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More than 5,340 organisations have adopted flexible arrangements, with 62% reporting higher productivity and over 90% seeing improved engagement.
Malaysia’s Ministry of Human Resources (KESUMA) has welcomed a call by Prime Minister Anwar Ibrahim for the private sector to consider flexible working arrangements (FWAs) as a strategic response to current economic challenges, including the impact of the global supply crisis.
The ministry said the move aligns with the needs of an increasingly dynamic labour market, where organisations are required to adopt more adaptive, responsive, and productivity-driven work models.
KESUMA noted that FWAs, including hybrid work models, flexible hours, and other forms of workplace flexibility, can strengthen organisational efficiency while supporting employee wellbeing.
On that note, the ministry stressed that implementation should be carried out in a structured and phased manner, guided by clear frameworks. This includes compliance with Sections 60P and 60Q of the Employment Act 1955, as well as equivalent provisions under the Sabah and Sarawak Labour Ordinances. These provisions allow employees to apply for FWAs and require employers to respond in writing within a specified period.
Sharing early outcomes, KESUMA cited findings from TalentCorp’s flexible work initiative, which has been in place since 2021. To date, more than 5,340 organisations have adopted such arrangements, benefiting over 1.6mn employees.
Among employers, 62% reported increased productivity when flexible working was implemented in a structured manner. Meanwhile, 70% of employees reported higher job satisfaction, driven by greater flexibility in time and location.
More than 90% of organisations also recorded improved employee engagement, alongside a reduction in turnover rates of between 15% and 20%, it was added.
KESUMA said these findings show that FWAs not only support business continuity in challenging conditions but also contribute to stronger work-life balance and talent retention.
At the same time, the ministry emphasised that flexible working should not be used as a reason to reduce salaries or employee benefits, unless accompanied by a formal agreement involving changes to overall working hours. It added that such safeguards are important to ensure employee rights and welfare remain protected.
To support effective implementation, KESUMA encouraged employers particularly in the private sector to strengthen employees’ digital readiness. This includes equipping the workforce with practical, relevant skills in the use of digital tools, communication platforms, and task management systems.
Employers registered with HRD Corp are advised to utilise the human resource development levy to upskill employees in digital capabilities and collaborative technologies, in line with job roles and industry needs.
The ministry also highlighted psychosocial risks that may arise from FWA. Based on monitoring by the Department of Manpower Peninsular Malaysia (JTKSM) and the Department of Occupational Safety and Health (JKKP), identified challenges include stress and burnout, work-life imbalance, social isolation, and communication difficulties.
In response, KESUMA recommended that organisations implement clear work management practices, maintain empathetic communication, and ensure reasonable working hours. It also encouraged the provision of mental wellbeing support, including access to counselling services.
Employers may refer to the PRisMA 2024 guidelines issued by DOSH for managing workplace psychosocial risks, while employees can seek support through national helplines provided by the Ministry of Health.
Looking ahead, KESUMA said it will continue strengthening the implementation of FWAs through collaboration with its agencies. This includes assessing organisational readiness, conducting employer training and workshops, and facilitating more structured policy discussions.
When implemented effectively, it highlighted, FWAs can support business continuity while strengthening organisational resilience and safeguarding the wellbeing of the workforce.
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