Kuala Lumpur, January 16, 2025 – The Federation of Malaysian Manufacturers (FMM) notes the recent announcement by the Ministry of Human Resources requiring companies to hire up to three interns for every expatriate employed. While the policy aims to address the underemployment of graduates and youth, its implementation poses practical challenges, particularly for the manufacturing sector.
The manufacturing industry is undergoing rapid transformation driven by the Fourth Industrial Revolution (IR 4.0), necessitating the immediate filling of vacancies with skilled talent. The urgency to meet production demands makes it impractical to rely solely on internship programmes to bridge these gaps.
Instead, FMM advocates for a “place-and-train” system, such as apprenticeship schemes which has proven effective in generating interest among interns for long-term careers in the manufacturing sector. This approach allows interns to gain hands-on experience, aligning their skills with industry requirements while addressing immediate workforce shortages.
In fact, FMM has repeatedly called on the Government to set up the National TVET Apprenticeship Fund with an initial seed fund of RM100 million provided by the Government and subsequently sustained through the channelling of 60% of the foreign worker levy collected towards the Fund. This initiative is critical for building the TVET and skilled talent pool essential to supporting the rapid transformation of the industry and achieving the ambitious goals outlined in the New Industrial Master Plan 2030. By providing financial incentives and resources, the fund would enable companies to develop robust and structured internship and apprenticeship programmes. Furthermore, by subsidising training costs and offering targeted grants, the fund would significantly enhance industry participation in workforce development, particularly in the areas of TVET and skilled talent.
More importantly, FMM wants to emphasise that this new policy should not exacerbate the already somewhat challenging process of applying for expatriates. A more balanced approach is essential, where the policy complements rather than complicates the expatriate hiring framework. Expatriates are essential to the manufacturing sector, bridging skill gaps with specialised expertise, driving innovation, and providing strategic leadership. They ensure knowledge transfer, integrate advanced technologies, and align operations with global standards, enabling Malaysian manufacturers to remain competitive and innovative.
Call for Lifting the Freeze on Foreign Workers
FMM also calls for the lifting of the freeze on foreign workers through the Multi-Tier Levy Mechanism and urges the government to expedite its implementation. To address immediate workforce needs, FMM recommends that the Ministry of Home Affairs prioritise lifting the freeze for:
- Workers who were already approved and ready to travel but were unable to meet the 31 May 2024 deadline due to administrative delays; and
- The intake of new foreign workers across industries experiencing critical labour shortages, including manufacturing.
By prioritising workers who are ready to travel and expediting the approval process for new foreign workers, the manufacturing sector can rapidly address labour shortages and meet production demands, particularly as industries ramp up operations post-festive season. The availability of foreign workers is critical to maintaining productivity levels, fulfilling customer orders, and safeguarding Malaysia’s global competitiveness.
FMM emphasises the need for clear guidelines, faster approvals, and simplified processes to ensure timely deployment of foreign workers. These measures are vital to maintaining production continuity and meeting the demands of domestic and international markets.
Looking Ahead
FMM stresses that balancing workforce policies with practical industry needs is essential to achieving Malaysia’s economic growth objectives. Collaborative efforts between the government, manufacturers, and other stakeholders are crucial in crafting policies that support workforce development while maintaining the sector’s operational efficiency.
We urge the Ministry of Human Resources to engage with the manufacturing sector to refine the intern hiring policy and provide greater clarity on the Multi-Tier Levy Mechanism. These measures will enable manufacturers to plan effectively, hire the talent necessary for their operations to take on new orders confidently, and continue driving Malaysia’s economic recovery and long-term growth.
Tan Sri Dato’ Soh Thian Lai
President, Federation of Malaysian Manufacturers
