One way to attract Malaysian talent abroad to return home is to increase the competitiveness of the local labor market, says Universiti Sains Malaysia Assoc economist Prof Dr Saidatulakmal Mohd.
This includes more competitive wages, supportive work environments and better career development opportunities, she explains.
Noting that the brain drain in Malaysia is a long-standing problem, Prof. Assoc Saidatulakmal sees a lack of opportunities in Malaysia as a key issue.
“The lack of opportunities includes limited employment opportunities for professionals such as doctors and engineers, as well as uncompetitive salaries for highly skilled professions and less attractive benefits provided by companies,” she says. .
She points out that the 2011 World Bank Malaysia Economic Monitor report, which focused on the problem of brain drain in Malaysia, found that wage incentives and benefits for many high-skilled sectors in the country are less attractive than those of many developed countries.
More than a decade later, little has changed and this is further compounded by slow, if not stagnant, wage growth over the years.
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We can have a policy of restructuring salary schemes to offer more attractive salaries, commensurate with qualifications and experience, as well as better career prospects, underlines Assoc Prof Saidatulakmal.
“Of course, this requires a high commitment from the private sector, and a restructuring of wages could lead to a series of market failures such as rising prices and an increase in the cost of living, especially in urban areas. High labor costs could also increase a company’s operating costs, which could affect investments,” she concedes.
Salary restructuring, if needed, should be done gradually and could start with new graduates, says Prof Assoc Saidatulakmal.
“New graduates, especially those who have studied abroad, must be motivated to return to the country and be attracted by the salary package offered by the labor market. This effort must be accompanied by a supportive work environment, such as better employment opportunities, regardless of race.
This is important not only to attract Malaysian talent but also to deter local talent from leaving, she points out.
Jason Loh Seong Wei, social, legal and human rights manager at Emir Research, agrees that Malaysia’s brain drain problem is compounded by structural issues, with wages and career development opportunities predominating. .
Quoting from a study by Emir Research titled “Analysis of the Brain Drain Pandemic in Malaysia”, he claims that the brain drain in Malaysia has been increasing at an average rate of 6% per year over the past decades. The think tank estimates that around two million Malaysians live and work abroad, including some 500,000 highly skilled professionals.
According to Loh, Malaysians are migrating to countries such as Australia, New Zealand, Japan, South Korea and the United States in search of better paying jobs due to the exchange rate and the parity of the purchasing power.
“For example, they prefer to work as fruit pickers and farm laborers because the amount of money they can earn is enough for them to buy a modest house – unlike in Malaysia, where the minimum wage is barely enough to support them. needs, especially in urban areas.
“A salary of RM2,000 as a security guard, which is still below the poverty line (poverty line income) of RM2,208, is simply not enough to survive in an urban Malaysian environment.
“Someone earning 2,800 Australian dollars (RM8,500) a month working on an Australian farm could live quite comfortably and send half their salary back to Malaysia, even after factoring in rent and taxes,” Loh explains.
Create more jobs
Dr. Yeah Kim Leng, director of the economic studies program at Sunway University’s Jeffrey Cheah Institute, says that in addition to depressed wages and a lack of opportunities for career advancement and entrepreneurship, there are other pull and push factors.
“The investment and business start-up environment needs to be significantly improved to create high-quality, well-paying jobs to absorb the growing number of university, technical and professional graduates in various disciplines of science, technology and technology. engineering, technology, business and finance.
“Other economies in the region and in the industrialized world are attracting industry-ready talent with well-paying jobs and prospects for career advancement in addition to the lure of higher living standards, as these countries are generally more developed”, he adds.
Agreeing, Prof Assoc Saidatulakmal says we also need to diversify the Malaysian economy to move away from traditional jobs and increase opportunities for high-end, creative and innovative industries.
“This reform would lead to better career prospects in the national labor market. Currently, graduates whose area of expertise is different from that required by traditional jobs are either constrained by limited career prospects or unavailable positions that force them to seek employment elsewhere where their talents could be put to better use,” she says.
“Thus, there is a need to pump and attract investment in new areas to accelerate Industry 4.0, Society 5.0, AI and other creative industries to attract or retain talent at home.
“It has been reported that Malaysia’s R&D contribution to GDP is low, around 1%, compared to other countries – South Korea’s is 5% if I’m not mistaken. Therefore, there are many opportunities to accelerate this sector.
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Fundamentally, we need to prepare our education system to produce graduates relevant to high-end, creative and innovative industries, she says.
“The talent shortages we are experiencing need to be replaced with locally produced skilled talent. But local talent should get similar incentives (to returning ones).
To achieve this, the education sector, especially higher education institutions, must be prepared to produce more industry-relevant graduates, have adequate facilities for research and development, and continue to be relevant. in the face of the changing nature of the economy.
Apart from the lack of opportunities, the perceived increase in economic, political and political uncertainties facing the country could also lead to a talent drain, says Dr Yeah.
“To stem the drain of talent due to real or perceived diminishing growth prospects and attractiveness of the country, the 12th Malaysia Plan and the various sector plans and master plans focusing on inclusiveness, sustainability and prosperity for all need to be implemented with greater urgency and commitment from the government in collaboration with the private sector,” notes Yeah.
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He adds that the shortage of skilled labor and talent in Malaysia is also complicating the issues, hampering the transformation into a high value-added economy while stifling innovation.
Loh argues that Malaysians are still trapped in a macro-cultural framework where “knowing who” instead of “knowing how” is the dominant practice.
“Having the right cables and the right connections with political and business elites can always be the deciding factor that seals the deal – whether it’s a promotion or a contract,” he says.
Such practices, he says, tend to marginalize talented Malaysians who do not have connections, depriving them of opportunities and prompting some to emigrate.
“All Malaysians should feel they have a place in the sun – across the spectrum – from their income share as a percentage of GDP to career opportunities, whether in the private or public sector,” he says. .
He adds that, crucially, “Tackling and overcoming corruption as a way of life is an absolute necessity to promote a high-wage economy or to ensure that we escape the middle-income trap.”
Loh thinks reversing the brain drain will take political will.
“To address and overcome the problem, we must first create the necessary preconditions – that is, the political and social systems and cultures that are conducive,” he says, adding that another precondition is a social and political environment that does not politicize race and religion.
As he says, highly skilled Malaysian workers and professionals have emigrated overseas most likely due to a desire to live more freely from social and political pressure and expected ‘norms’.
“Increasingly, Malaysian professionals are the exodus of those heading for greener pastures,” he notes.
Professor Assoc Saidatulakmal also believes that in addition to strengthening labor market fundamentals, it is also important to stabilize socio-political and socio-economic imbalances in the economy.
“Feelings and perceptions that corruption, abuse of power, nepotism and elitism have widened economic imbalances between rural and urban areas and deepened social divides have reduced interest in returning home and contributing in the country.
“These talents feel that the economy and society are driven more by power and greed than by social and economic development.
“Although the economy has seen liberalization since the 1990s, bureaucracy and lack of transparency limit business opportunities,” she notes.