Draw talent back to Malaysia with better wages, say experts

Investing more in high-tech sectors will also help stem brain drain, they say

- Azril Annuar

Malaysia needs to raise wages and invest more in high-end sectors to attract talent back to its shores, say experts.

A recent report showed that nearly two million of its skilled workforce are residing overseas, most of them in Singapore.

Low wages, as a result of company shareholders and investors taking the lion's share of profits instead of distributing them fairly to employees, are a major factor in pushing Malaysia's talent to other countries, economist Yeah Kim Leng told The Straits Times.

Professor Yeah, who is director of economic studies at the Jeffrey Cheah Institute on Southeast Asia in Selangor, said a more equitable share of profits for employees can be critical in reducing the brain drain.

"Our labour share of income is lower than in many other countries. The global average is that more than 40 per cent of the company's profits is shared with the employees. In Malaysia, the average is 25 per cent," he said.

"We need to increase employees' share in the profits."

In the third quarter of 2023, Kuala Lumpur had the highest median monthly wage of RM3,800 (S$1,080) in the country, chief statistician Mohd Uzir Mahidin said in January. In Singapore, the median nominal income was $5,197 in 2023, based on data from the Ministry of Manpower.

A Feb 19 report by the Department of Statistics Malaysia showed that more than 80 per cent of Malaysians working in Brunei and Singapore were in the skilled and semi-skilled categories.

Research and consulting firm DM Analytics' head of research, Dr Zouhair Rosli, said Malaysia's lack of high-quality investments is another reason behind the low wages and brain drain.