MITI: M’sian Companies Must Prioritise Local Workers as Foreign Labour Dependency Reaches Critical Stage

Malaysia’s growing dependency on foreign labour has reached a critical stage, prompting calls from the government for local companies to fundamentally rethink their hiring practices and prioritise the domestic workforce.

Investment, Trade and Industry (MITI) Minister Datuk Seri Johari Abdul Ghani stressed that companies must stop relying excessively on foreign workers, particularly in sectors that do not require specialised technical expertise as reported by Harian Metro.

“Many companies that have been operating in Malaysia for a long time, 10 to 20 years, have carried forward this dependency on foreign labour. This is a very critical issue that we must manage,” he said during a question-and-answer session in the Dewan Rakyat.

He said this in response to a supplementary question from Bakri MP Tan Hong Pin who asked on  MITI’s readiness to set or relax foreign worker recruitment policies based on the different needs of various industries and businesses.

Capping foreign labour to 3D jobs & capping intake targets

The Minister highlighted a stark imbalance in Malaysia’s current workforce structure. While national policies target an 80:20 ratio of local to foreign workers, actual figures tell a vastly different story.

Harian Metro reported that currently, Malaysia records approximately 2.6 million registered foreign workers, a figure that excludes undocumented migrants and fails to decline despite targets set under the 13th Malaysia Plan (RMK13).

“It is not easy to solve this issue, but if we do not resolve this policy, where we already have 2.6 million foreign workers, excluding illegal ones, it will damage the country in the future.

“If you want to use foreign workers, you can, but with the condition that it is strictly for 3D (Dirty, Dangerous, and Difficult) jobs,” the minister warned.

Prioritising TVET graduates over cheap labour reliance

Addressing the domestic talent pipeline, Johari pointed out that Malaysia produces approximately 400,000 Technical and Vocational Education and Training (TVET) graduates who deserve primary consideration in the local job market. However, many employers still attempt to offer these skilled local graduates wages equivalent to foreign manual labor.

Rather than forcibly relocating low-tech manufacturing industries, the ministry plans to drive a progressive transformation through automation, digitalisation, and smart technologies under the New Industrial Master Plan (NIMP) 2030.

To support this structural shift, the government is introducing tax incentives, grants, and stricter licensing criteria to ensure future foreign direct investment (FDI) moves away from low-skilled, labour-intensive models.

Updating Parliament on NIMP 2030’s progress since its September 2023 launch, Johari noted key performance indicators:

• Manufacturing Value-Add: Currently stands at RM399 billion towards the 2030 target of RM587.5 billion.

• Job Creation: Achieved 2.8 million jobs against the 3.3 million target.

• Average Monthly Salary: Currently at RM2,775, aiming for RM4,510 by 2030.

What are your thoughts on limiting foreign worker intake to 3D jobs? Share your views in the comment section below!

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