The financial sector is an integral component of the Malaysian economy, and key governmental and regulatory agencies have an eye to expand this important sector in the future. The Financial Services NKEA (National Key Economic Area) is aiming for the financial services industry to contribute RM 180.2 billion to the country’s GNI and create 275,400 new jobs by 2020. Additionally, as part of an Economic Transformation Program, Malaysia aims to become the international hub for Islamic finance, which is expected to create 12,000 new jobs.
Due to this growth, there remains a critical demand for skilled labor in the financial sector. In 2012, 323,000 workers were employed in the finance and insurance industries, yet during the same period, there were over 62,000 vacancies reported. In-demand financial jobs in the country include finance managers, senior accountants, auditors, and credit control managers. Other areas of focus expected to create the most jobs are in equities, insurance and asset management.
To address some of these gaps, in 2013, the government increased the retirement age for Malaysian workers to 60 from the age of 55, which was previously set by most employers. However, due to this measure, unemployment could rise 0.3 percent (from the current 3.7 percent to above the significant 4 percent threshold). Despite the increased unemployment, keeping highly skilled talent within the country has proved to be difficult for the Malaysian government. Approximately five percent of skilled Malaysian workers leave the country annually. Also, a 2011 World Bank report found that 20 percent of Malaysian graduates chose to leave the country, citing Singapore as the preferred destination. Singapore is also the primary location for which skilled workers leave.
The Malaysian government is currently working on actively attracting skilled Malaysians working abroad in order to counter some of the attrition they are experiencing. This increased focus on skilled labor also comes from initiatives by the government to become a developed nation by 2020. The government has said that the national policy has shifted from producing semi-skilled workers through its various vocational programs to highly-skilled workers. Their ultimate aim is to have skilled workers account for 50 percent of the country’s population by 2020. Part of this will be to fuel its current financial industry goals.
The competition for highly-skilled workers is driving Malaysian companies to increase pay for 2014. This is most likely an effort to decrease attrition rates of highly skilled workers as well as attract Malaysians currently working abroad back to their shores. No doubt Malaysia will have many hurdles to overcome attracting talent back to the country in its goal to transition to a developed nation. The financial sector will play a key role in this development, and attracting and retaining financial talent will be of key importance for the government.