Malaysia Budget 2023: 7 things on the wishlist for business & HR leaders

From FDI-friendly policies to moving the needle on low-level roles, from incentives for ESG and FWAs to support for building digital-savvy talent - here's what we're hoping to hear on 24 February 2023. 

As Malaysia’s economy continues its recovery trajectory from the pandemic, it does so amidst a challenging economic backdrop of global hyper-inflation and the specter of an impending recession.

As such, Malaysian Prime Minister Anwar Ibrahim has made it clear that the 2023 Budget to be presented on 24 February 2023 will take into account "the current economic challenges that can drive the country's growth, attract investment into the country, and bring blessings to the people".

In a post about the Malaysia Madani slogan, he said: "The government is also considering competitiveness, the speed of business approval as well as a number of new initiatives including digitisation and natural resource production in the draft process in the 2023 Budget."

He added that the biggest challenge so far in framing the Budget is finding a balanced policy to attract investors and protect the people, especially the hardcore poor segment.

Human Resources Online's Aditi Sharma Kalra has scoured the nation for views and sentiments of HR and other business leaders to identify what they would value most in today's environment.

From investor-friendly policies to eradication of the stigma facing low-level roles, from incentives for ESG and FWAs to support for building digital-savvy talent - here's what seven leaders have said matters most to them.

Investor-friendly policies to attract FDI and talent to Malaysian shores

The Commerce.Asia Group of Companies is looking forward to more investor-friendly policies, to attract foreign direct investments (FDI) and talent, to Malaysia shores. Hopefully, this will also cover policies to further grow the country’s e-commerce industry as well as the local start-up ecosystem so that local innovation continues to thrive, says Ashvine Krishnan, Group Head of Human Resources, The Commerce.Asia Group of Companies (pictured above, in centre).

On the HR front, to build a thriving startup ecosystem within the nation, Krishnan urges the government to be proactive by increasing synergies with the right strategic initiatives, such as tax exemptions for local e-commerce players and other impetus incentives to position Malaysia as an e-commerce hub.

Employers are also hoping for strategic human capital development assistance for education, reskilling/upskilling, and inclusive practices in STEM (Science, Technology, Engineering & Mathematics) education, hiring, and immigration policies to stem the effects of brain drain and increasing sustainable availability of skilled talent pool needed for startups.

Also the wishlist for Krishnan is the removal of ‘barriers’ by providing funding for incubators and accelerators, offering tax breaks for R&D /innovation, and increasing access to education and training across all educational levels to nurture and develop a growth mindset coupled with core capabilities essential to drive innovation as a culture.

Policies which will address and incentivise overall wellbeing and wellness needs of the population are also likely to be well-received by the industry. She affirms: "Post-pandemic, employee wellbeing is on every company’s mind at the moment, as are the issues of cost and productivity when an employee is unable to optimise their performance and potential at the workplace."

Finally, governments are powerful advocates for startups. As such, she adds, the government should promote the importance of innovation and entrepreneurship as culture, as well as highlight success stories of local entrepreneurs and startups so that the younger generation are inspired to be creative and contribute their part towards nation-building.

Short-term targeted subsidy or tax relief to sustain and support the middle class

To keep Malaysia's recovery on track, a sustained middle class (M40) is imperative for economic growth. Thus, to insulate the M40 from further doldrums, Alvin Kanniah, Head of HR, Ground Team Red (GTR) (pictured above, top right), says it would be encouraging to see a short-term targeted subsidy or tax relief. The challenge then, would be to avoid the easy way of taking excessively from the proverbial Peter (T20) and giving it to Paul (M40).

Alvin admits the talent market in these recovery days has been very tight due to prevailing trends such as the rise of the gig-economy and the spike in demand for labour in the manufacturing industry. These opportunities represent an easy way for labour to re-enter the workforce. However, the fact that jobs in these sectors remain ever so sensitive to market forces, will move to dampen optimism amongst job-seekers.

