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Saturday, February 12, 2011

The scramble for skills

By Jagdev Singh Sidhu

The plan to woo and retain Malaysian talent has steadfastly. But there are stumbling blocks


Who doesn't have a relative or friend who has packed up and left Malaysia for “greener” pastures? And who doesn't know of someone who has plans or aspirations to do exactly that? Chances are, most of us do.

It would seem that over the years, the compulsion to leave the country in search of opportunities has grown beyond pure economics. Dissatisfaction over the quality of education, personal safety and for some, the political future of the country where sabre-rattling seems to have become common place have served as push factors for many Malaysians to pack their bags and leave the country.

While it could have been relatively easier to shrug off the consequences of that in the past, it is a “luxury” the country can ill-afford today, in this era of heightened competition where economies are scrambling to woo the best to stay ahead of the game and for many, to survive and prosper.

Malaysia has to retain and attract top talent to climb the global per capita income ladder.
»It is no longer a question of salary but the whole environment «TAN SRI RAMON NAVARATNAM

“We have the right ideas. Unless we implement those fast, we will create a credibility gap,'' says ASLI Centre of Public Policy Studies chairman Tan Sri Ramon Navaratnam, adding that “it is no longer a question of salary but the whole environment from social to the way of life that must be looked at holistically.”

The unique Malaysian worker

There is a commonly held belief that the Malaysian employee is able to assimilate and adapt well to any environment. In this context, environment would mean country. Indeed, that's a valuable trait to possess. That may partly stem from the multi-cultural nature of the Malaysian society which has carved a solid bed for the mingling among different races, religions and cultures.

Another oft-described trait of Malaysians, as highlighted by foreign employers, is that they are smart and hard working and this goes beyond the fact that the country has a large pool of straight-A scorers in public examinations. It has a great deal more to do with the employability of Malaysians.

Hence, every time a Malaysian goes abroad to study, the country faces the threat of them not returning to their country.

“The existing pool of 700,000 Malaysians working overseas is an indication of the capabilities of Malaysians overseas,” says Kelly Services (Malaysia) Sdn Bhd managing director Melissa Norman.

But what makes the Malaysian worker unique is also their linguistic capability.

“Malaysian talent is on par with regional and even global talent, especially those who have a good command of English as well as an additional language such as Mandarin or Bahasa Malaysia. Going forward, there is a need to improve the standard of the English Language and the technical competencies of the Malaysian labour force in order to remain competitive,'' says Randstad regional director of Singapore & Malaysia Karin Clarke.

But the country that has benefited the most from migrating Malaysians is Singapore. As Singapore is a high income economy Malaysia aspires to become, the island republic has attracted 300,000 Malaysians, a large number of whom comprise skilled talent.
»700,000 Malaysians are working overseas« MELISSA NORMAN

A mammoth task
An agency has now been set up to closely scrutinise this dilemma and fill the gap. Indeed, the newly-set up Talent Corporation Malaysia Bhd appears to have a Herculean task ahead.

The agency is headed by Johan Mahmood Merican and his mandate is to overcome the talent shortage situation in Malaysia. Naturally, sceptics abound as this is not the first time the administration has talked about the need to woo Malaysians from abroad and reverse the brain drain. Instead, over that period, the drain could have become more pronounced.

“We definitely see a wider pool of candidates being more open to looking at what is on offer, particularly in the educated professional fields and the sectors that are most highly in demand (abroad),'' says Clarke.

Sadly for Talent Corp, there is no single magic bullet to stem the tide and grow the talent pool in the country. The weak links are aplenty but fortunately, there is the appeal of promise - that the Government, this time around, has the political will to make the necessary changes, armed with a massive handbook called the Economic Transformation Programme.

According to Johan, Talent Corp has a three-pronged approach - analyse the Malaysian diaspora and see how best they can contribute to nation building, either by coming home or from where they are.

The other is to woo foreign talent and sort out the hurdles of them settling here while the third is to put a lid on the outflow of human capital.

In the process, Talent Corp will need to engage companies and businesses to ascertain what is needed to widen the talent pool and how government policies and procedures can be streamlined towards this end.
“We aspire to be a bridge between industry's requirement and the Government,'' says Johan.

Talent Corp started with a launch grant of RM30mil from the Government and Johan feels that its maximum staff strength should be no more than 50. Of course, he has been given a set of key performance indicators to match up to.

“I need to address the talent need and address the gap,” says Johan, who started on this journey on the first day of the new year.

“The bulk of my time has been spent engaging with stakeholders...there are a lot of people in the country who are passionate and knowledgeable. Having a practical knowledge of what's happening in the country and a sense of what needs to be done is important,'' he says.

Up the value chain

At heart of what Talent Corp wants to achieve is fulfilling the labour requirements of the ETP. The ETP is envisaged to create 3.3 million new jobs but many of those jobs are higher skills in nature.
»Malaysian talent is on par with regional and even global talent«KARIN CLARKE

The announcement in January where 35,000 new jobs would be generated from new investments totalling RM67bil shows that labour intensive jobs are on the wane and higher skills are in vogue.

