Losing Brain Drain War

The Malaysian Employers Federation (MEF) has painted a grim picture of local employers’ ability to retain talent in the country.

“It looks like local companies are losing the war against the brain drain in the country,” the federation’s executive director Shamsuddin Bardan said.

Sometimes, offering a renumeration that is 40% higher than the person is getting at present is not enough to keep him from leaving for a better-paying job overseas.

“The problem is that once an employee says he wants to go overseas, his income becomes four to five times higher because of the exchange rate,” he said.

Shamsuddin acknowledged that the government had done what it could to bring talent back into the country, citing the Returning Expert Programme introduced in January 2001.

“Unfortunately, this hasn’t worked that well. So far, only about 2,000 Malaysians have returned home through this programme when we know that there are more than a million Malaysians working or staying overseas.”

He said the only real solution he saw was to strengthen the ringgit.

“We must also start becoming more aggressive in terms of our pay structure so we can compete with the more developed countries.”

Shamsuddin said apart from better pay, another major push factor was the various opportunities these other countries presented for the employee’s families.

“Another reason employees tend to seek jobs outside the country is that some of these countries provide better education for their children.”

Bank Negara Malaysia’s 2017 annual report revealed that dependence on low-skilled foreign workers is shaping Malaysia’s reputation as a labour-intensive, low-cost destination for foreign investors, many of whom seek to primarily leverage on its relative ease in hiring foreign workers and lower labour costs.

“In the end, this self-reinforcing image further locks Malaysia into this low-cost bind that will require significant resources to undo.

“This also worsens the displacement of local talent migrating to higher-paying countries, culminating in a brain drain for Malaysia,” it cautioned.