By G. Sharmila
The brain drain issue affecting Malaysia has been much talked about, yet the specifics of the problem remain very much a mystery. How large is the Malaysian diaspora? Where is Malaysian talent abroad located? Why do they leave in the first place? KINIBIZ explores these areas.
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“Malaysia faces an exodus of talent. Not only is our education system failing to deliver the required talent, we have not been able to retain local talent of all races nor attract foreign ones due to poor prospects and a lack of high-skilled jobs.” (NEAC, 2010a, p 60)
The above statement was cited in a World Bank report in 2011, titled “Malaysia Economic Monitor: Brain Drain”, clearly to illustrate a problem that Malaysia was facing at the time and continues to face even today.
But first, what is this thing called brain drain and why is it so detrimental to our nation?
Investopedia.com defines brain drain as “a slang term for a significant emigration of educated or talented individuals”.
According to Investopedia, a country is harmed in two ways: “First, expertise is lost with each emigrant, diminishing the supply of that profession. Second, the country’s economy is harmed as each professional represents surplus spending units. Professionals often earn large salaries, so their departures remove significant consumer spending from the country.”
At the time of writing, no current data is publicly available on the total number of Malaysian professionals who have left the country for greener pastures abroad and where they are located.
The most comprehensive reports on the brain drain issue have been by the World Bank, the most recent of which was published in June this year, titled “Improving The Effectiveness of TalentCorp’s Initiatives”.
The report stated that approximately half of more-than-300,000 Malaysians living in Organisation for Economic Cooperation and Development countries in 2010 had completed tertiary education or a higher level of study.
The report said that as a share of total emigration, the rate of tertiary educated migration has been stable over the past decade, falling slightly from 56.5% in 2000 to 54.5% in 2010 (see table).
The report also cited TalentCorp Malaysia saying in 2014 that one survey of the diaspora showed that nearly half of the respondents visit Malaysia three to five times a year, while 41% of them are members of a diaspora association – an indication of their interest in the country despite being abroad.
However, indication of interest does not indicate an interest to return to work in the country. So, what does motivate Malaysian talent to leave the country?
Sally Raj
According to Sally Raj, managing director of Robert Walters Malaysia, the talent drain stems from the promising opportunities being presented to Malaysians to study or further their education abroad.
“A majority are attracted by the chance of being in a more holistic and less academic education environment. Those graduate or further education programmes offered in our neighbouring countries are also perceived to be stronger. Most Malaysians end up staying in that country to gain overseas work experience where some of them progress to have very successful careers.
“Another major factor is the career development and growth opportunities presented to them outside of Malaysia. A lot of regional hubs and senior regional roles are based outside of Malaysia and many professionals aspire to work in a bigger environment with a more diverse job scope,” she told KINIBIZ via email.
“We are seeing this predominantly in the banking and financial services spaces, as well as professional services such as auditing and accounting firms. More specifically, the largest talent gaps are seen in corporate governance in functions such as risk and compliance.
“This is because the talent pool is very limited in Malaysia and there are a lot of economies outside of Malaysia which are more mature and developed in these functions, hence better opportunities for professionals,” she added.
The 2011 World Bank Economic Monitor report concurred with Sally somewhat. Through interviews the World Bank conducted in Malaysia, Singapore, and the US, it found that lower salaries in Malaysia as well as a lack of career and educational opportunities motivated Malaysians to seek better opportunities abroad.
However, there are other, darker-themed factors to consider, as the World Bank report suggested. A sense of social injustice seems to be a push factor for many. Perceptions of social injustice appear to feature prominently in the decision to migrate or return-migrate, the report said.
“Factors such as unequal access to scholarships and higher education seem to be of significant concern, particularly among the younger population within the non-bumiputera community.”
Then, there is quality of life.
“Differences in quality of life matter both in the decision to emigrate and the rationalisation of the decision to remain abroad. As part of this, safety and security issues are likely to be an important component.
“In the Malaysian context, stories of kidnappings and armed robberies appear to be shared widely in the diaspora community and form a narrative to justify the decision to remain abroad,” the report said.
In addition to the interviews, the World Bank also carried out a survey. To get a more structured response than feedback solely based on interviews, an online survey was administered, receiving 194 responses over a period of three weeks in mid-February 2011. According to the World Bank report, the results suggests that economic incentives and social disincentives matter most (see graph).
Perhaps of greater importance is what the likely consequences are if the brain drain problem is not solved. Commenting on this, Sally said: “We will continue to rely on foreign talent and expertise which will not be cost-effective in the long run. In addition, this curbs the development of the homegrown Malaysian workforce as succession planning will not be effective.”
In our next article, we take a look at talent shortage in the financial services industry and what is being done to address the problem.
Tomorrow: Financial sector hit by talent shortage
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