Brain Drain refers to when skilled and highly intellectual labor migrated from one country to another. Malaysia is one of the countries most affected by the brain drain. This problem leaves the country with a lack of skilled human capital. According to recent reports, the number of migrants currently is three times higher than two decades ago. Also, there is a change in trend of migrants. Number of migrants to Singapore is steadily decreasing while this number is increasing in Australia, New Zealand, USA and UK. (The World Bank Group, 2011). Adding to the problem of brain drain is the concern that the outflow of talent from Malaysia in the form of brain drain has not been replaced by the inflow. This imbalance affects the skill base of Malaysia by damaging its quality. The factors contributing to brain drain are mainly career prospects, social injustice and compensation. According to a study conducted by Watson (2012), “56% of surveyed employees in Malaysia perceived that there was no career growth for them”. Their managers were not able to manage their career development. Such employees would look for better options outside the organization and the country. Another reason for brain drain is less lucrative salary and benefits packages offered to employees. There is a huge gap between salaries of employees with the same skill set in Malaysia and other developed countries. There is also a very high luxury tax in Malaysia, which adds to the problem of brain drain. Social factors such as education and social injustice also play an important part. Some part of Malaysian population is given special privileges, and they get extra assistance and help in all their business ventures. Another factor that contributes to brain drain is limited access to higher education. Getting admission into a public institution is difficult because of the quota system and reservations while the privately funded institutions are very expensive and also they do not match the standard of universities in developed countries.
The issue of brain drain affects the businesses, society and the country of Malaysia as a whole. Brain drain bumps up the pay levels in the country. Businesses try to hike the pay packages as a means to retain skilled employees. Brain drain also leads to loss of ideas and innovations. When all the intellectual brains migrate, they take all the innovation and research thinking with them too, which results in the slowdown of research and strategic progress of the country. This also leads to loss of taxes and revenues for the country. Taxes are levied on the earnings of the working population. When a majority of the working population migrates, it will result in a drop in taxes and revenues collected by the government. Major negative impact of brain drain is on the country’s development. A nation provides all the necessary facilities and education to its workforce to be more skilled and competitive. And when this workforce migrates to other countries, there is a huge loss of nation’s investment. Since every one out of ten skilled professionals is migrating to other countries, this creates a high shortage of skilled workers in the country. This refers to IT and R&D personnel. Brain drain is not just creating a shortage of skilled workers, but it also creates a shortage of highly qualified people too. Multinationals operating in Malaysia are not able to appoint locals at CEO position. They are bringing in foreign expert to fill these positions. As a result of brain drain, the leftover workforce in Malaysia lacks managerial and entrepreneurial expertise.
Brain drain is such an issue that no single party can solve it. It involves efforts from both the government and business organizations. Government can manage to solve and monitor the issues at the macro level by making changes in policies. On the other hand, business organizations can help in solving this problem by contributing at micro level.
References
The World Bank Group. (2011). Putting the Malaysia diaspora into perspective. Retrieved from http://cs.stanford.edu/people/eroberts/cs181/projects/2010-11/BrainDrain/Malaysia.html
Watson, Towers. (2012). Employee Retention a Key Challenge In Malaysia. HRM Asia. Retrieved from http://www.hrmasia.com/news/employee-retention-a-key-challenge-in-malaysia/144343/
