[Malaysia] New expat employment policy prompts wage expectation concerns

In Malaysia, concerns have been raised that a new expatriate employment policy introducing higher minimum salary thresholds for foreign professionals could lead to rising wage expectations among local workers, The Malaysian Reserve reports.

HR experts warned that this might be an outcome of the change, as employers continue to peg salaries to productivity and business needs.

Association of Employment Agencies Malaysia president Datuk Foo Yong Hooi reportedly stated that the policy could create a “domino effect” on how local employees perceive their own pay.

“When expatriates are paid higher minimum salaries, local workers will naturally ask why they cannot earn the same,” he said.

Mr Foo did add, however, that Malaysian companies generally prioritise local talent to manage costs and only hire expatriates when necessary.

“If companies can find suitable local talent, they will hire locals. No business will bring in expatriates without strong justification,” he said, citing additional costs such as housing, relocation, allowances and visa requirements.

He also warned that higher salary benchmarks had the potential to put additional financial pressure on firms that genuinely require specialised foreign expertise.

The Malaysian Employers Federation (MEF) reportedly cautioned that Malaysia is not yet ready to fully replace expats in senior or highly specialised roles without affecting productivity.

MEF president Datuk Dr Syed Hussain Syed Husman stated that the local talent pipeline remains uneven in niche areas such as advanced engineering, digital transformation, specialised finance, energy transition and high-end manufacturing.

“The main challenge lies in the depth of experience required for niche positions,” he said.

He added that many expatriates currently occupy roles which demand extensive regional and sector-specific exposure.

Source: The Malaysian Reserve

(Quotes via original reporting)

In Malaysia, concerns have been raised that a new expatriate employment policy introducing higher minimum salary thresholds for foreign professionals could lead to rising wage expectations among local workers, The Malaysian Reserve reports.

HR experts warned that this might be an outcome of the change, as employers continue to peg salaries to productivity and business needs.

Association of Employment Agencies Malaysia president Datuk Foo Yong Hooi reportedly stated that the policy could create a “domino effect” on how local employees perceive their own pay.

“When expatriates are paid higher minimum salaries, local workers will naturally ask why they cannot earn the same,” he said.

Mr Foo did add, however, that Malaysian companies generally prioritise local talent to manage costs and only hire expatriates when necessary.

“If companies can find suitable local talent, they will hire locals. No business will bring in expatriates without strong justification,” he said, citing additional costs such as housing, relocation, allowances and visa requirements.

He also warned that higher salary benchmarks had the potential to put additional financial pressure on firms that genuinely require specialised foreign expertise.

The Malaysian Employers Federation (MEF) reportedly cautioned that Malaysia is not yet ready to fully replace expats in senior or highly specialised roles without affecting productivity.

MEF president Datuk Dr Syed Hussain Syed Husman stated that the local talent pipeline remains uneven in niche areas such as advanced engineering, digital transformation, specialised finance, energy transition and high-end manufacturing.

“The main challenge lies in the depth of experience required for niche positions,” he said.

He added that many expatriates currently occupy roles which demand extensive regional and sector-specific exposure.

Source: The Malaysian Reserve

(Quotes via original reporting)