Is HR in Malaysia Ready to Drive Business?

Like most major markets in Southeast Asia, Malaysia faces challenges with finding the best talent and the cost of hiring them. What steps can HR take to improve return on people investment and drive business performance?

Is HR in Malaysia Ready to Drive Business?

7 Apr 2017 by  Rahul Chawla

Like most major markets in Southeast Asia, Malaysia faces challenges with finding the best talent and the cost of hiring them. In fact, in the 2016 Aon Best Employers Malaysia study, CEOs named “critical skills shortage”, “rising salaries”, and “poor availability and selection of talent” as their top three people risks. Furthermore, the situation in Malaysia is exacerbated by the economic slowdown as well as the alarmingly low value of the Malaysian Ringgit against the US dollar—leaving even large, multinational organisations to operate on shoestring salary budgets. As a result, the majority of Malaysian organisations are taking a cautious yet targeted approach with both their people and business investments.

Still, the outlook isn’t all gloomy. The difficult year has encouraged—even enabled— organisations in Malaysia to work hard on ensuring the continuity of their business by taking pre-emptive rather than reactive approaches to their people agenda. With organisations like Grab creating an environment where employer brand and business brand merge into one, HR leaders have greater responsibility than ever to behave, not just as strategic partner, not even just as a business partner, but as a business driver. And the way to do this is to ensure return on people investments, especially in this volatile time.

The question is: How?

Consider the end goal

A key differentiator in delivering an effective HR strategy is being able to work towards clear end goals. An example of this is in performance management. Aon Best Employers in Malaysia don’t just view goal-setting as a checking-the-box exercise; instead, 67% of Best Employers integrate promotion-linked goals into performance management, compared to a market average of just 52%. Therefore, individual goals in these organisations are set with the vertical goals of the team/function in mind as well as the horizontal goals of the organisation. At the same time, 67% of Best Employers in Malaysia are also committed to equipping their managers to handle career conversations—compared to the 52% market average.

In this way, not only does HR empower managers to enable their people to achieve their goals, they are also ensuring that the investments they make in their people deliver return through strong performance.

Assess, develop, and reward

Organisations set aside significant amounts of their budget for training every year, but the reality is, they don’t know which development programmes generate return on investment. In order to track success, it’s important for HR to find out what adds value to their employees, their teams, and the organisation. They can do this by equipping managers with smart tools to assess their direct reports and understand their developmental needs, so that programmes can be tailored to fit those needs. Within the organisation, HR can categorise these needs and provide them to groups of individuals at a time.

And by measuring the outcomes of these developmental programmes to employees and to business, it will also enable organisations to reward high performers in an appropriate way—ensuring that every investment made on individual employees is best placed to deliver return.

Listen continuously

While Aon Best Employers empower their managers to have career conversations, the effectiveness of this rests on how frequently these conversations occur. Does an organisation really need to wait six months to a year each time to find out how employees feel about working there, and how their careers are progressing? 86% of employees at Aon Best Employers in Malaysia believe that senior leadership treats them as the organisation’s most valued asset, and a big part of this can be attributed to the fact that they feel their voices are being heard on a regular basis.

In Malaysia’s trying business landscape, all organisations are looking for are ways to ensure that they are spending their money wisely. As HR in Malaysia embraces the role of business driver, the focus of the people agenda becomes about driving goals, driving culture, and driving performance so as to get the best people outcomes that drive business results.

Start a conversation with us

Need help with your people strategies to drive business in Malaysia? Get in touch with us.

Rahul Chawla

Rahul Chawla leads the Performance & Rewards practice for Aon Hewitt Malaysia. He advises local and international companies on total rewards, executive compensation and performance management by linking these areas with overall business and HR strategy. Before moving to Malaysia, he was based out of the Shanghai, China office for Aon where he was managing international relations and advising clients on Engagement and Total Rewards. With a background in corporate HR, Rahul is passionate about empowering results through solutions which are relevant in the business and macro-economic context.

Get in touch
Rahul Chawla
Boon Chong Na