Promise of higher wages in neighbouring countries luring Malaysians abroad

Author: Kate Whitehead | Date: 7 Sep 2016

Devalued ringitt means migration has increased this year and is expected to continue

The promise of significantly higher salaries in neighbouring Asian countries is leading to an exodus of Malaysian workers, including both highly skilled professionals and manual labourers.

While Singapore is still the main draw for Malaysian workers looking for jobs abroad, they are also now moving to China, Hong Kong, Japan, Taiwan and South Korea.

"We’ve seen much more of this sort of migration this year than last year. It has certainly increased, and we expect it to continue,” said Nick Lambe, group managing director at Links International.

Lambe said the trend is largely caused by higher pay and the exchange rate – the value of the Malaysian ringgit fell dramatically last year.

He noted that senior Malaysian executives were moving with the aim of enhancing and developing their careers, while more junior staff and blue collar workers were usually making the shift purely from a financial perspective.

“At the more senior end of the market, the migration of experienced-level candidates to Singapore is a move to the regional headquarters. Singapore and Hong Kong are the hubs for most regional headquarters,” said Lambe. But he added that much of this recent movement was made up of blue-collar workers.

The trend is not new, but it has sharply escalated in the last year. In 2015, research by recruitment firm Hays revealed that 93 per cent of Malaysians who were looking for jobs would seriously consider leaving to work overseas. At the time, the desire to gain international exposure was the key pull, but now the depreciating ringgit has made higher salaries an even bigger draw.

Talent Corporation Malaysia Berhad - a government body set up in 2011 and tasked with trying to stem the brain drain - estimated that 300,000 Malaysians, or 10 per cent of the country’s population, left in the decade to 2015.

Reporting on the issue recently, The Star Online quoted former Small and Medium Enterprises Association Malaysia president Teh Kee Sin, who said the trend runs country to the view that Malaysians are not willing to do work deemed difficult and dirty. He added that more locals would be willing to take up unskilled or menial jobs if they were paid well in Malaysia.

“Many commute to do such jobs in Singapore. There must be something wrong if a Malaysian is willing to work as a cleaner in Singapore but not in Johor Bahru,” Teh was quoted as saying.

Regardless of whether workers are at the top end of the pay scale or the bottom, the draw to work overseas is a better wage.

“Jobs abroad can pay significantly higher. Salaries in Singapore are three times as much as that in Malaysia,” said Lambe, referring to the executive level positions.

But that pay disparity is just as wide for blue-collar workers. The Star Online report quoted an HR manager as saying there was a demand from oil and gas corporations based in Singapore and the Middle East for skilled workers. He said that while a certified welder in Malaysia could earn RM4,000 - RM5,000 a month, that same worker could pick up the equivalent of RM11,900 - RM14,900 in Singapore and RM40,290 in the Middle East.

Beginning in January 2017, the qualifying salary for Singapore’s Employment Pass (EP) will be increased from S$3,300 to S$3,600. Any foreign professional with a managerial, executive or specialised job offer in Singapore can apply for the Employment Pass. The S$300 increase effectively bumps up the monthly salary by another RM900.

And looking even further into the future, the opening of a new high-speed rail line linking Singapore and the Malaysian capital Kuala Lumpur in 2026 will reduce the current 11-hour journey to just 90 minutes.