As Malaysia prepares to join the ivy league of developed nations, human capital remains an integral requisite in its priority agenda. For the nation to meet the requirements of the new growth model, it is crucial to develop, attract and retain talent. BizHive Weekly takes a look at the current talent issues and the latest trends that are evolving.
Talent migration: A growing concern
Human capital is the foundation needed for a nation to be a high-income economy.
As the country prepares to join this league, it is embarking upon a structural transformation of its economy that relies on skill intensive and innovation-led growth.
Graph source – Malaysia Economic Monitor:Brain Drain (2011)
For Malaysia to meet the requirements of the new growth model, it is crucial to develop, attract and retain talent.
However based on a report from the World Bank titled, ‘Malaysia Economic Monitor: Brain Drain’ that was published last year, there was a worrying trend of Malaysia’s ‘cream of the crop’ straying to other countries seeking greener fields.
According to the report, a third of the total diaspora could be constituted as brain drain.
It was explained in the report that the migration was becoming more skill-intensive with the share of skilled migrants rising from 28.5 per cent in the 1990s to 34.2 per cent in 2000.
The absolute stock of skilled migrants rose rapidly, at 5.2 per cent annually, which led to a 60 per cent overall increase in the decade which showed that the existence of a skilled talent pool on the domestic side.
“We have many talented people who hold senior positions and they are assets to their companies.
But they tend to leave their jobs in a span of a few years which is one of the main problems in the industry.
Money alone does not retain people but they must feel that they are paid fairly and treated well for the jobs they do,” said ICLIF Leadership and Governance Centre (ICLIF) director of research and curriculum David Wee.
“The organisations they work in have to create the conditions and environment that motivate their workers.
These would be the workplace culture, the people they work with that would build a sense of camaraderie, understanding and trust,” headded .
In September 2012, media reports stated that the Minister in the Prime Minister’s Department, Tan Sri Nor Mohamed Yakcop said, “lt is estimated that about 1.3 million tertiary graduates will come on-stream over the next five years.
This will meet the expected demand of about one million skilled jobs.
“However it should be noted that although the number of tertiary graduates can sufficiently meet the demand of skilled workforce, the quality of this work force remains a concern.
The need to continue improving the quality of our work force is still an issue as the shortage of high quality workforce remains as a major investment constraint for our country.
Furthermore the lack of quality workforce has impacted growth in labour productivity and real wage especially, when compared with our regional peers.”
Efforts have been initiated by the government with the establishment of Talent Corporation Malaysia Bhd (Talentcorp) to help address this issue.
Chief executive officer of Talentcorp noted that, “The issue that faces us is that if we continue to have brain drain and insufficient talent, this will impede the ability of businesses to invest and grow.”
He further added that Malaysia had been spared the detrimental type of brain drain that had affected other countries because the stock of tertiary-educated Malaysians tended to remain constant as the number that left would be compensated by the number that was replaced by the education system.
“But we cannot be complacent even if we can maintain the numbers, because with our ambition to become a developed nation by 2020, we need not only quantity, but the best quality of talents to help us move up the value chain,” Johan explained.
At the surface, it seems as if brain drain does not present an issue.
After all, other countries in the region have seen a more rapid increase in their respective diasporas over the period 1990- 2000 (based on the Organisation for Economic Cooperation and Development (OECD) numbers reported by Docquier and Rapoport in its research).
Yet, upon closer inspection, relative to the domestic skills base, Malaysia has been climbing up the rankings in the chart on brain drain intensity.
This according to the World Bank Report, suggested that despite slower emigration than elsewhere, Malaysia’s stock of human capital domestically has not grown as fast as elsewhere.
The talent migration issue in Malaysia no doubt would have ramifications to the nation’s growth, but the question now is whether or not the efforts will be enough to curb the trend and with countries such as Australia reviewing its immigration policy to enable graduates in Australian universities to apply for work visas, will this further exacerbate the issue at hand.