Report: 86% small businesses in M’sia struggle to compete for talent amid soaring hiring costs

AGAINST the backdrop of ongoing economic challenges and changing employer-employee dynamics, hiring managers in Malaysia are navigating new complexities in their quest for talent, according to a report published by Employment Hero.

According to the report titled “The State of Recruitment Growing Costs and Concerns”, rising costs in the hiring process is a key concern for hiring managers in the country.

The report, which surveyed 515 business leaders in Singapore and Malaysia from across different organisation sizes and industries, further cited higher salaries due to the cost of living (52%), labour shortages (37%), and increased job board posting costs and recruitment recruiter fees (32%) as key factors.

On average, it takes hiring leaders 41 days to fill a role in Malaysia and Singapore, which is the longest period of time needed out of all the other countries surveyed (Australia, New Zealand and the UK).

And their challenges don’t end there. Once hired, 19% of candidates do not pass probation or remain in their role after the first six months, which complicates the hiring process. 23% of hiring leaders mentioned that this factor contributes to hiring costs increasing.

“The data from the report underscores the complexities of today’s hiring landscape in Malaysia. Rising costs, longer hiring cycles and the struggle to retain talent during the crucial probationary period are hurdles hiring managers face daily,” said Employment Hero CEO and co-founder Ben Thompson.

“To address these shifts, businesses need to adopt a holistic approach to hiring and retention – one that includes using technology to streamline and improve the hiring and employee onboarding process.”

The impact on small businesses

Pic credit: Unsplash/Joshua Rodriguez

In Malaysia, the small businesses face a distinctive challenge. A staggering 86% of hiring leaders agree that small businesses struggle to compete for talent with multinational corporations, and 81% agree that the costs of job boards are prohibitive to them.

Diving deeper, 97% of hiring leaders in small and medium-sized enterprises found their hiring challenges linked to their inability to match large organisations’ salaries, and 96% cited not providing similar perks as the cause.

“The rising costs of recruitment creates a significant disadvantage for local SMEs, leading them to invest countless manual hours in the hiring process, which further impacts their productivity and profitability,” said Employment Hero managing director (Asia) Kevin Fitzgerald.

“SMEs are the backbone of Malaysia’s economy – so it is crucial to ensure they have access to seamless recruitment processes and equal opportunities to attract and retain the best candidates.” – Oct 26, 2023


Main pic credit: ASBN

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