The Malaysia tech talent crunch is an unexpected development for a country with workers who have a high level of digital skills. Some employees have inadequate knowledge but acquire it through on-the-job training, while an even smaller number, at 8%, work in jobs that do not require those abilities.

According to the Business Technology Report 2021, the COVID-19 pandemic has accelerated technology adoption within companies, increasing the demand for skilled employees. Accounting firm CPA Australia finalised the report by surveying 725 accounting and finance professionals from Malaysia, Singapore, Australia, Hong Kong, China and Macau. The businesses reviewed had over 1,000 employees, and the answers in the study came from C-suite executives or managers.

Of the 155 respondents from Malaysia, 84.5% believe implementing technology will help operational efficiency. Some of the software used in the prior 12 months included CRM, ERP, business and artificial intelligence, visualisation and data analytics. At the same time, 95.9% of Malaysian companies also reported using new payment technologies.


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The most significant challenges listed by businesses regarding technology adoption involved cybersecurity, financial barriers, data privacy and an inadequate digital talent pool. Specifically, 36.8% chose the shortage of tech talent in Malaysia, while 54.8% pointed to a lack of money as a central barrier to technology uptake. Another 29.7% cited concerns over the limited digital knowledge at the board or senior level.

Boosting the technology talent pool

In the past 12 months, 43.3% of all the respondents in the report undertook upskilling projects to boost their employees’ tech skills. 45.7% of high-growth businesses developed a long-term technology strategy, while 24.6% opted to recruit knowledgeable workers.

As for Malaysia, several companies are filling the technological gaps and confronting the shortage of skilled employees in the digital space. 

Redbeat Academy

AirAsia Digital collaborated with Google to open the Redbeat Academy to upskill, train and mentor employees to be tech-ready. The school offers affordable, accessible instructor-led and on-demand courses. Its goal is to enhance the digital economy in Malaysia by providing tech, innovation and leadership resources and knowledge.

Forward School

Southeast Asia’s Forward School is the next step in tech advancement in the region in terms of future skills. It has an up-to-date syllabus created by seasoned digital experts to prepare industry-ready employees for the workplace.

Malaysia Digital Economy Corporation (MDEC)

The Digital Skills Training Directory is a series of online courses endorsed by the Malaysia Digital Economy Corporation (MDEC). It provides companies with training tools to upskill and reskill employees. Available study programmes include cybersecurity, data science, animation and game and software development.

Impact of Malaysia’s 5G Rollout

In July, the Malaysian government awarded a $2.6 billion USD contract to Sweden’s Ericsson to build its 5G network. This deal brings faster connectivity and enhances mobile phone connections, which will help bridge the digital divide in the marketplace. 

Moreover, the 5G infrastructure will create thousands of jobs, boosting the economy.

Even so, new technology will further increase the demand for tech-skilled workers in a country that is scrambling to meet the challenge quickly. Fortunately, Ericsson will partner with the government to create an Innovation Lab, encouraging 5G-technology adoption and use.

Post-pandemic recovery

The World Economic Forum’s Future of Jobs Report 2020 explores several ways that Malaysian companies are responding to skill challenges. First, from the share of businesses surveyed, 86% plan to upskill their employees. Other strategies include automation, recruitment, outsourcing, firing unskilled workers and using temporary hires and freelancers to meet the talent shortage.

COVID-19 has also played a role in the methods companies are choosing. From the respondents, 58.3% are accelerating their digitisation of upskilling and reskilling, while 33.3% are speeding up the implementation of skill training programmes. McKinsey’s latest Global Survey shows that 69% of companies are training their employees more now than they did before the pandemic.

The shortage of tech talent in Malaysia could hinder its progress as the Asia-Pacific (APAC) region continues to lead the world in digital transformation.

Assuming that solely focusing on digitisation will solve employee talent shortages is a risky strategy. While recruitment can bring workers with digital skills, human resource departments may improve by upskilling their staff capabilities. The goal should be to pair well-trained people with technology rather than replacing them.

Talent shortages could cost Malaysia $6.10 billion USD by 2030, according to a Korn Ferry survey. The Malaysia tech talent crunch can be resolved, but it will require companies to focus on workforce planning, ability review and training to address knowledge gaps. Moreover, the government should invest and improve its education systems, specifically secondary and tertiary education, to address the skill imbalances in the professional sector.