DRIVEN by competitive operating costs, strong infrastructure, and a strategic location, Malaysia is now the destination-of-choice for global firms seeking expansion in the region.
The influx of capital and rapid pace of digitalisation are creating an urgent need for specialised skills that outpaces the current supply, resulting in talent scarcity, according to Randstad Malaysia’s 2026 Market Outlook & Salary Guide Report.
For Malaysia to achieve its long-term goal of transitioning from a manufacturing-led economy to a high-value, knowledge-driven nation, companies will need to step up to equip local talent with skills in critical domains such as Industry 4.0 automation, AI, and cybersecurity.
“Malaysia’s ambition to evolve into a high-value economy is challenging employers to rethink their talent strategies,” commented Randstad Malaysia country director Fahad Naeem.
“The pace of growth has created a demand for specialised skills which is resulting in acute talent scarcity, particularly in highly-technical and specialised roles emerging from digital transformation initiatives.”
The report, which involved 982 respondents in Malaysia, highlights nine actors pivotal to Malaysia’s economic growth in 2026, namely accounting & finance, construction & property, human resources, legal, life sciences & healthcare, manufacturing, sales & marketing, shared services and technology.
These industries are experiencing varying degrees of skill shortages but share a common need for agility and innovative talent management.
The shift towards an agile and flexible workforce
To respond swiftly to market demands and maintain operational resilience, more Malaysian companies are adopting flexible workforce models that include both permanent and contract employees.
Contract roles have evolved from being a ‘fallback’ option to a strategic solution, especially in project-driven sectors like shared services, construction, and technology.
According to the survey, 27% of Malaysian job seekers are willing to accept contract roles, viewing these as opportunities to accelerate their career development through diverse exposure and learning experiences.
Gen Z employees are the solution to talent scarcity
Gen Z, recognised widely as a key driver of talent scarcity, offers both a challenge and a solution to employers. Faced with an ageing workforce, many organisations are turning to Gen Z not only to fill immediate talent shortages and drive productivity, but also develop and upskill them for future succession within the industry.
While many organisations struggle to engage this demographic due to a persistent gap between academic training and practical skills, the report emphasises the importance of structured training and hands-on learning to bridge this divide.
Currently, 60% of respondents in Malaysia attribute their skill development primarily to on-the-job experiences, while 54% rely on formal corporate training programmes.
AI is also another avenue that talent looks to for upskilling, with 51% of respondents already using generative AI tools for learning and development at work.
Organisations that actively foster skill-building and career growth will be better positioned to attract and retain a motivated Gen Z workforce, said the survey.
AI adoption at work
The increasing adoption of AI and digital tools further transforms the talent landscape.
The report finds that 78% of employees already use generative AI for tasks such as content creation, email drafting, and reporting, underlining the significance of continuous upskilling in digital literacy and technical proficiency.
The 2026 Market Outlook and Salary Guide Report provides more information about emerging in-demand digital and AI skills across the different sectors in Malaysia, as organisations seek talent capable of effectively collaborating with AI technologies through strong analytical and logical abilities.
However, the survey also reveals that 13% of the workforce is hindered by corporate restrictions on AI use, creating a potential gap in skills that may push talent to seek employers offering greater exposure to AI-driven innovation.
“Our insights show that Malaysian employers can secure long-term competitiveness in the region by adopting holistic and agile approaches to talent management,” said Fahad.
“Investing in specialised skill development, flexible workforce solutions, and embracing the full potential of AI-powered learning will be crucial to navigate the opportunities and challenges of 2026.” ‒ Focus Malaysia
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