the growth of shared services

Shared services are booming in Malaysia, with the industry expected to be worth US$6.7 billion by 2025. Due to relatively low operational costs and the large talent pool, the country was ranked the world’s third most attractive location for global services last year.

Traditionally shared services have focused largely on areas such as IT support, certain HR functions such as payroll, and legal services such as contract management. While that looks set to continue into the foreseeable future, we also see growth in newer areas such as financial services and corporate secretarial functions.

The continued growth of shared legal services presents a wide range of career opportunities to talent in the sector. In particular demand are individuals with a good understanding of regional or international legal frameworks, as well as candidates with data compliance or ESG expertise.

This growth will also positively impact the HR industry. With the continuous growth of shared HR functions, there will be a greater demand for HR support across various departments both to recruit new talent and to assist existing headcount.

Other sectors have also seen increased foreign investment, such as Texas Instruments’ plan to invest up to RM14.6 billion to build two new factories, and Bridge Data Centres partnering with the Malaysian Research Accelerator for Technology & Innovation to expand the former’s data centre campus. With HR and legal being vital support functions, increased foreign investment will bring about more new opportunities.

cybersecurity creates new demand for talent in both HR & legal talent

Malaysia was aiming to achieve 80% 5G coverage in populated areas by the end of 2023, and allocated RM60 million to government body CyberSecurity Malaysia to develop a 5G cybersecurity testing framework as part of the 2024 budget.

At the same time the government is proposing updates to the country’s Personal Data Protection Act, which will tighten reporting requirements for companies and increase penalties for cyber crime.

All of this is likely to lead to stronger demand for legal and compliance talent from a broad range of industries. This talent demand stems from businesses and platforms that handle large amounts of data, as companies work to ensure they are following new regulations.

This is expected to have an impact on the demand for skilled HR talent as companies look to strengthen their data compliance functions or build them up from scratch. To this end, we see particular demand for legal and HR talent with expertise in technology fields.

ESG is a national focus

In line with Malaysia's commitment to sustainability, the country aims to meet 70% of its energy needs from renewable sources by 2050. At the same time, companies outside the energy sector are increasingly paying attention to corporate ESG responsibilities, due to demand from customers and employees as well as increasing legal and regulatory requirements. Sustainability-linked loans are also gaining popularity among clients, and banks will be increasing their capabilities to meet new market demands.

All of this results in the surge in demand for legal professionals in compliance as companies build ESG committees who can navigate complex layers of local and international regulations and reporting standards. As the ESG is in its infancy in Malaysia, demand remains modest, but it will grow in the near future, especially when the deadlines approach.

At the same time there is a steady stream of IPOs, with Bursa Malaysia expecting to complete 31 new listings in 2023, down slightly from 35 in 2022. This creates new compliance requirements for companies planning to list, many of whom need to build out functions from scratch.

Having strong legal talent on board allows new entrants, or companies new to building their teams in Malaysia, to hire qualified candidates in an equitable and fair way, while adhering to local recruitment regulations and ethical standards.

digital transformation in HR

With increased focus on compensation and benefits, learning and development and hybrid working, the HR function is more complex than ever. This is driving increased digitalisation as companies adopt enterprise management platforms such as Workday, SAP and Sage for data analytics and to streamline the processes.

Larger companies were typically early adopters and are extremely unlikely to switch from one system to another, so they tend to favour candidates who have experience with the particular software they already use.

Where we see more opportunity is with small and medium enterprises (SMEs) who are digitalising their HR systems for the first time. As implementing a system can be a challenging process, since it entails changing the way HR works and socialising new working methods across the entire employee base, HR talent with experience of setting up these systems are highly prized.

renewed demand for learning and development

In the 2024 budget, Government body HRDCorp was allocated RM1.6 billion to provide 1.7 million training places, an investment that will have a widely positive impact on the workforce.

First, companies have the opportunity to tap into this fund to upskill existing employees, which will create additional demand for HR professionals to support expanded learning and development (L&D) programmes.

Second, HR specialists themselves have the opportunity to acquire new skills, such as in-demand human resources information system (HRIS) tools to enhance their market appeal.

Third, the combination of this scheme plus RM44 billion in loans and financing guarantees for SMEs announced for 2024 is likely to encourage small business creation and expansion, which will create demand for legal and corporate services in the long-term.

The opportunity for enhanced L&D programmes gives companies the chance to strengthen their employer brand, aligning with the rising demand from candidates who are seeking opportunities to develop their skills.

The 2023 Randstad Employer Brand Research report shows that in fact, 83% of Malaysians said that growth opportunities are critical, but only 61%t have adequate development opportunities. By tapping into these government programmes, companies can upskill their existing workforce while also bridging a vital gap between employee expectations and their experience.

the importance of employer branding in talent acquisition

With competition for talent increasing, there has never been a more important time for companies to have a strong employer brand. Multinational companies have an inherent advantage here since they tend to be better known, but we’re increasingly seeing smaller companies give thought to how they can successfully compete for candidates.

Going into 2024, employers need to develop and promote a full compensation package, which could include L&D opportunities, hybrid work and a sense of purpose, to attract talent who are looking for more than pay.

According to the 2023 Employer Brand Research, 96% of Malaysians value non-monetary benefits such as positive workplace relationships and flexible working arrangements, as well as a greater focus on work-life balance.

Often we see this combined into a single function encompassing talent acquisition, employer branding and employee engagement. This HR trend looks set to continue, so we see growing demand for HR talent who can drive these initiatives.

2024 HR and legal talent trends

We’re optimistic for hiring across HR and legal roles in 2024, with volumes likely to be higher than the previous year.

Candidates remain somewhat cautious when it comes to changing employers, particularly those who currently enjoy flexible working arrangements or clear career development opportunities. Employers will have to work hard to attract these candidates, reinforcing the importance of a strong employer brand and benefits that can improve their work-life balance and continue their career progression without gaps.

We expect 2024 salary trends in the HR and legal sector to be broadly in line with trends in 2023, with candidates moving to a new employer enjoying average salary increments of around 20% to 25%. Employees who are staying with their current employer should expect a salary increment of between 4% and 8% in 2024.

compliance with strong digital skills are high in demand

As data regulations tighten, demand for compliance talent who can automate the analytics and processes required during critical reporting and audits will increase. Besides technology firms, we are also seeing similar skills in demand when it comes to digital banking.

As the government continues to push for a cashless society, we expect to see more job opportunities. This talent demand is driven by banks building their capabilities and resilience to scale and meet the dynamic needs of their customers.

the most in-demand HR and legal roles in 2024

These are the top 4 most in-demand careers in HR in 2024:

Labour law compliance
HR IT systems or human resources information systems (HRIS)
Compensation and benefits, especially those with experience in designing and setting up programmes
Organisational design

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