10 Hebat HR Trends in Malaysia

In 2022, 65% of workers in Malaysia reportedly preferred to work from home post-pandemic, thus securing the success of the shift from traditional work models to remote and hybrid work models. The situation of businesses in Malaysia is unique. The most notable HR trends in Malaysia have been attributed to the pandemic. 

But, just like every other place in the globe, the aim of HR in Malaysia remains the same: to manage the various needs of employees and to ensure that the company is run efficiently. 

The pandemic has required human resource professionals to change the way they approach employee recruitment, performance, and management. For businesses to remain competitive and sustainable, this modification is required. 

The labour market has inched towards positive growth on a monthly basis over the past months. Meanwhile, both employers and employees have had to adapt to novel remote work arrangements — a first for many organisations.

Now in 2023, HR best practices have evolved, with the new normal of Malaysia calling for a refreshed look at human capital management. Here’s a look at the 10 Hebat HR trends in Malaysia, along with the observations of leading HR influencers in the nation.  

10 Hebat HR trends in Malaysia

1. Rise in remote working

“Technology, inclusivity and flexibility would be among the key factors. Getting the technology right and establishing the “rules of engagement” are important hr issues in malaysia and definitely critical for the success of the emerging hybrid workplace and the way forward. For employees who prefer working at a distance, the challenge is to create an environment that is as rewarding as in-person work. Technology plays a significant role in this and it enables business continuity.”

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- Nora Manaf, Group Chief Human Capital Officer at Maybank

As precautionary measures to prevent the spread of the virus, there has been a shift in the workspace from the physical office to homes and remote workspaces. The benefits of remote working with regard to money saved in renting office space, giving employees flexibility and boosting performance, will encourage more companies to embrace the development as one of the major HR trends in Malaysia in 2023. 

To enable better remote working situations, businesses in Malaysia will need to integrate more distal tools, and reconsider how to shift performance goal-setting and employee evaluations. Challenges related to communication and engagement can be overcome with the aid of employee engagement solutions and tools, such as pulse surveys, ideation boards, suggestion lines, and other such features.  

2. The rethinking of the traditional workplace

As Malaysia approached the endemic phase of COVID-19, 2021 demonstrated that a digital-first, agile approach is required for 2023. Businesses have seen an increase in remote workplaces, and the hybrid work model will be one of the key HR trends in Malaysia to watch in 2023.

This combines the advantages of both remote and traditional work models, and many organisations are now opting for a dispersed workforce — spread across multiple regions/locations. This has also resulted in a redefining of the concept of employee visibility, with a data-driven approach expected to be critical to providing insights on team performance — regardless of where they are.

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3. Digitization of HR

“The adoption of digital tools for the talent process and businesses will continue to rise. It is natural that will keep on changing. From painful to effortless, expensive to affordable, generic to individualised: Digitalisation will continue to be the key driver. It is all about how fast you can seize the opportunity.”

- Syukri Sudari, Group Chief People Officer at Affin Bank Group

It is critical to ensure a smooth transition from the office to working from home. Employee performance needs to be tracked, which is major hr issue in malaysia and will be difficult without the right digital tools.

The Malaysian workplace is going digital, and this HR trend will continue for many years. Businesses will benefit greatly from adopting this trend because it will allow them to automate tasks and increase productivity.

There are numerous digital management tools available today that businesses can use to keep their operations running and increase productivity and competitiveness in 2023 and beyond.

4. Use of HR software

“The biggest challenge for HR will be to understand the wealth of technology that’s available to them, and make sure employees are able to find and use them effectively. Are HR leaders ready to oversee an expanded workforce that includes people and technology working together?… As a rule of thumb, any HR transformation, whether it is digital or not, has to take place with a clear objective in mind. The transformation has to make business and people sense.”

- Dr. Loo Leap Han, Group Head of Talent Management (Malaysia & Singapore) at Biomed Global

As businesses progress through digitization of work processes, one of the hebat HR trends in Malaysia in 2023 would be the rise in the use human resource information and human capital management solutions to enhance the execution of the companies’ responsibilities. 

The benefits of these apps are becoming increasingly obvious to organizations across the country.  These applications integrate a variety of critical HR functions, including employee attendance system, benefits, recruitment, employee data, employee performance, and employee management data. And more importantly, they will be used to streamline communication between leaders and employees. 
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Also read : Top 6 Human Resource (HR) Software in Malaysia in 2024

5. Increase of contingent workers

Many people lost their jobs as a result of the economic uncertainty caused by the pandemic. Businesses' budgets had to be cut as they had less money to manage their workforce. However, a marked HR trend in Malaysia is the shift towards hiring more contingent workers. 

The reasons for the increase in contingent workers include the following:

• The most common reason was the flexibility it provides for workforce planning, making it easier to scale up or scale down as needed.
• The second most common reason was the need to fill specialised roles in order to avoid disruptions to operations and the overall business.
• Other important factors include the availability of a workforce with specific skills on a short-term/project basis, as well as allowing time for evaluation before hiring permanently.