As a country moves up the value chain towards a high income nation, which is what the ETP is meant to do, the type of skills required will be different but the freedom of labour movement, and the lack of soft skills, is causing a lot of problems for employers of high skilled labour.

“Malaysia has a high graduate population. However, many lack the soft skills deemed necessary for many high skilled job placements.

“We hope that the initiation of the Talent Corporation will assist in addressing some of these issues. Human capital is an asset to our economic growth and an importance has to be placed on proactively developing our workforce,” says Norman.

According to Kelly Services, the top five skills in demand are communication skills, problem solving, ability to participate in decision making, people management and strategic thinking.

“Overcoming these skills shortage will include investing in existing talent to ensure that they are well-versed in not only the theoretical knowledge but also the soft skills,'' says Norman.

She says meeting labour demands will depend on the collaboration of different factions.

“High salaries and attractive benefits are not the only factors that will assist in attracting the right talent. As Malaysia has a significant ageing workforce and a growing young population, a multi-generational strategy is crucial,” she adds.

To ensure Malaysian human capital is capable of meeting the standards and demands of the workforce, Norman says educational institutions need to be equipped with the tools and capabilities to teach students relevant in-demand skills while fresh graduates need to be nurtured to ensure they meet the demand of future employers through work placements and internships.

The Talent crunch

Malaysia is a country that's just a nudge away from full employment.

But possessing a university degree is no longer a guarantee for employment as the scrolls are not always relevant to the skills needed.

Kelly Services notes that every year, 250,000 Malaysians complete their studies at higher education institutions locally and overseas.

“There are now about 25 private universities and 20 university colleges in Malaysia, and student enrolment in private higher education institutions has increased by over 54% within a short span of time from 2005 to 2008,'' says Norman.

“As globalisation of work and workers continues, so will the need for higher education institutions to re-examine required skills in the new knowledge-based economy and how they can produce more thinking' students, who are competitive, have the relevant technical and behavioral competencies.”

With competition for skilled IT talent in Malaysia at an all time high, especially in IT outsourcing and shared ervices, there is a shortage in that sector; Malaysia's shared services and outsourcing SSO sector created 32,500 jobs in 2007 and is growing at about 30% per annum and has the potential to hit RM6.4bil by 2012.

The rollout of high speed broadband has provided strong demand for talent in both the cellular and broadband segments in the telecommunications industry. In engineering, new development projects and industrial parks such as the Tanjung Agas Industrial Park, the Northern and Southern corridors have created job opportunities across the country.

“Within the commercial and business sectors, candidates with strength in market research, product and brand knowledge are also in demand,'' says Norman. “These are sectors that face a constant demand for talent with specialised skill-sets and experience.”

Even though more than quarter of a million people graduate from institutions of higher learning annually, Clarke says there is still a huge number of jobs that are not filled.

»At such levels, Singapore is 21% cheaper than Malaysia« 

“Latest statistics reveal that there are 100,000 jobs available but no graduate takers,'' she says.
The skill crunch is particularly acute in major hubs.

Three most notable markets where skill shortage persists, according to Randstad 2010's World of Work report, are KL, for white collar professionals, Penang for specialists in the semiconductor and manufacturing sectors and Johor Baru, particularly for infrastructure roles, such as healthcare and education.

The low down

Wages are often a strong cause for labour migration. Malaysian Employers Federation executive director Shamsuddin Bardan however, disagrees that wages in Malaysia are too low citing that even a foreign worker, based on MEF estimates, should be earning a take home pay of RM1,500 a month based on the amount of remittances from Malaysia.

Another factor is productivity. Shamsuddin points out that a worker in Singapore is paid 2.5 to three times that of an equivalent skill in Malaysia but their productivity is 3.8 times higher than a Malaysian worker.
“At such levels, Singapore is 21% cheaper than Malaysia,'' he notes.

But the relative static pace of wage inflation has been a source of frustration for many, and is high up in the reasons for departure.

Malaysia has yet to experience a significant change in wages and there are numbers to prove it. The country's average annual salary increase has been relatively small at 2% to 6% over the past decade.

The Kelly Employment Outlook and Salary Guide 2010/11 indicated a 4% to 5% increase in salaries across all sectors.

“There are calls to implement a minimum wage system as the Human Resource Ministry revealed that 34% of our workforce earns below the national poverty line of RM720,” she adds.

Clarke points out that wages in Malaysia are reasonably consistent based on individual currencies with other countries in the region but the challenge for Malaysia is that there are countries in the region that have stronger currencies.

“For example, a Malaysia-based Priority banker earns the same in ringgit as a Singapore priority banker earns in Singapore dollars. However the currency conversion would see the Singapore banker earn over double that which they would in Malaysia,'' she says.

That is yet, another factor that could keep Malaysian talents rooted abroad.

Related Stories:
Malaysia's got talent
How to retain talents
Blueprint needed
Education and security among reasons

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