Hiring the right people in Malaysia can feel like an uphill battle—long wait times, high costs, and the struggle to find the perfect fit. With competition fiercer than ever, businesses need a smarter way to recruit top talent. According to Malaysian Industrial Development Finance (MIDF) Berhad’s projections, Malaysia’s unemployment rate is expected to remain stable at an average of 3.2% in 2025, yet over 56% of employers reporting a shortage of talent with the necessary technical skills, particularly for advanced technology roles. Hence, INFINITY8 is ready to provide comprehensive solutions to recruiting challenges and help businesses overcome issues in recruitment and selection efficiently.
Here are 8 common recruiting challenges, and INFINITY8’s solutions to overcome them:
1. Talent Shortages
Challenge:
One of the biggest challenges in the recruitment industry is the shortage of skilled talent, especially in sectors like IT, engineering, and finance. For example, Malaysia’s booming digital economy has led to an increasing demand for IT professionals, yet companies struggle to hire experienced software developers, cybersecurity specialists, and data analysts. Major tech firms and startups alike compete fiercely for talent, with companies like Grab and AirAsia Digital continuously seeking skilled programmers to drive their digital transformation.
Similarly, the engineering sector faces a critical talent shortage, particularly in industries like construction, oil and gas, and manufacturing. For instance, large-scale infrastructure projects such as the Penang Transport Master Plan require highly skilled civil and mechanical engineers, but companies often find it difficult to fill these roles. In the electrical and electronics (E&E) industry, Malaysia’s status as a semiconductor hub has increased the demand for engineers specializing in chip design and automation, with global players like Intel and Infineon expanding their operations in the country.
According to the Department of Statistics Malaysia (DOSM), Malaysia’s unemployment rate remains low, meaning fewer job seekers are available, making it even harder for companies to attract and retain top talent in these high-demand industries.
Solution:
INFINITY8’s talent solutions leverage an extensive talent pool and advanced hiring tools like an Applicant Tracking System (ATS) to streamline recruitment. By integrating automated systems for resume screening, interview scheduling, and candidate shortlisting, INFINITY8 reduces time-to-hire, allowing businesses to fill vacancies quickly with qualified professionals. This efficient approach has helped companies in diverse sectors, overcome recruitment challenges and secure top-tier talent rapidly, minimizing hiring delays and improving retention rates. Success stories include Property Guru, BMW Financial Services, etc.
2. High Competition for Talent
Challenge:
With the rise of multinational corporations (MNCs) in Malaysia, SMEs struggle to attract top talent, as many job seekers gravitate toward well-known global brands that offer competitive salaries, structured career progression, and attractive benefits. For instance, tech giants like Microsoft, Google, and IBM have expanded their presence in Malaysia, drawing top graduates and professionals with lucrative compensation packages and opportunities to work on cutting-edge projects.
Without the resources to match MNCs in terms of salary and benefits, and talented candidates prefer the security and prestige of working for larger corporations, many SMEs face high employee turnover and problems with recruitment, further hampering their growth and competitiveness in Malaysia’s job market.
Solution:
INFINITY8 positions SMEs as attractive employers by emphasizing career growth, company culture, and flexibility. They craft employer branding strategies that help businesses stand out in a competitive job market. For instance, by offering tailored recruitment solutions and streamlining hiring processes, they ensure SMEs highlight unique work environments and growth opportunities. This approach has helped companies in various sectors, including tech startups and SMEs in the service industry, attract and retain top talent, competing successfully against larger firms.
3. Rising Hiring Costs
Challenge:
Hiring costs in Malaysia are increasing due to rising salaries, leading to challenges in recruitment and selection for businesses. In the tech sector, for example, salaries for software engineers and data analysts have surged due to high demand, with companies like Grab, Shopee, and even international firms offering competitive pay to secure top talent. According to recruitment reports, an experienced software developer in Malaysia can now command a salary of RM8,000 to RM15,000 per month, making it costly for SMEs to compete for skilled IT professionals.
Similarly, in the engineering field, companies in industries such as construction, oil and gas, and manufacturing face growing wage expectations. For instance, civil engineers working on major infrastructure projects like the East Coast Rail Link (ECRL) and the MRT3 Circle Line expect higher compensation due to the complexity and scale of these developments. The shortage of skilled engineers further drives up salaries, with some mid-level professionals earning RM10,000 or more per month.
Solution:
INFINITY8 provides cost-effective recruitment solutions by leveraging digital tools, AI-powered screening, and bulk-hiring strategies, helping businesses reduce recruitment costs without sacrificing quality. Their success stories include assisting companies across various industries by streamlining hiring processes, allowing for faster placements and reducing operational costs. For example, their AI-driven systems optimize candidate matching, while bulk hiring strategies cater to businesses scaling up quickly, such as during a product launch or expansion. This combination of technology and efficiency leads to higher-quality hires at a lower cost for businesses.
4. Compliance and Legal Issues
Challenge:
The problems in recruitment and selection are further complicated by Malaysia’s strict labour laws, including regulations on foreign workers and data privacy, for example, Employment Act 1955, Industrial Relations Act 1967, Minimum Wages Order 2022, Personal Data Protection Act (PDPA) 2010, Employment (Restriction) Act 1968 & Immigration Act 1959/63. Failure to comply can result in legal penalties.
Solution:
INFINITY8 ensures full legal compliance by staying updated with employment regulations. Services include providing legally compliant employment contracts and hiring documentation, ensuring adherence to the Minimum Wages Order to avoid salary disputes, implementing secure Applicant Tracking Systems (ATS) to manage candidate data while complying with PDPA, and advising on foreign worker hiring and legal requirements.