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6. Diversity and inclusion

“HR leaders need to be more courageous in pushing D&I at the top leadership and board level armed with robust data and insights. D&I is often labelled as fluffy and not concrete. Hence, HR needs to start driving this agenda with quantitative narratives and not just qualitative descriptors.”

- Fong Tuan Chen, Chief People Officer at Berjaya Corporation Berhad

Malaysia is among the frontrunners of workforce diversity and inclusion, and the rate of diversity and inclusion in businesses is poised to rise further in 2023. Businesses should inculcate a flourishing and psychologically safer environment that thrives on trust, respect, grit, grace and openness. This includes promoting and enhancing mental well-being, mental toughness, and mental agility, improving interactions and team dynamics, instilling Diversity, Equity & Inclusivity (DEI) values and minimising productivity leakages and medical costs within a more humanising and sustainable model.

7. Emphasis on mental health

“We continue to inculcate a flourishing and psychologically even safer environment that thrives on Trust, Respect, Grit, Grace and Openness more cohesively in targeting specific groups and focus areas. This includes promoting and enhancing mental well-being, mental toughness, and mental agility, improving interactions and team dynamics, instilling Diversity, Equity & Inclusivity (DEI) values and minimising productivity leakages and medical costs within a more humanising and sustainable model.”

- Nora Manaf, Group Chief Human Capital Officer at Maybank

Mental and emotional well-being are components of psychological well-being that influence how people think, feel, and behave. You can accurately identify different groups of employees based on their mental health status using data analytics for impactful strategic interventions. 

The key outcomes can include accommodating employees' varying levels of readiness and willingness to disclose mental health concerns through various support channels based on their preferences.

Businesses are realising how important mental health is to the smooth operation of day-to-day operations. Multiple surveys have found that since the pandemic, remote workers' mental health has improved, leading to an increase in productivity.

HR in Malaysia will ensure that a healthy working environment is created in 2023 to promote worker mental health enhancement. Mental health first responders can be made available to respond quickly and effectively to any employee who is experiencing a mental health issue.

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8. Creating a purpose-driven culture

“The workplace landscape is rapidly changing and it is important for us to encourage our people to be the change that they want to see in order to stay relevant and competitive. While we focus in protecting what matters to our people in all aspects, we empower them by providing avenue and platforms to unleash their potential.  We strongly believe in order to win in the marketplace, we must first win in the workplace. Our people are our competitive advantage who will continue to drive and generate positive value to all our stakeholders.”

- Safinas Mohd Ibrahim, Chief People Officer at AXA Affin Insurance

In addition to recognising the importance of creating a cohesive employee experience, HR leaders should modify organisational culture to better suit a remote working environment. The workplace is no longer defined by a physical location, but rather by long hours of solo work and online meetings.

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It is more important than ever for HR to engage its workforce, or risk the organization's culture deteriorating into one of isolation, anxiety, and video call fatigue, threatening productivity, on-the-job learning, and employee retention.

9. Reskilling the workforce

“When the right opportunity exists, asking for a promotion is fine, especially if you are ready for it. Notwithstanding that, a good line manager in an organisation with strong talent management practices would have proactive career conversations and individual development plan with key talent. Hence, their career progression is managed proactively.”

- Khim Tan, Group Chief Human Resource Officer at Alliance Bank Malaysia Berhad

At least 44% of businesses consider transformational learning and workforce reskilling to be a top skill for adding value in today's environment. However, during this uncertain time, this can be a difficult process because employees must be re-trained to work and lead effectively in a remote environment.

Because traditional face-to-face training formats are no longer an option, to support this growing HR trend in Malaysia, HR leaders must be innovative and open to digital learning via online platforms, as well as adapting their own custom courses to create a virtual, asynchronous, or live learning environment.

10. Harness analytics

"An HR’s role is going to change drastically and move away from the traditional HR roles. The new digital economy will require employees to constantly upskill and find new, creative ways of thinking and problem solving. It is precisely why HR must transform themselves into Digital HR and Data Analytics ambassadors in the ever-more-digital environment.” 

- Dr. Loo Leap Han, Group Head of Talent Management (Malaysia & Singapore) at Biomed Global

In today's remote working environment, data will be a critical factor in improving productivity, understanding talent needs, and designing the future workforce. However, less than half of Malaysian HR professionals admit to being skilled at using data and analytics to target and recruit new talent.

HR must be able to analyse and interpret data, use it to help business leaders understand the workforce's needs, and incorporate the results into workforce planning and strategizing. HR will need to advocate for the role of mindset changer. Dealing with employee expectations and ensuring the business's productivity would also fall under the purview of the HR professional.

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Technological change isn't the final roll of the dice that will automatically fix HR issues in Malaysia. However, adopting the right HR tech stack which is backed by research, data, buy-in from the necessary stakeholders, and the ability to utilise the technology to the extent of its capabilities will aid the organization on the path of change.

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Interested to know how peopleHum can help the Malaysian enterprise take upon the HR trends in Malaysia in 2023 listed above? Schedule a demo with our specialists today!