00:00Malaysia is entering 2026 with a major shift in the way companies recruit talent and contract hiring is taking center stage.
00:09According to Robert Walters, a latest salary survey, 61% of organizations plan to hire for contract roles next year,
00:17signalling a structural transformation of the labor market as businesses navigate cost pressure, talent shortages and rising demand for specialized skills.
00:25Robert Walters, Malaysia Country Manager Gan Hua Chun says this transition is not just a temporary reaction,
00:32but a long-term strategy that is redefining how organizations build and scale their workforce.
00:39So I think a lot of organizations are looking at cost optimization.
00:42So when they look at cost optimization, workforce planning comes first into mind.
00:47So essentially when they're doing their workforce planning, they want to identify contractors to kind of take on short-term projects that they are currently embarking on.
00:55So this will then help with manpower planning to make sure that they don't over-hire certain employees.
01:02So that's been the main drive for the rise in contract hires.
01:06We also see trends where employees need maternity coverage on short-term assignments where they have employees going on short-term maternity coverage,
01:17and that's where contract hires are also in demand at the moment.
01:20Professionals too are embracing the shift.
01:25With 78% of workers open to contract opportunities under the right conditions, Gan views the shift as a positive development.
01:33He said contract work is especially valuable for those seeking flexibility, career transitions or specialized project-based exposure.
01:41So I think when it comes to attracting talents to take on contracting positions, the first one they look is obviously at the salary.
01:49So contractors do get paid a slight premium when it comes to taking on a contract position because it's short-term.
01:56Contractors are also allowed to then explore skills that they're not particularly familiar with, something that they want to try.
02:03For example, if you're doing a data role and you want to go into, for example, a little bit more into focus on data engineering.
02:12So there's opportunity to try different skill sets from an employee point of view.
02:18And that's how the contracting is attractive to employees.
02:25With contract hiring becoming more mainstream, Gan believes the shift will ultimately strengthen the job market.
02:31While competition for talent may intensify, the rise of flexible roles will drive skills development and improve workforce productivity.
02:42So I think when it comes to contracting, a lot of the main focus of employees is that they are worried about stability.
02:50But if you look at the labour market right now, attrition rate for organisation hovers around between 15% to 20%.
02:56So whether you're in a permanent job or a contract job, you may leave if the job is not suitable for you.
03:02So that's the mindset shift that a lot of candidates are having now, right, that a contract job has no stability.
03:08But actually a contract job is actually an opportunity for them to try a new skill or learn something new, right, pick up a new habit, for example.
03:16It's also good to know that, for example, for returning mothers or people who have been out of the workforce for quite some time and they struggle to find a permanent role.
03:27Contracting is now an option for them to explore because it gives them an option back into the workforce to build up their skills again and then go back into hopefully permanent employment.
03:37This shift is happening alongside rapid digital and AI adoption.
03:43As AI-driven projects roll out in phases, companies are bringing in short-term specialists such as data scientists, AI engineers and domain experts to fill immediate gaps.
03:55Gantt says the strongest demand for contract hiring is emerging in the technology sector, followed by human resource, finance and marketing functions across industries.
04:05But challenges remain, especially as salaried expectations between employers and candidates continue to diverge.
04:13Most job seekers want 16% to 25% pay increases when switching roles, while only 27% of companies are willing to offer that.
04:23Gantt notes that companies can no longer rely on pay alone.
04:26Instead, they must strengthen their employer branding, streamline hiring processes and offer meaningful flexibility.
04:33Beyond pay, professionals now prioritise flexibility and work-life balance, while employers continue to emphasise bonuses and medical benefits.
04:43As Malaysia heads into 2026, labour market is expected to remain resilient, supported by a surge in digitalisation, accelerating AI adoption and growing momentum in the green economy.
04:56So I think when it comes to Malaysia's labour market or employment rate, the labour market remains fairly stable, it's quite resilient.
05:06If you look at the employment rate for 2025, it's at 3%, and we see that number will go into the same as of 2026.
05:14When it comes to latest trends, I think there's been a big talk about AI, so digitalisation is quite a big topic right now.
05:21A lot of organisations are going through digital transformation, and at the same time, there's also a focus on green energy, sustainability.
05:30If you look, there are a lot of EV cars on the road now, so energy consumption is also a big market.
05:35So these are some of the latest trends when it comes to the employment market for 2026, and this is where we see quite a lot of demand for talents.
05:45When it comes to traditional talents, we are also looking at tech as quite the main factor in terms of hiring for talents in Malaysia.
05:54There's demand for candidates or talents who are data literate, who basically can translate what AI is telling us to help business make decisions.
06:04And I think these are quite highly sought-after talents, as they are able to use relevant data to then help business make business decisions.
06:14And recently also, Parliament has approved the 2025 gig worker bills, which has then led to a rise in contract hiring for talents,
06:24as they are now entitled to benefits such as EPF and SOXO, and other similar benefits that the permanent employees are entitled to.
06:34So there's quite a lot to talk about.
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