03/06/2025

BIZ & FINANCE TUESDAY | JUNE 3, 2025

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Why Malaysian companies are losing talent and how to fix it?

IN today’s digital-first economy, talent is not just important, it’s everything. As businesses across Malaysia face increasing pressure to embrace new technologies and meet evolving customer demands, the strength and adaptability of their workforce have become mission critical. Yet, a growing concern has emerged: 40% of Malaysian employers say they are struggling to retain employees due to significant skill gaps. Many of these gaps are tied to the digital transformation sweeping through industries, and the issue goes deeper than a lack of technical training. Often, companies don’t even know what skills they should be focusing on, which makes it nearly impossible to build effective development plans. Former human resources minister V. Sivakumar highlighted in 2023 that up to 4.5 million Malaysians could face job losses by 2030 if they do not enhance their skills, particularly in response to the rise of artificial intelligence and automation. This uncertainty presents a serious challenge. Without clear visibility into the strengths and weaknesses of their workforce, many companies risk being left behind. Rapid innovation is now the standard, not the exception, and organisations that fail to keep pace may find themselves unable to compete. Fortunately, the solution lies not in guesswork or generic Malaysia attracted RM278 billion (US$62.8 billion) in digital investments from 2021 to 2024 – of which RM184.7 billion were data centre-related. At the core of this transformation is the aim to ensure that the development of the sector brings maximum benefit to Malaysians – creating jobs, attracting knowledge-intensive investments, and maintaining public confidence in the sector’s long-term potential. Malaysia aspires to move beyond its identity as a trading nation to become a technology nation, and the data centre sector could serve as a vital catalyst in the transition into a data hub. A whole-of-value-chain approach is being adopted to ensure that the sector grows in a financially and environmentally sustainable manner, while supporting a robust service ecosystem, the development of local technologies, and strong linkages to renewable energy. Knight Frank SEA-5 Data Centre Opportunity Index ranked Malaysia top in the Southeast Asia data centre sector for two consecutive years

survival strategy. Skills that were in high demand just a few years ago are quickly becoming obsolete, replaced by new competencies in areas like artificial intelligence, cybersecurity, digital marketing, and automation. Yet many organisations continue to rely on outdated or broad training programmes that don’t address the actual needs of their teams. For instance, if data shows that employees are consistently underperforming in areas related to digital communication or project management, a company can respond with focused learning modules tailored to close those specific gaps. At the same time, leadership teams can monitor progress over time, identifying high performers, potential mentors, and areas where further support is needed. This creates a culture of accountability and growth, where learning is not just encouraged but strategically integrated into everyday work. This is where solutions

engagement Businesses personalised

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training modules, but in the power of people and behaviour analytics, a smart, data-driven approach to talent development. Turning data into development People analytics refers to the practice of collecting and analysing employee data to inform strategic decisions about hiring, development, engagement, and performance. When combined with behaviour analytics, businesses have the opportunity to gain a holistic understanding of their workforce. This allows them to design learning strategies that are tailored, relevant, and aligned with business goals. Building upon this integrated approach, organisations that effectively leverage people analytics experience a 25% increase in business productivity and a 50% reduction in attrition rates. Furthermore, a study by the Society for Human Resource Management (SHRM) found that companies utilising HR data analytics saw a 21% boost in productivity and a 22% decrease in turnover. These statistics underscore the tangible benefits of data-driven strategies in enhancing workforce performance and retention. By combining insights from people and behaviour analytics, this targeted approach ensures that each employee’s learning journey is relevant, which not only improves learning outcomes but also increases

quizzes and surveys, companies gain a detailed picture of how their employees are progressing. These insights allow leaders to make informed decisions about where to invest in training, which skills to prioritise, and how to align employee development with long-term business strategies. Building future-ready skills with data-driven clarity People and behaviour analytics offer Malaysian companies a clear, data driven path to building a future-ready workforce. By identifying current capabilities, forecasting future skill needs, and aligning training with business goals, organisations can ensure their development efforts deliver real impact. This not only improves performance and innovation but also reinforces a culture where employees feel recognised and supported in their growth. Crucially, these benefits are accessible to businesses of all sizes. For Malaysia’s many SMEs, even simple analytics tools can lay the groundwork for smarter talent development and long-term success. As companies continue to navigate digital transformation, embracing analytics will be key to staying competitive, resilient, and future focused. This article is contributed by OpenAcademy co-founder and managing director Celine Ting ( pix ). said the increasing maturity of Malaysia’s data centre industry opens new doors for local manufacturers to scale up and support sophisticated project demands. “Mida’s proactive engagement and supply chain initiatives are crucial for aligning local players with international standards and investor expectations. A clear framework can further strengthen this by mapping capabilities and creating synergy across the ecosystem. “A well-structured directory that categorises supply chain readiness and standards would help align local manufacturers with global demand. When investors see a cohesive, quality-driven ecosystem, they gain the confidence to scale their operations in Malaysia,” he said. Recognising the urgency to embed sustainability and ensure investor confidence, the Ministry of Investment, Trade and Industry has introduced the Guideline for Sustainable Development of Data Centres to steer the sector towards global best practices. “These guidelines offer a structured pathway for investors to meet international best practices and qualify for incentives under the Digital Ecosystem Acceleration Scheme – ensuring our data centre ecosystem is both competitive and future-ready,” Sikh Shamsul said. – Bernama