As such, to help labour transition into niche and potentially lucrative opportunities that would otherwise remain unbeknownst, he urges further targeted investment into reskilling/upskilling programmes in alignment with skillsets relevant to market demand (e.g. 3D jobs in the aviation industry) to benefit job-seekers. "The eventual goal would be to elevate the B40 into the M40 and to enlarge the talent pool for employers," he explains.

Alvin adds: "For a longer term approach, it would also be encouraging to see renewed and increased investment towards a much needed re-vamp of the education system into a more robust, qualitative, and relevant iteration that would fulfill the growth needs of the nation."

Avenues for students to be exposed to real industry life

Siti Khatijah Binti Hj. Hamzah (MMIHRM), General Manager, Human Resource Management & Development Division, UTMSPACE (pictured above, top centre), believes that in order to have competitive and innovative young talents; students need to be exposed to real industry life and the syllabus needs to have engagement skills with the industry.

She says: "Professionals who already have special skills in their fields should be encouraged to have a session with the students. This kind of exposure and interaction will surely prepare talents before they penetrate into the industry of their choice."

Prioritise digital talent readiness for national competitiveness

The employment market in Malaysia has evolved quite a fair bit since the onset of the pandemic. Nonetheless, Vic Sithasanan, Managing Director, JobStreet Malaysia (pictured above, bottom right) is of the view that COVID-19 was not just a ‘temporary disruptor’ but also a ‘permanent accelerator’ as market uncertainties continue. Job growth is strong, but the labour market is short. In addition, skill gaps are real and there is a need to look inward and outward. 

Hence for the upcoming Malaysian Budget 2023, he hopes the government would introduce guidance, incentives and policies relevant to this scenario.

He shares: "Malaysia needs, in particular, prioritise digital talent readiness as automation has also threatened various existing jobs, coupled with a shortage of qualified talent in emerging roles. Due to the rising demand for digital tools and processes, there is an urgent need for Malaysians to appreciate the need to continuously upskill and reskill themselves with digital technologies, digital literacy, and transferable skills – and we hope Budget 2023 would point them in the right direction for the greater good of their careers and Malaysia’s national competitiveness."

Real minimum wage level and support to eradicate stigma of low-level positions

On the wishlist for Nicholas Thooi, People (HR) Director - APAC, Archetype (pictured above, bottom centre), is to have a real minimum wage level and enforcement in the F&B and service industries, along with proper training and certifications for employees.

He explains: "I believe this will tap into our local youths/graduates as a talent pool and allow them to build work skills while breaking the stigma of these jobs as low-level positions."

Incentives to sustain implementation of FWA, paperless HR, ESG 

With the Employment Act Amendments in place, Cho Chun Loong, Head of Human Resource, iPay88 (pictured above, bottom left) hopes the Government will provide some form of corporate tax incentive and double tax deduction for employers who implement and sustain flexible work arrangements (FWA) in the organisation.

This, he says, will not only encourage more employers to embrace the new-normal way of working, but it will also assist in managing the cost of implementing FWA in the organisation while raising employee morale with greater flexibility at work.

Cho highlights the need for incentives in another segment as well: "In supporting the ESG (environmental, social, and governance) agenda and go-green initiatives, such incentives can further be curated for companies who go paperless, especially if HR processes are digitalised and a paperless HR is implemented in the organisation.

Policies to encourage public-private partnerships and a 'digital first' workforce

Catherine Lian, Managing Director and Technology Leader, IBM Malaysia (pictured above, top left), is looking forward to more favourable policies to encourage greater public-private partnerships (PPPs) as this is a ‘fast track’ avenue toward realising sustainable growth and increased national competitiveness. 

Such partnerships, she says, tend to work well when private sector technologies and innovation combine with public sector incentives to realise nation-building objectives for the present and future generations ahead.

"From the human resources perspective, the critical component is technology, and the need to build a 'digital first' workforce for Malaysia," Lian shares.

As highlighted by the Department of Statistics of Malaysia, with 7.3% of the population being above 65, long-term economic growth has to rely on ensuring that the total workforce adopts an attitude of self-learning to pick up the necessary skills for the future.

She concludes: "Only by leveraging an approach that considers a high labour force participation from all age groups will we be able to a sustainable growth path for the nation."

Lead image / Featuring all the interviewees