With increasing digitization trends and government initiatives focusing on workforce development, the labour market is evolving rapidly in Malaysia. That’s why HR professionals need to stay at the top of their game by implementing the best HR practices in Malaysia to ensure efficiency and business growth.
The Malaysian government is taking active efforts to maintain the prevailing stability of the labour market and an incredibly low unemployment rate of 3.2%.
Measures are also being taken to prioritise workers protection and professional development to keep up with the global workforce trends. That’s why, with the unveiling of the National HR Policy Framework in May 2024, businesses are expected to navigate multiple changes in the oncoming years.
5 Best HR Practices in Malaysia
On the organizational level, businesses must give precedence to policies that can help them achieve these government mandated goals. Here are some of the best HR practices that can help Malaysian businesses of all sizes, from small businesses to global enterprises stay compliant, while also ensuring organizational success.
1. Adopting Digitization
Digitization trends, especially in HR Tech, has been a recurring topic of discussion globally in recent times. As organizations begin to realize the advantages of investing in HRMS software, the HR tech industry is progressing rapidly. With digitization efforts being a major part of economic development plans, the Malaysian government is encouraging both private and public sector to digitize their operations.
By digitizing HR processes, companies can enhance the efficiency of data management and payroll processing all the while reducing administrative costs. Implementing comprehensive HRMS software that come equipped with analytics features can also help business with workforce insights that can facilitate professional development and employee engagement strategies.
2. Offering Flexible Work Timings
According to a survey, most Malaysian employees,(almost 81%), revealed that they’d prefer working remotely over in-office roles. However, a large number of companies are actively pursuing in-office employment policies. This can greatly limit the talent pool when it comes to recruitment and increase turnover rates. In fact, 40% of Malaysian employees, particularly millennials and Gen Z, are willing to quit if work timings aren’t flexible.
By offering flexible work timings, companies not only increase their chances of finding better talent matches, but also enjoy better productivity rates. Employees also consider staying for longer in companies that keeps their preferences in consideration. In a survey, 86% of employees have reported that they wouldn’t mind returning to the office given they can still maintain a degree of flexibility by working from home for two days a week.
Besides, it was also noted that 76% of employees following a hybrid work model have the highest levels of engagement and would be more likely to stay in the company for over three years.
3. Promoting Work Life Balance
In a survey by Remote, it was revealed that among 60 high-GDP countries, Malaysia ranks second last with a work-life balance score of 27.51 out of 100. Most Malaysians work nearly 15 hours more than their designated work hours every week. It’s because of this, that remote work trends during the pandemic became significantly popular and employees still prefer a hybrid to flexible work model, 4 years later.
Companies enforcing policies that promote a better work-life balance is preferred by most employees. This serves as one of the most important non-monetary benefits that employers can offer to retain employees and attract new talent.
4. Promoting Learning & Development
Despite high employment rates, Malaysia still experiences a shortage in skilled labour, as only 29.6%of the workforce is considered skilled. In the Twelfth Malaysia Plan, the government outlined a set of policies for strengthening the country’s workforce for adaptability and sustainability. One of the ways to do that was to develop existing talent to increase the amount of skilled labour to 35% of the workforce by 2030.
While the government has already allocated RM 2.6 billionin resources to retrain and upskill workers in various sectors of the economy, big corporations have also hopped aboard the initiative. For instance, Google has taken several steps like launching the ‘Mahir Digital Bersama Programme’ and donating to schemes like the Asia Foundation’s ‘Go Digital ASEAN’ to help workers pick up essential digital literacy skills.
Upskilling and reskilling present employees can benefit business growth in the long run. Utilizing HR tech like performance management and learning management software can greatly aid companies in these initiatives.
Besides, when companies make efforts to align their employees’ professional development with long term business growth, it also fosters loyalty. Since employees feel that their employers are invested in their professional growth, they’d be more inclined to stay with the company.
5. Enhancing Employee Engagement
In the 2024, employee engagement rates in Malaysia fell from 82% in 2023 to 76%. Among new hires, engagement rates are even lower at 68%. Disengaged employees were costing the economy upwards of RM 26.097 billion, as of 2020, when engagement rates were higher. Presently the number would be much higher, and it will continue to grow unless companies make employee engagement a priority.
Businesses can invest in HR tech that facilitates better employee engagement through performance tracking, chatbots and easier operations. Employee engagement software with features like internal forums to share birthday wishes, accomplishments, appreciation and congratulatory wishes can also be used to keep employees motivated.
Summing Up
The Malaysian labour market is going through significant transformations, with evolving employee expectations and government initiatives. By adopting HR tech like a comprehensive HRMS software that manages everything from attendance tracking to payroll, companies can make it easier for HR teams to implement these best practices and prompt business growth.
Which one of these best practices would you consider implementing for your company? Let us know in the comments.
