There is a lot to be optimistic about in terms of the Malaysia job market currently across key tenets such as Technology, Finance, Banking Operations, Business Transformation and Digital. Private sector growth and investment is fuelling a very steady job market, the backdrop to which is a recovering Ringgit and better than expected GDP growth in the second half of last year. We are all clearly happy about this and benefit from the opportunities that sustained growth offers. This is of course driven by some highly ambitious policy making by Malaysian institutions who wish to see Malaysia ranking top in areas like technology innovation and shared services.
There is always a flip side to unprecedented growth, which if left unchecked can derail the best laid plans, one of which is salary inflation. It’s an age old chicken and egg question as to whether such issues are caused by the candidates pushing or the clients offering disproportionate salaries. Another related, and I would argue, more serious issue, is the excessive staff turnover that the majority of companies are facing in Malaysia currently. The average tenure for staff from job to job in Malaysia sits at around 18 months, which when compared internationally, translates to an alarmingly high churn market. The danger of this to sustained growth is that this could adversely affect decision making when MNCs are deciding on whether to set up new operations here. Worse still, it could lead to companies with operations already here deciding that hiring and retaining quality staff is too much hassle and lead to them pulling out.
We could lay some blame at the table of the candidates out there who take far too much of a short term view on their career development. Often attributed to the Gen Y community, the psychology of looking at one’s options every year to gain a 10-15% increase in base is very common place in this market. It can in part be put down to a degree of impatience for accelerating salary growth beyond anticipated projections of staying with the current employer. Also, there appears to be a ‘window shop’, ‘consumerist’ psychology to the job market these days from the employee’s perspective, which leads to a culture in which it is easier to justify moving on, and because of the belief most other people would do the same. To compound matters, we have the issue of ‘buy back’, where existing employers offer their departing staff a corresponding increase to match or even better the competing offer. As such, employees in this position end up being traded like bullion, and from my observation, critical long term factors are overlooked, such as personal development, skills training, and growth in responsibility regionally or managerially.
My advice to candidates is that, as a rule of thumb, unless in specific circumstances such as redundancy or if the existing employer really is not living up to its promise, they should think very seriously about moving companies after any less than a 2-year tenure. Candidates risk harming the integrity of their CV, which is problematic since employers are now starting to look at tenure as a key part of their evaluation. Candidates really do need to ask themselves the question: ‘How will my career best be served over the next 5 years’ when evaluating any new opportunity. Employers when considering who to promote to the next banding or more into a senior management post are far more likely to look at their existing pool of employees for a variety of good reasons. An existing staff member is, of course, a known entity who is tuned into existing culture and will already have the buy in from staff and stakeholders alike. It’s also a sensible use of resources and helps to incentivize. So with this in mind, candidates should explore opportunities within their existing employer before moving on. Lines of enquiry should be as follows: Is it possible to get the training or platform exposure they’ve been seeking internally? Have they spoken to their manager or HR department about this? What are the department’s plans for growth and are their management prospects on the horizon? Far too often, candidates’ decisions are based on a failure to communicate with one’s employer and gain full visibility on questions like these.
I would argue however that employers in this market can do more to temper the effects of this churn and inflation. The fact is, ironically, money is often not the biggest motivator to candidates. It’s true, most candidates are tempted by the token 15% increase they are offered for switching allegiance, but there is a strong desire to feel more connection with one’s employer through structured training, development, better visibility on career advancement or simply great management and culture. The fact also remains that some firms out there are doing better than others on retention and this can be put down to practical steps being taken to nurture a retention culture. Furthermore, employers can simply implement policies not to offer candidates that have only been with their currently employer for less than 2 years and refrain from offering buy-backs to the more cynical, tactical job seeker.
The underlying demand itself for talent is a primary cause for such issues, especially where supply is unable to keep up. So to that end, employers need to be creative in terms of their hiring strategies. There are skill requirements in this market where there really is only a shallow pool of candidates, so rather than sign up for the merry-go-round of trying to hire usual suspects in the market, employers should look at nurturing their own fresh pools of talent. Hiring transferable skillsets from highly talented, aspiration candidates who are willing to learn is therefore key. By training and investing in staff more in this way, employers will also experience more candidate loyalty in turn. After all, that’s the journey Malaysia is on currently – it’s not the finished product, but it has phenomenal potential. By adopting this kind of approach, then perhaps candidates will think twice before moving employer after 18 months for money alone and employers will have less of a pressing issue around retention. Ultimately, a fresh approach needs to be taken more broadly, as hopefully the demand underlying all of this will not subside for years to come.
by Siew Yong Bong