Favourable employment & economic outlook for Malaysia's SMEs in the coming quarters

A recent study on SMEs in the country saw a 6% increase in recruitment in Q2 2022, versus a 5% increase in Q1 2022 over the previous quarters, signaling optimism towards further growth in the next few months.

Malaysian small and medium-sized enterprise (SME) owners are optimistic about their future economic and business growth prospects, and have been hiring aggressively. In fact, BrioHR's recent study saw a 6% increase in recruitment in Q2 2022, versus a 5% increase in Q1 2022 over the previous quarters.

Aggregating data from over 16,000 employees, the BrioHR Employment Index assessed the state of employment in Malaysia's SME landscape.

Per the study, there have been no material changes noted in salary levels yet, with salaries up 1.3% in Q2 2022 — however, salaries are expected to increase in future quarters.

Benjamin Croc, Co-Founder and CEO, BrioHR, said: "The findings show that SME business owners are now more optimistic about improved growth prospects this quarter, but they are also aware that they are still more vulnerable to some risks than they would like, particularly the effects of inflation.”

The findings also revealed that non-traditional ICT industries will have a high hiring demand for digital talent through the year, with staffing and recruiting among the top ten industries on this list in Q4. Particularly notable, total digital jobs increased by roughly 49%, from 27,828 in December 2020 to 41,461 in December 2021.

Further, according to Croc, data science roles remained in high demand in Q4 of 2021, with the data engineer and data scientist being the top two fastest-growing job titles in Malaysia.

"By a large margin, data analytics was the fastest growing skill across the region in Q4. Analytical skills are still in high demand for digital talent in Malaysia and throughout Asia.” he elaborated.

A favourable outlook

According to Bank Negara Malaysia (BNM), the Malaysian economy grew by 5% in the first quarter of 2022 (3.6% in Q4 of 2021) —  this was primarily supported by improving domestic demand as economic activity continued to normalise as containment measures were eased.

The growth also reflects the job market's recovery, with the unemployment rate falling to 4.1% (Q4 of 2021: 4.3%), as well as continued policy support. Similarly, it added that Malaysia’s number of unemployed persons declined to 637,700 in May 2022 from 649,300 in April 2022, while the country’s labour force increased to 16.54mn people in May 2022 from 16.5mn in April 2022.

Despite concerns of a recession, the labour market fundamentals are in place. Malaysia's SME sector is aggressively hiring, indicating optimism for the future.

"They are the backbone of the Malaysian economy, accounting for 98.5% of business establishments in Malaysia, with a high share of employment at 48% and an 18% contribution to total exports, Croc said.

It is also worth noting that CEOs, boards, and investors are increasingly aware that talent is critical to moving the business forward. There is a war for talent, particularly in positions that are difficult to fill such as software engineers. To address this and differentiate themselves, forward-thinking companies are upskilling, re-tooling, and training their employees.

Croc concluded: "This is a good way to attract, recruit, and retain talent because current and potential employees feel valued and appreciated, and they see opportunities to grow and develop within the organisation."

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