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learning and development programmes that not only align with organisational goals but also foster a more engaged and efficient workforce. In this direction, employees are more likely to stay and grow in organisations that recognise their individual potential and invest in the right areas. Using learning data to drive strategic workforce development

The importance of upskilling cannot be overstated. In a business environment where change is constant, continuous learning has s h i f t e d f r o m

being a luxury to a

like OpenAcademy play a transformative role. OpenAcademy empowers employers to turn learning insights into real, measurable action. By tracking course completion rates, engagement metrics, and

knowledge retention through

Malaysia taps data centres for sustainable growth KUALA LUMPUR: Malaysia’s emergence as a regional data centre powerhouse is already evident, but the nation’s next bold step lies in ensuring that this digital infrastructure boom delivers meaningful economic multipliers across industries and communities. (2023-2024). In supporting these efforts, the Malaysian Investment Development Authority (Mida) is committed to ensuring that the growth of Malaysia’s digital economy – particularly the rapid expansion of data centres – translates into tangible benefits for local companies. 2025 hosted by Mida on May 8. Data Centre Nexus 2025 is designed with a strategic shift in focus – from attracting investments to fostering collaboration, strengthening Malaysia’s local supply chain, and addressing critical gaps within the data centre ecosystem to drive long term economic impact.

tion as a digital investment hub has directly translated into new project opportunities and strategic partner ships for data centres. “As a Malaysian-based global heating, ventilation, and air conditioning (HVAC) manufacturer, Dunham-Bush has seen a marked increase in demand for our precision cooling and energy-efficient climate solutions, particularly tailored for mission-critical infrastructure like data centres. “This demand surge has allowed us to expand local manufacturing capacity, invest in research and development, and create skilled jobs, reinforcing Malaysia’s position as a centre for high-value data centre HVAC solution providers,” he said. Kong noted that there is immense value in deeper collaboration with Mida, particularly in aligning local capabilities and technologies with the evolving needs of global investors for data centres. Creating synergy among local players As demand for data centres in Malaysia grows steadily, players across the ecosystem are recognising the need for coordinated frameworks that guide local supply chain players scaling up their capabilities. Maytech Cleanroom Manufacturing Sdn Bhd general manager Ng Wei Lin

The goal is not only to build investor confidence in local manufacturers’ ability to deliver within Malaysia, but to elevate their capabilities to a level where they can compete and thrive globally. By strengthening supply chain readiness and aligning with global standards, Malaysia aims to build local champions who can support domestic data centre development and export their products and services internationally. It also explores policy enablers for digital transformation and champions cloud adoption as a catalyst for innovation and economic resilience. The government is also working to prevent speculative overbuilds of data centres that could lead to unhealthy competition for energy and land, thus maintaining market balance and long-term sustainability. Industry players rising to the challenge Dunham-Bush Industries group general manager Kong Wai Yong said the country’s growing reputa

Mida CEO Datuk Sikh Shamsul Ibrahim Sikh Abdul Majid highlighted that the goal is not only to host global infrastructure, but to cultivate a robust domestic supply chain that can support and scale with it. “Malaysia’s aspiration goes beyond being a regional data hub. We are enabling long-term economic multipliers through strong policy coordination, localisation of supply chains, and technology partnerships that benefit Malaysian businesses.” “The country’s data centre market is projected to grow from US$4.04 billion (RM17.3 billion) in 2024 to US$13.57 billion by 2030, driven by a 22.38% annual growth rate,” he told Bernama in an exclusive interview. Strengthening the ecosystem According to Sikh Shamsul, efforts to strengthen the data centre ecosystem include business matching sessions between multinational companies and local vendors via supply chain pro grammes such as Data Centre Nexus