2024 Human Resources Recruitment Trends in Malaysia

AI RECRUITMENT AND A BOOMING FUNCTION; EMERGING HUMAN RESOURCES TRENDS FOR MALAYSIA IN 2024

In a year headlined by local and international challenges affecting the economic outlook, businesses are exercising caution pertaining to growth and expansion. Spurred by a need to ensure operational continuity in a sustainable manner, leaders are revisiting recruitment and talent strategies in search of alternative solutions that enable their Human Resources teams to not just survive, but thrive.

We have discussed at length the challenges accountancy, finance and technology teams face when it comes to balancing budgets while securing essential talent to satisfy changing business requirements. But with a shifting eye on current trends, we found it pertinent to explore how teams closest to sourcing, hiring and managing employees currently fare in 2024.

For a better understanding of talent trends affecting Human Resources here in Malaysia, we spoke to Nawal Masri, Manager at Hays Malaysia with further insights on this evolving function from our Hays Asia Salary Guide.

While human resources teams around the region are experiencing challenges due to leaner budgets brought about by economic concerns, Malaysia is an exception. The talent acquisition space is experiencing growth as companies expand or shift services to Southeast Asia, aiming to reduce costs. Malaysia has emerged as a vibrant recruitment market.

"The Compensation and Benefits role remains highly sought after in HR, with many organisations incorporating initiatives around a more holistic rewards philosophies and benefits structure, including comprehensive insurance coverage and flexible working options," said Nawal. "However, the job to-candidate ratio remains uneven due to a shortage of candidates."

Even so, HR leaders were optimistic about sourcing HR candidates to maintian robust talent pipelines. 64% of respondents were confident in recruiting candidates with the skills needed to meet organisation's needs, higher than the 57% average for other industries.

OFFSHORING REPRESENTS AN OPPORTUNITY FOR HUMAN RESOURCES CANDIDATES

As business resort to offshoring various human resources functions to Malaysia in a bid to reign in escalating costs, candidates have seen thier choices widen, providing them greater bargaining power against prospective hiring managers seeking talented HR professionals locally.

Popular human resources functions for offshoring include payroll processin, recruitment, and training. These roles create more than direct job opportunities for candidates in Malaysia. They also provide a platform for cultural exchange that enhances understanding of a new market and exposes candidates to a more global business environment.

AI IN RECRUITMENT IS STILL BUDDING

While many are keen to harness the power of Generative AI in the workforce, this technology has not yet been picked up heavily for recruitment in Malaysia. 17% of employers in Malaysia surveyed currently use AI minimally throughout the recruitment process, while 30% are only looking to explore it in the coming year. 39% have no plans to use AI in their recruitment processes yet.

Usage to date has mostly been for a mix of automation and optimisation of various tasks. 54% of respondents use it for resume screening and shortlisting, 34% use it for candidate asssessment and ranking, while 31% use it to perform predictive analysis for candidate fit.

Additionally, while 83% of human resources personnel support the use of AI tools to help them perform their tasks at work, only 44% of them believe their organisations have embraced AI sufficiently to stay relevant in the future.

THERE ARE STILL GAPS TO IMPLEMENTING AI IN HR WIDELY

Understanding the barriers HR teams in Malaysia have with AI adoption is essential to formulating next steps. Only 46% of HR respondents in Malaysia felt they were sufficiently equipped or had a sense of how to acquire the required AI skills to succeed in their role in the next three to five years. 19% of respondents were unsure, while 35% disagreed or strongly disagreed with that notion.

Sentiments when it came to future upskilling were encouraging, however. 62% of HR professionals were confident that their employer would support them in developing the necessary skills for their role. HR leaders will want to explore pathways to upskilling to ensure that these expectations are met, especially if their organisations plan on introducing AI tools to their workforce.

When polled about the primary challenges faced when implementing AI, the top five factors that surfaced were as follows:

43% of human resources respondents were concerned about budget constraints
40% mentioned concerns about the lack of human touch and personalisation
38% cited difficulty integrating AI with existing HR systems and processes
31% were worried about data privacy and potential security concerns
31% perceived issues with IT implementation

Establishing the long-term cost savings and efficiencies of AI implementation will be crucual to the adoption of AI in recruitment. These solutions will need to include adequate technical support and any required infrastructure updates to support the integration. Upon roll-out, careful consideration should be applied to retaining human elements in the recruitment process.

We also wanted to discern which concerns stood out more for non-HR professionals compared to their HR colleagues to map out sentiments from both candidates and leaders who rely on HR to select quality candidates from interest pools.

Unlike their HR Peers, non-HR professionals ranked the understanding and interpretation of AI data and ensuring fairness and bias mitigation in AI algorithms within their top 5 key challenges for AI implementation in recruitment. 44% more non-HR professionals expressed concern regarding the former.

Cross-departmental support and training initiatives, effective communications highlighting AI benefits, and providing non-HR managers access to AI recruitment tools could also be beneficial to bridge these gaps and improve understanding.

As AI education grows more widespread among the populace, concerns regarding the ethical usage of AI tools in recruitment, especially for determining candidate employability, have naturally risen. 45% of HR professionals in Malaysia believe organisations should disallow the use of AI tools until there are sufficient regulations and ethical safeguards in place, while 14% remain unsure.

Businesses have a lot of ground to cover when it comes to AI policies. Only 26% of HR professionals acknowledged that their organisation or leader had issued an AI tool usage policy or provided guidelines on AI usage and restrictions for work. Addressing these concerns will be crucial to foster trust in hiring processes.