The migration of the youths from Sabah to other states in search of better job opportunities has had an impact on the state’s economy and growth. The Sabahan migration has resulted in a labour deficit in Sabah, rendering the state reliant on foreign labour. Talent is the key for a country to move up the value chain and escape the middle-income trap and brain drain. If left unaddressed, it would impede any drive to grow the economy.
The absence of an educated and skilled population would also make it difficult for Sabah to progress from a primary to a tertiary economy, which implies that its economy will be dominated by agriculture activities and low-wage jobs rather than the services industry. This has led to a negative impact on the state’s productivity levels. The report further discusses these challenges and their impact.
Talent migration can be defined as people leaving their jobs for different or better opportunities in other states within the country or in another country. The migration of talents especially those with higher qualifications is also known as “brain drain”. Most countries suffer from brain drain, and it can have a devastating effect on economies, with skills shortages reducing competitiveness and hindering real GDP growth.
According to the report by Kuala Lumpur-based independent think tank EMIR Research, around 2 million Malaysians are residing overseas. Out of this figure, around half a million are people above 25 years old, who are more likely employed. This migration of talents were triggered by numerous factors. One of the biggest contributors to talent migration is burnout. People are getting tired and overworked in their current jobs. They lose the passion they once had for their work and the industry. Over time, this hurts morale and hinders productivity. Eventually, they will leave for another job that makes them happier, which disrupts workflow.
Youth migration from Sabah to other states in search of better job opportunities has had an impact on the state’s economic growth. Sabahan’s migration to better jobs has resulted in a labour deficit in Sabah, increasing reliance on foreign labour. Talent is key to the country being able to move up the value chain and escape the middle-income trap.
Brain drain, if left unaddressed, would impede any such drive to grow the economy. The absence of an educated and skilled population will make it difficult for Sabah to progress from a primary to a tertiary economy, which implies that its economy will be dominated by agriculture and low-wage jobs rather than services. This can have a negative impact on productivity.
The HRD Corp National Forum Series, titled “Human Capital Migration and its Impact on Sabah,” was held in conjunction with the HRD Corp Open Day in Sabah on June 16, 2022. In his keynote, the Minister of Human Resources, Datuk Seri M. Saravanan addressed the causes and consequences of outward migration from Sabah, as well as what the ministry, HRD Corp, private sector organisations, and academic institutions can do to combat the issue. The Minister further mentioned that the rapidly growing outward migration rate among Sabahan talents could hinder any chances of providing new employment opportunities and driving economic growth for the state. The Minister added that there is an urgent need to strike a balance between encouraging the migration of capable talents into the state while creating new opportunities and incentives for the local workforce and professionals to stay.
The forum featured a panellist line-up of international motivational and leadership keynote speaker, a Deputy Permanent Secretary from the Ministry of Industrial Development Sabah, a Council Member for the Malaysian Employers Federation (MEF), and the Chief Executive Officer of International and Director of the Department of Labour, Sabah.
| Sector | Total | Malaysian | Non- Malaysian |
| Agriculture | 481. 6 million | 196.1 (41%) | 285.5 (59%) |
| Mining & Quarrying | 9.2 million | 8.2 (89%) | 1.0 (11%) |
| Manufacturing | 232.6 million | 123.5 (53%) | 109.0 (47%) |
| Construction | 114. 4 million | 67.0 (59%) | 47.4 (41%) |
| Services | 1018. 8 million | 775.2 (76%) | 243.6 (24%) |
Reducing Migration of Sabah’s Work Force in the Manufacturing Sector
According to statistics, Penang and Selangor are the top two migration destinations in Malaysia. With an employability rate of 84.78 %, Selangor has the greatest graduate employability, while Sabah has the lowest at 79.93 %. Additionally, Sabah had the lowest average wage at RM 3,900, while Selangor recorded the highest average salary at RM 4,451. Approximately 200,000 Sabahans, excluding their dependants, are currently employed in Peninsular Malaysia.
The government is committed to making the state more investor-friendly to attract more investors. To attract talents, the Ministry of Industrial Development Sabah has implemented several efforts, including expediting manufacturing activity approvals, creating a task force specifically for high-impact investors under the Sabah Maju Jaya Development Plan Initiatives, creating a trade and tourism office for Sabah in Singapore, collaborating with industrial players, and enhancing investment promotion. The Deputy Permanent Secretary stated that the Ministry will move forward with a few other initiatives, such as:
Unemployment In Sabah – Ideas & Initiatives to Generate Employment for Sabahans and Curbing the Brain-Drain
The Employment Insurance System in Putrajaya revealed that 681 individuals in Sabah have lost their jobs during the pandemic. Over the same period, the three Malaysian states with the largest levels of job losses were Selangor (5,204), Kuala Lumpur (4,311), and Johor (1089). In 2021, the COVID-19 pandemic and its destructive effects on enterprises in Sabah left a total of 184,200 people in Sabah unemployed, according to Datuk Yakub Khan, the Sabah Science, Technology, and Innovation Minister. This figure depicts an increase in the unemployment rate to 9%.
