PETALING JAYA: The job outlook for the country looks bleak, with over 50,000 Malaysians expected to lose their jobs this year.
Malaysian Employers Federation (MEF) executive director Datuk Shamsudin Baradan said the main sector to be affected will be manufacturing.
This is followed by the services sectors – insurance, banking and retail – and the construction sector, due to the economic situation.
He said the culmination of several factors that will come into play will hit the job market hard and make it more challenging.
Some of the factors that will hurt the job market are the levy imposed on employers for hiring foreign workers, and the Employee Insurance Scheme (EIS).
"The increase in the days for maternity leave from 60 days to 90 days, as well as the possibility of paternity leave will also be factors," Shamsudin said.
A total 37,699 Malaysian employees were laid off in 2016 while 38,499 lost their jobs in 2015.
The number of job losses for the whole of 2017 is not available yet, but as of September last year, 30,700 Malaysians were retrenched.
Shamsudin said the scheduled review of the minimum wage in July will also have an impact on employers hiring workers.
"With the raising of the retirement age, those who were suppose to retire in 2013 will be doing so this year.
"But this may not open up the labour market as some employers may not want to incur additional cost by replacing those who are retiring," he said, adding that due to adverse factors, many employers will be very cautious about hiring.
Automation will continue to be a factor for job losses this year as more and more companies turn to automation, usage of robotics, and information technology.
When banks adopted higher use of information technology in 2016, it resulted in 18,000 job losses.
Shamsudin said with the insurance industry heading towards this, there could be more substantial job losses.
"Multinational corporations involved in labour-intensive industries are also leaving due to higher wage cost in Malaysia.
"They are moving to more attractive and lower labour cost nations where there are no high social costs," he said, citing the example of Cambodia and Laos where the wages are below US$100 (RM402.59) per month compared to about US$250 here.
Meanwhile, Malaysian Trades Union Congress (MTUC) president Abdul Halim Mansor said he was informed by the Labour Department that 30,000 to 50,000 people could be retrenched this year.
He said they expect the finance, construction and manufacturing sectors to be involved.
Abdul Halim added that should this happen, MTUC intends to ensure that all those affected are given adequate compensation.
He said the EIS, that came into force on Jan 1, will also help provide some relief to the retrenched workers.