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Malaysian Human Resources
Malaysia practices a system of government in which monarch (Yang di-Pertuan Agong) acts as head of state. About half of the population are Malays while other ethnic groups such as Chinese, Indians and several other minorities made up the remaining of the population. Bahasa Melayu is the official spoken and written language in the country. However, there is also a sizable of population conversing in other languages and dialects such as English, Chinese dialects and Tamil.
Based on the latest statistics, Malaysia recorded 2.8% GDP losses in 2009. Some believed that it was a result from the global financial crisis that caused the export performance to lose momentum. While generally the human resources market were not affected in Malaysia, some companies still retrenched last year to reduce the expenditures.
To begin with, human resources are one of the most valuable assets for a company and a country to spur economic growth. Without human resources, the country is doomed. But of course, a country must be able to manage and turn the knowledge workers into useful resources to contribute to economy and social development.
Generally, Malaysia has a work force of approximately 9.6 million people. So far, trade and tourism remain the largest employment sectors that account up to 28% of work force. On another note, manufacturing employs around 27% and the production produces 44% for the country’s GDP. Agricultural employs 16% while service sector employs only 10% but contribute far less for Malaysia’s GDP. The unemployment rate has increased from 3.3% in 2008 to 5% last year.
Surprisingly, even though there are around 9.6 million people in the workforce, only 10% of the figure are members of labour union. Overall, Malaysian Trade Union Congress (MTUC) comprises a total of 23 unions and 500,000 workers. MTUC , a national trade union centre has poor relations with the government. Thus, the unions have little say in any Human Resource policies formed in Malaysia.
The country’s restrictive law prohibits any demonstration and strikes. In that case, the Ministry of Human Resources plays an important role to facilitate and discuss disputes with MTUC. This national trade union centre is associated with International Trade Union Conference.
Even though there are over 9 million people in the workforce, several fields such as information technology is facing a shortage of workers between 30,000 and 35,000. Therefore, demand for talented and skilled IT graduates remained high despite the global financial crisis in 2009. Fortunately, the number of engineers and high-technology workers are sufficient to improve the country’s economy and social development.
Since the country is facing a serious shortage in IT skilled workers, a number of companies recruited and hired foreign workers particularly those from India. Realizing that the country should not be too dependent on foreign workers, government has introduced an incentive program in 2001 to encourage more Malaysians living overseas to return and contribute to the country.
The program was aimed to recruit workers from finance, IT, healthcare, accounting and science and technology fields. Sadly, these Malaysians refused to even consider this option as they can earn more in foreign countries. Besides skilled workers, statistics revealed that Malaysian companies are also recruiting low skilled workers by offering low paying jobs.
Therefore, we have seen large number of foreign labourers from Indonesia, Philippines, Myanmar and Vietnam entering our country. The positions offered to these labourers are usually refused by the locals due to low wage. As foreign labourers flood into the country, government have introduced new policies to curb the trend by encouraging more locals to join in these industries.
Human Resource Policies in Malaysia
A worker should understand the HR policies as it concerns their rights to apply for holiday, maternity and sick leave. Besides that, other more prominent and important policies are the termination and recruitment policies.
According to termination policies, organizations and corporations must issue an advanced notice to employees before termination. On the other hand, employers do have the right to fire and terminate an employee’s service due to misconduct or breach of contract.
Meanwhile recruitment policies stressed that for particular positions, employers can only recruit Malay citizens. When an employer decides to hire a worker, both parties must sign an agreement or contract that charts out terms and rules, breach of contract and other minor details. Local companies can only recruit foreign skilled workers if they failed to hire local skilled workers.
Perhaps, one of the most important policies is the pension system under Employee’s Provident Fund (EPF). Under the system, employer and employees must contribute a small amount pre-determined earlier on a monthly basis to the employee’s account.
Hence, the employee is entitled to the pension funds after retirement. But bear in mind that only employees that have contributed to EPF for at least five years are entitled to the funds. Several other policies are enacted to protect female employees such as anti-discrimination and anti-harassment laws.
Ministry of Human Resources
Ministry of Human Resources (MOHR) plays an important role to formulate relevant policies in ensuring the welfare of workers as well as employers. Among some of MOHR’s roles are to implement the labour policies and laws enacted in order to create an effective and conducive working environment; enforce occupational safety and health policies to ensure a safe work environment for all; constantly monitor activities of trade union to protect security interest; control and handle international relations and technical collaboration in Labour Management fields; and most importantly, to create job opportunities and place the right man in the right place.
Most of the policies and laws formulated are meant to adjust to the constant changes and overcome obstacles in labour environment. MOHR has identified a number of serious challenges such as globalization and to remain competitive in the market. Besides that, the ministry also expressed that it is fairly important to create a dynamic labour market, strike a balance between security and flexibility in HR management and to create a conducive working environment to bring out the best in workers.