Multiple initiatives initiated by the federal and state governments of Sabah bode well for the future of the state and the employment opportunities it would bring. According to a council member of the Malaysian Employers Federation (MEF), this will result in retaining more Sabahans to work in the state and attracting migrant Sabahans, including top talents, to return to Sabah.
Initiatives such as Hala Tuju Sabah Maju Jaya (SMJ) would provide many jobs for Sabahans, reducing the need for Sabahans to look for a job outside of Sabah. Since there are now roughly 200,000 Sabahans working in Peninsular Malaysia, the additional investments in Sabah would help increase career possibilities for youngsters in Sabah.
Exploration of downstream industries based on biomass resources from oil palm waste and forestry is another potential source of income to enable Sabah to become an agriculturally based industrial state and provide job opportunities for Sabah youths. Sabah’s oil and gas industry, through GLCs such as Sabah Oil and Gas Development Corporation (SOGDC), Sabah International Petroleum (SIP), and SMJ Sdn Bhd, continues to be a significant contributor to the state’s economic growth.
The Sabah State government and Petronas have signed a Commercial Collaboration Agreement (CCA) allowing Petronas to share the state government’s and Sabahan’s aspirations to map out the development of the oil and gas industry in Sabah. The Sabah Gas Master Plan 2026–2040, which was also launched, will allocate natural gas to the use of LNG to fuel businesses and for power generation. Several agreements have been signed between various companies and SOGDC, which owns and develops Sipitang Oil and Gas Industrial Park (SOGIP). These include a Joint Collaboration Agreement (JCA), a Memorandum of Understanding (MOU), and a Sublease Agreement.
To address the brain-drain issue in Sabah, full scholarships will be granted to top students/talents (best brains) in Sabah to pursue studies at top-notch universities across the world with a five-year service bond, and an accelerated career path in the State Government Service, Oil and Gas, and Plantation Industries in Sabah.
Industries will be invited to cooperate with technical and vocational schools to provide “technical and vocational education and training” (TVET) with attractive allowances to students and absorb them into “identified jobs” in the manufacturing, construction, plantation, timber, and agriculture industries.
Industries should consider developing apprenticeship schemes for young people (15 to 17 years old) with competitive pay, attractive benefits, and career development and retention strategies. Other measures could be taken through industry-based skill training and upskilling (with good allowances) while incentivising local workers to take up “3D jobs” in the concerned industries, i.e., plantation, service, construction, and agriculture.
Finally, it is also crucial to investigate ways to remove the stigma associated with “3D jobs,” possibly through rebranding and better working conditions and wages through progressive automation and mechanisation.
It is almost impossible to stop talent migration as the present generation has numerous options to explore all around the globe. People migrate to areas with advanced technology to increase their income and human capital development process. In attracting new talent and retaining the existing ones, it is recommended for Sabah to create high-skill jobs. In a more targeted approach, it is advised for organisations to develop great strategies to retain talents, especially the skilled and technical professionals from the oil & gas industry, agriculture, and construction.
Public and private sector collaboration should be amplified to roll out strategies and measures that can attract and incentivise top Sabahan talents working overseas to return to the state and serve. This initiative will help contribute to Sabah’s social, community, and economic development.
Historically, companies have relied so much on the “fun” aspect of the perks to attract talents i.e., the ping pong table, the slide that goes from the third floor to the first floor, the free food, or happy hours. This model worked well in the past because it was a vast departure from the previous era of cubicles, corner offices, defined spaces, and monotonous routines.
This was designed to intertwine personal and work life in the corporate office setting. Perks like these are offered by big tech companies like Google and Facebook which have been leading their corporate way. Today, the ultimate perk is rather tuned into how employees have pivoted during the pandemic; prioritising and valuing flexibility to manage the new challenges of life and work as the world still grapples with uncertainties.
In addition, the private sector in Sabah should adopt a more flexible model across the board in attracting and retaining talent. The option to work flexibly, by taking time off and planning their days and schedules around their families is something that is favoured by most employees. The management may need to consider shifting from normal working hours to flexible working patterns; hence, attracting and retaining not only existing talents but also future ones.
Reinventing Human Capital Growth for a Sustainable Future
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