 million high-skilled workers, with
  particular shortages in the areas of engineering,
  technology, and science.
• Survey conducted by the Federation of Malaysian
  Manufacturers (FMM) in 2019 found that 60 of
  manufacturers were facing a shortage of skilled
  workers.
• The shortage of skilled workers can also have a
  significant impact on key sectors of the economy
  by limiting the country's economic growth
  potential, as employers struggle to find workers
  with the skills they need to innovate and expand.
• The shortage of skilled workers in Malaysia has
  led to a high reliance on low-skilled foreign
  workers. This can negatively impact the economy,
  as low-skilled foreign workers often do not
  contribute significantly to the country's
  economic growth.

Share of Job Creation by Skill Level ()
Share of Job Creation by Citizenship ()
An increasing share of job creation is taken up
by low-skilled workers
In the year 2015-2016, a large share of jobs
created went to foreigners
01
Source Department of Statistics, Malaysia
3
Current Situation

• Middle-Income Trap - Malaysias transition to a
  high-income and developed nation is at risk, as
  long as employers are still engaged in a race to
  the bottom in relation to labour costs and are
  unwilling to pay more. Employment of cheaper
  foreign workers vis-à-vis locals allows employers
  to keep wages low.
• Low Productivity - the prevalence of the low-cost
  production model and high dependence on
  low-skilled foreign workers discourages
  productivity enhancements, depresses wages, and
  encourages the creation of low-skilled jobs. This
  is evidenced by the fact that industries that
  employ a higher share of low-skilled foreign
  workers tend to have lower productivity levels,
  relying on longer working hours to produce
  output.

Productivity and Median Monthly Salaries and
Wages by Industry, 2019
Median Monthly Salary (RM) of Firms by
Occupations and Nationality Employment of low
wage foreign workers allow employers to keep
salaries low
01
Source Bank Negara Malaysia estimates using data
from Labour Productivity Statistics, Salaries
Wages Survey Report, and Labour Force Survey
Report published by the Department of Statistics,
Malaysia
Source National Employment Returns 2016
4
The Relevant Policy
No. Policy Description
1. Malaysia Education Blueprint This policy focuses on improving the quality and relevance of education and aims to produce a highly skilled workforce by enhancing the curriculum, promoting technical and vocational education, and encouraging lifelong learning.
2 National Policy on Science, Technology, and Innovation (NPSTI) This policy aims to develop a strong knowledge-based economy by promoting research and development, innovation, and technology commercialization. It emphasizes the importance of high-skilled human capital in driving Malaysia's technological advancements.
3 Malaysia My Second Home (MM2H) Program This policy facilitates the entry of high-skilled foreign talents and retirees to Malaysia by offering long-term residence visas. It aims to attract and retain individuals with specialized skills and expertise to contribute to the country's economic growth.
4 Human Resources Development Fund This policy focuses on upskilling and reskilling the local workforce by providing financial incentives and training programs to enhance their skills and competencies. It supports initiatives to address the shortage of high-skilled workers in various industries, including the high-tech sector.
5 Malaysia Digital Economy Blueprint This policy outlines the government's vision and strategies for developing Malaysia's digital economy. It emphasizes the need for a skilled workforce in areas such as cybersecurity, data analytics, software development, and digital marketing.
6 National Policy on Industry 4.0 This policy focuses on advancing Malaysia's manufacturing sector through the adoption of Industry 4.0 technologies, such as automation, robotics, and artificial intelligence. It aims to develop a highly skilled workforce capable of driving digital transformation in industries.
5
Conclusion

• In the past, the Malaysian government adopted the
  traditional functions of centralization and the
  supply of basic human resources in the strategy
  of human resources development. Facing the
  popularization of basic education, it can no
  longer meet the professional requirements of the
  industry for technical talents.
• Policy makers play a pivotal role in shaping the
  future of the high-tech industries and ensuring
  the availability of a skilled workforce.
  Immediate attention to this issue is crucial for
  several reasons
• Significant impediments to growth and innovation
  lost of competitiveness
• Affect the economy - hampers productivity and
  limits the country's ability to attract foreign
  investments
• Brain drain phenomenon may exacerbate lost of
  talent
• The shortage of high-skilled workers in
  Malaysia's high-tech industries demands immediate
  attention from policymakers. Their decisions and
  actions in formulating and implementing
  appropriate policies will determine the future
  competitiveness and sustainability of the
  high-tech sector. By recognizing the urgency of
  the issue and taking proactive steps,
  policymakers can pave the way for a skilled
  workforce, drive innovation, and propel
  Malaysia's high-tech industries to new heights of
  success.

6
THANK YOU