5. Skills Mismatch
Challenge:
Many job seekers in Malaysia lack the necessary skills for available positions, creating significant challenges in recruitment and selection. This skills gap is particularly evident in the IT sector, where companies are actively seeking professionals in areas such as cybersecurity, artificial intelligence (AI), and data analytics. However, many graduates from local universities lack hands-on experience with industry-standard programming languages and cybersecurity tools. For instance, Bank Negara Malaysia reported an increasing demand for cybersecurity experts to protect the financial sector from cyber threats, yet companies struggle to find local talent with certified skills in ethical hacking and cloud security.
According to TalentCorp Malaysia, this skills gap extends beyond technical fields. The manufacturing and services sectors also face shortages of workers with digital skills, such as automation and supply chain analytics. As industries continue to evolve with digital transformation and Industry 4.0, businesses are finding it increasingly difficult to recruit candidates with the right mix of technical expertise and practical experience, further widening the gap between job market demand and workforce readiness.
Solution:
INFINITY8’s AI-driven analytics and competency-based assessments have helped businesses in Malaysia align candidates’ skills with job requirements, minimizing recruitment challenges. Through their skill-matching solutions, they ensure the right talent is placed in roles that fit both the job’s needs and the candidates’ abilities. For example, by leveraging AI to automate screening and job matching, companies can significantly reduce time-to-hire and ensure better job satisfaction and retention, addressing recruiting challenges like mismatched expectations and high turnover.
6. Lengthy Hiring Processes
Challenge:
A slow hiring process in Malaysia can cause businesses to lose top candidates to competitors, especially in industries where skilled talent is in high demand. Delayed decision-making, poor screening methods, and manual recruitment systems often result in candidates accepting offers elsewhere before companies can finalize their hiring process.
For instance, in the healthcare industry, private hospitals such as Sunway Medical Centre and Pantai Hospital Kuala Lumpur compete for skilled nurses and medical specialists. However, public hospitals and smaller clinics often face long bureaucratic hiring procedures, causing them to lose experienced healthcare professionals to private institutions that offer quicker recruitment timelines and better salary packages. Many Malaysian nurses, frustrated by slow hiring processes and limited career growth locally, have even chosen to work overseas in countries like Singapore and Australia.
Without a fast and efficient hiring process, businesses across different industries risk losing qualified candidates to competitors who can offer quicker recruitment, better engagement, and more streamlined selection methods.
Solution:
INFINITY8’s Applicant Tracking System (ATS) automates critical stages in the recruitment process, such as candidate screening, shortlisting, and interview scheduling. This streamlining significantly reduces hiring time, allowing businesses to secure the best talent before competitors. For example, INFINITY8 has successfully helped companies such as UQPAY, CIMC and MY Business Advisory, rapidly fill key positions, ensuring that businesses can respond quickly to market needs. By leveraging advanced ATS technology, clients experience enhanced efficiency and a smoother recruitment flow, improving talent acquisition outcomes during competitive hiring periods.
7. High Employee Turnover
Challenge:
Retention is one of the biggest challenges for recruiters in Malaysia, as many employees leave within the first year due to mismatched job expectations, lack of growth opportunities, or cultural misfits. In the retail and hospitality industry, cultural misfit is a common reason for high turnover. International retail chains like Uniqlo and Sephora Malaysia invest heavily in employee training, but some workers leave early due to strict company cultures or demanding customer service roles. Similarly, in the hospitality sector, luxury hotel chains like Marriott and Shangri-La struggle with retaining young employees, as many entry-level workers find the fast-paced environment too stressful or move to industries with better work-life balance.
Solution:
INFINITY8 focuses on long-term talent retention by ensuring candidates align with a company’s culture and growth opportunities. For example, helping clients in industries to not only recruit qualified employees but also integrate them into teams where they can thrive. INFINITY8’s employee engagement strategies, which include clear career progression plans and regular feedback loops, reduce turnover rates by fostering an environment where employees feel valued and supported. These approaches have led to improved job satisfaction, creating more stable and productive workforces.
8. Economic Uncertainties and Workforce Flexibility
Challenge:
During economic downturns, businesses in Malaysia struggle to maintain a stable workforce as they face the challenge of scaling up or down quickly based on market conditions. For example, during the COVID-19 pandemic, many companies in the tourism and hospitality sector had to quickly adjust their staffing levels. With travel restrictions and social distancing measures in place, these businesses faced significant revenue losses, forcing them to downsize their workforce. On the other hand, as the economy began to recover, they needed to quickly hire back employees or recruit new talent to meet the surge in travel demand.
The ability to scale the workforce quickly—either by hiring new employees or letting go of others—often leads to recruitment challenges for businesses across different sectors in Malaysia. Companies that are unable to accurately predict market trends and adjust their recruitment strategies quickly enough often face high turnover, inefficiency, and loss of productivity during economic downturns.
Solution:
INFINITY8’s Employer of Record (EOR) services have helped businesses stay agile by allowing them to hire remote or contract workers without long-term commitments. For example, companies facing fluctuating market conditions or economic downturns can rely on INFINITY8 to onboard employees quickly and manage payroll without establishing a local presence. This approach has been particularly beneficial for startups and SMEs in Malaysia, enabling them to scale up or down efficiently. The flexibility provided by the EOR service supports businesses in navigating uncertainties while remaining responsive to economic changes.
Conclusion
The challenges in the recruitment industry are evolving, requiring businesses to adopt smarter hiring strategies. INFINITY8 addresses these recruitment challenges with innovative solutions, from ATS automation to employer branding and legal compliance.
If your business is facing recruiter challenges or problems in recruitment and selection, partnering with INFINITY8 ensures a seamless, cost-effective, and legally compliant hiring process.
For more information, visit INFINITY8’s website or contact us at +6018-969 0047 to get a FREE consultation with INFINITY8 Recruitment experts and enjoy 30% off your first placement!
