KUALA LUMPUR (Feb 23): Despite the uncertain economic outlook locally and globally, Malaysian firms are dealing with a “fundamental skilled workers shortage”, according to recruitment firm Hays.

In its 2016 salary guide report, Hays said 96% of employers surveyed said skills shortage have the potential to hamper effective operations, and 34% said they do not have the talent to achieve current business objectives.

Areas of shortage include entry and middle management accountancy and finance staff, middle management engineering, IT, marketing, operations and Human Resources (HR) talent and entry-mid level sales.

It added that 65% of employers “would consider” employing or sponsoring a qualified expatriate candidate.

“Fundamentally, there is a skills shortages in these areas, especially banking and finance. There is just not enough people to fill these jobs and salaries in these areas will continue to increase,” regional director for Malaysia Tom Osborne told theedgemarkets.com, after unveiling the report’s findings today.

He added that talent retention is also another key issue facing many firms, and reckoned firms to come up with value proposition outside of benefits and salary, in order to retain their key staff.

“I would point to career progression, mobility and training in order to keep people. Ultimately, firms have to look at the remuneration package that they can offer, in order to keep their key staff, as that is the key driver that makes people move from one company to another,” Osborne explained.

He further noted that employees typically leave their current employment for better salary and benefits, new challenges, or due to the lack of career progression in current role.

Hays’ report also noted 46% of Malaysian companies plan to increase staff salaries between 3% and 6% in the next review period, and 11% plan increases of only up to 3%.

“We will see some tension this year between employers taking a cautious approach to salaries to help navigate economic conditions in the region more generally and candidates hungry for advancement,” its managing director for Asia, Christine Wright, said.

The report also noted that foreign talent pool in Malaysia is at 15% of total workforce, lower than its Asian peers, such as 32% in China, 28% in Hong Kong and 27% in Singapore.