Millennials & Gen Z to make up more than 70% of Malaysia's workforce by 2025: Survey

In 2023, industries such as banking, tech, and insurance, to name a few, hired the highest number of Millennial and Gen Z employees.

The Gen Z workforce in Malaysia has seen rapid growth since 2020, recording a 50% year-on-year increase in terms of percentage of the total workforce. By 2025, Millennials and Gen Z could form more than 70% of the workforce in the country, according to WTW's compensation survey released today (Monday, 8 January 2024).

The survey findings revealed that in 2023, the following industries hired the greatest number of Millennials and Generation Z employees:

1. Banking
2. Insurance
3. Tech
4. Media & gaming
5. Shared services & outsourcing

While this is so, Malaysia’s corporate workforce faces three possible challenges in growing its Gen Z population. These include:

• Young talents seeking opportunities abroad (e.g., to Singapore and the Middle East);
• Setback in education by two years due to the pandemic impacts and the accelerated career options fueled by technology, and
• Constant lookout for new positions by the same pool of younger workers to satisfy their needs for flexibility, control over their own destiny and scalability of earning through their own efforts and finding work that provide a sense of purpose.

In that vein, as affirmed by Tan Juan Jim, Head of Work & Rewards, Southeast Asia and Malaysia, WTW, the traditional employment model is losing its inevitability as employees are now exposed to passion economy.

“In the context of the passion economy, where job security is no longer the primary focus, understanding the emerging group of Gen Z employees becomes paramount.

"Organisations that move towards providing greater work flexibility, including offering a choice of remote, onsite or hybrid working will attract and retain more talent," Tan added.

Survey findings reveal Malaysia pay raises to remain high in 2024

With the younger generation entering the workforce, employers need to have a better understanding to meet the needs and wants of their employees.

To do so, employers must rethink job scopes, total rewards and redefine careers to win the talent war and encourage fresh blood to join their organisation.

The survey findings revealed that the country’s pay raises are expected to remain high in 2024, with a projected overall salary increase of 5% for executives, management and professional employees, and support staff.

The breakdown of the projected pay raise is as follows:

Tan commented: “Voluntary turnover and attrition continue to increase and reaches a high of 18.5% in 2023 compared to 16.5% in 2022.

“This trend looks set to continue in 2024.

“Employers in Malaysia will continue to face significant talent challenges including the attraction and retention of key talent,” he added.

READ MORE: Regions in Asia with the highest and lowest English proficiency: 2023 Index

Infographics / Provided by WTW 

Lead photo / 123RF