Malaysia’s labour force is getting older, how do we keep it going strong?

AS the workforce greys and the youth pipeline thins, Malaysia finds itself at a demographic crossroads. The country's economic engine—once powered by a steady influx of young, able-bodied workers—is beginning to sputter under the weight of an ageing population.

With more employees heading toward retirement and not enough fresh talent stepping in, the pressure is mounting, especially in labour-intensive sectors like agriculture and manufacturing.

Malaysian Employers Federation (MEF) executive director Datuk Shamsuddin Bardan, a labour relations expert, emphasises that Malaysia’s ageing workforce needs to be countered by a shift in the national employment strategy with a focus on inclusivity, technology adoption, and sustainable workforce planning.

The transition, he said, would enable the nation to adapt effectively to the changing demographic landscape, requiring cooperation from the government, employers, and employees alike.

This is because without attention by relevant corporations to address the ageing nation, Malaysia would face economic risks because the overall labour force participation would decline.

"As the older workers retire, they are not being replaced by a proportionate number of younger workers, which could significantly impact productivity across various sectors," he said.

"The long-term trend of declining labour force participation due to an ageing population poses a serious risk to economic growth," he added.

PRODUCTIVITY AND HEALTHCARE STRAINS ON THE HORIZON

Additionally, he said that the greater burden on the working-age population would strain the healthcare systems and social welfare programmes.

The rapid development of technology would also lead to adaptation challenges among the older workers, making them face difficulties in the workplace, which could hinder innovation and digital transformation in key industries, alongside slowing down productivity at work.

Following these occurrences, Shamsuddin emphasised among the industries most affected, including the manufacturing and construction where the sectors depend heavily on physically demanding labour where the ageing workforce could exacerbate labour shortages. He said that employers should adopt automation and robotics to reduce physical strain and attract younger workers.

Furthermore, he said that the demand for healthcare services would increase with its workforce itself ageing, creating potential shortages. He said that strategies such as mentorship programmes and incentives for experienced healthcare professionals to delay retirement are crucial.

Shamsuddin also said that the ageing nation would impact education where both the teaching workforce and student population face ageing, leading to potential long-term sustainability issues. "Education reforms and policies to attract younger talent into the profession are necessary," he said.

Malaysian Employers' Federation (MEF) executive director, Datuk Shamsuddin Bardan.

Meanwhile, for agriculture, few younger workers are entering the field with the sector facing an ageing workforce. He said that it would be crucial for agritech solutions and supporting agritech start-ups to help modernise the sector in order to make it more attractive to younger generations.

Upon addressing the health and safety concerns among the older workers that affect productivity health, he said that the older workers play a huge part in fluctuating productivity, particularly in physically demanding sectors.

"Older workers experience a decline in physical strength, flexibility, and reaction time, leading to a higher risk of workplace accidents and injuries. In result, there will be increased absenteeism and higher workers' compensation claims," the executive director said.

He added that some older workers suffer chronic conditions, such as arthritis and cardiovascular issues, leading to frequent medical leave, further reducing skilled labour availability and increasing healthcare costs for employers, making it vital that they improve their preparedness.

THE IMPORTANCE OF ERGONOMICS AND WORKPLACE DESIGN

In terms of ergonomics, Shamsuddin commented that many workplaces are not designed to accommodate older employees, impacting their efficiency and morale. "Companies should invest in ergonomic design to enhance the productivity of older workers," he urged.

He added that older workers pose potential for redeployment with their valuable institutional knowledge, on the grounds that their health concerns are adequately addressed where the lack thereof would limit their ability to take on the role effectively. Though some of their physical abilities limit their take on strenuous roles, Shamsuddin said that they have the potential for mentorship, quality assurance and training positions which employers should consider to mitigate the loss of productivity.

Furthermore, he said that employers could also mitigate the issues by further investing in an age-friendly workplace design, flexible work arrangements, wellness programmes especially tailored for older workers and knowledge-based roles for them rather than physically demanding tasks.

In maintaining competitiveness despite the ageing workforce, Shamsuddin called on businesses to implement strategies in retaining older workers while fostering innovation, which could be done by intergenerational collaboration which is pairing older employees with younger colleagues.

"This can foster the exchange of experience while gaining fresh perspectives on technology and trends," he said.

Photo by Canva for illustrative purposes only.

HARNESSING INSTITUTIONAL KNOWLEDGE THROUGH REDEPLOYMENT

Employers could also preserve knowledge by documenting institutional knowledge through digital platforms that could help prevent brain drain as older workers retire. Additionally, he said that employers could offer part-time roles, consultancy positions and flexible work arrangements if they want to retain experienced workers.

Shamsuddin also said that there should be continuous training in digital tools and skills for older workers to ensure that they remain relevant in the increasingly digital-demanding workplace.

For an inclusive environment, he emphasised the importance of an inclusive culture where age bias should be handled effectively with value diverse perspectives in decision-making.

Ergonomic workplaces including suitable physical accommodations, wellness programmes, and mental health support tailored to employees' needs, Shamsuddin said.

Further addressing the importance of creating safer and more inclusive workplaces for older employees, he urged the need for policy shift to improve workplace adaptations with similar practices in the workplace by employers and employees and cultural shifts.

He recommended an application of anti-discrimination policies to prevent age discrimination in hiring, promotions and training opportunities.

The industrial relations expert further emphasised the need for flexible work options to increase productivity where older workers could be offered part-time roles, flexible work arrangements and remote work to accommodate them.

Additionally, he said that it is important to provide regular safety training, including ergonomics and musculoskeletal health in order to ensure that workplaces are designed with older workers considered.

DIGITISING KNOWLEDGE AND OFFERING FLEXIBILITY

He also said that there is a need for the increase of digital literacy among the older workers alongside rapid technological advancements, where training could be provided to assist them in handling digital tools and keeping the workforce competitive.

As a conclusion, he called on the government as the vital role in addressing the challenges posed by an ageing workforce, where flexible retirement should be considered through phased retirement options and tax incentives offer for employers who decide to hire and retain workers.

Shamsuddin also said that the government should offer subsidies for upskilling and reskilling programmes, particularly focusing on digital literacy and new technologies.

Other than that, anti-age discrimination laws and job adaptations for older workers should be implemented, aside from the extension of full Social Security Organisation (Socso) coverage to older workers and providing subsidies for companies that hire workers over 60.

Addressing silver economy where consumers are increasing their purchase amidst the ageing population, he said that it is important to encourage entrepreneurship and second-career programmes for older workers to transition into consultancy or coaching roles.