Strategies to attract and retain the next generation of talent

Many employers in Malaysia are struggling with workforce shortages due to the Great Resignation brought on by the pandemic. Today, attracting and retaining the workforce remains the top priority for CEOs and business owners alike. More than half of the working population in Malaysia are represented by Gen Zs and millennials.

Deloitte’s Global 2022 Gen Z and Millennial Survey has revealed key trends on what these demographic want from workplaces in Malaysia. As defined in the study, Gen Zs are anyone born between January 1995 and December 2003, and millennials are those born between January 1983 and December 1994.

Gen Zs and millennials feel deeply concerned about the state of the world and their own futures. They are reassessing their priorities in the wake of ongoing crises, and are actively trying to balance the challenges of everyday lives with their desire to drive societal change. Business leaders in Malaysia thus need to consider bold moves to address this.

Cost of living a top concern

Cost of living is by far their top concern. Many live paycheck to paycheck and are not confident they will be able to retire comfortably. To make ends meet, more than four in 10 Gen Zs and a third of millennials have a part- or full-time side hustle, in addition to their primary job.

At a broader societal level, they are deeply concerned about wealth inequality and are not optimistic that the economic situations in their countries will improve.

Flexibility is a priority

Most Gen Zs (75%) and millennials (77%) prefer hybrid or remote work, but less than half currently have the option to do so. They value flexible work because it helps them save money, frees up time to do other things they care about, and allows them to spend more time with family.

Having a good work/life balance is one of the top reasons why they choose to work for an organisation.

Mental health concerns on the rise

Nearly half of Gen Zs say they feel stressed all or most of the time. Millennial stress levels are also high but are down slightly from last year. Both cite their longer-term financial future, day-to-day finances, and job and workload, as the top three contributors of feelings of anxiety and stress. 65% of Gen Zs surveyed in Malaysia feel burned out due to the intensity and demands of their workload.

While employers are seen to be trying to address workplace mental health issues – more than half of respondents say while their employer is more focused on workplace well-being and mental health since the start of the pandemic – many do not believe the increased focus has resulted in any meaningful impact on employees.

Business leaders need to up the game

Malaysian workplaces need to up the ante to compete effectively and win the war for talent. With the weakening Ringgit against the US Dollar, Malaysia is at higher risk of losing talent as global opportunities become increasingly more attractive.

The Great Resignation signals a breaking point in response to ongoing dissatisfaction, increasing distrust in business, and shocking events like the pandemic, that have made many reassess their priorities. Business leaders now have an opportunity to drive the sustained workplace changes that Gen Zs and millennials have long been asking for.

While compensation, better work/life balance, and more learning and development opportunities are at the top of the list, addressing them requires more than a checklist of activities.

The answer to address the cost-of-living concern is not to simply pay them more, but to ensure that they are moving towards higher value and more meaningful jobs that attracts higher pay. To do so, business leaders need to fundamentally relook at the business and organisation from top to bottom and reimagine the work, workforce, and workplace to be more productive, profitable, and positioned better for the future.

Providing flexibility cannot be solved merely with a HR policy document. The deeper meaning behind flexibility is adaptability. Businesses and organisations will have to be nimble and able to quickly pivot to changing needs of customers, the workforce, and the environment. Becoming an ‘Adaptable Organisation’ is a fundamental shift in operating philosophy that enables organisations to operate more like startups, with modernised people practices and ecosystem that enables enterprise agility.

A new generation of bold, capable, adaptable, empathetic, and purpose-driven leaders are needed to lead the workforce into a highly uncertain future. Malaysia needs to invest heavily in accelerating the development of our corporate leaders before we are overtaken by intense competition from our neighbours. In Indonesia, the Catalyser program is currently the biggest leadership accelerator program in Southeast Asia that aims to build world-class Asian leadership. Singapore on the other hand, has been running the SkillsFuture Leadership Development Initiative for several years to develop the next generation of Singaporean business leaders.

The pandemic and the ensuing Great Resignation is unprecedented. Now is the time for business leaders in Malaysia to move away from incremental solutions to bolder and imaginative thinking to improve competitiveness and ultimately win the war for talent.

The views and opinions expressed in this article are those of Lee Yun-Han, Consulting Director of Deloitte Southeast Asia.