Flexi-work: the way forward for MNCs in Malaysia - Spotlight Greater KL

Flexi-work: the way forward for MNCs in Malaysia

Flexi-work is a flexible model that allows employees to combine remote and in-person days according to their schedule. A Qualtrics survey of 37,000 employees globally found that employees engagement was highest at 76% among those in hybrid work models. Additionally 62% of respondents attributed desire to stay with their employer for three years or longer to the flexibility of hybrid arrangements. Furthermore, 73% noted that hybrid work arrangements improved inclusiveness within their organisations. The benefits extends to employers as well, as evidenced by a 2023 report by Scoop that found that companies offering full flexible between 2020 and 2022 saw a significant revenues growth by 21%, compare to just 5% for companies requiring in-person work. Even better, it enables firms to cut down on costs related office expenses.

Employees, policymakers, MNCs push flexi-work

Now, several years post-pandemic, employees are embracing the opportunity to choose flexible work arrangements instead of returning to fully in-office setups. According to the Standard Insights 2024 survey, 55% of Malaysian employees prefer a hybrid work model. Interestingly, they are not inclined towards fully remote work model but instead prefer a balance, with some workdays at home and others on-site, combining the best of both models.

The Malaysian government has been proactive in implementing policies to support employees and guide employers in adapting to hybrid work models. In April 2024, the Ministry of Human Resources Ministry via TalentCorp began offering consultation services to employers interested in implementing flexible working arrangements. Sections 60P and 60Q of the Employment Act 1955, which took effect in January 2023, gives employees the right to request flexi-work arrangements from their employers. Building on these initiatives, the Government is exploring additional options - including advisory services and tax incentives - to further encourage flexible working hours, according to Minister Steven Sim.

MNCs, eager to attract and retain key talents, have embraced flexi-work models, with major tech companies like Ant International and Microsoft adopting it pre-pandemic. According to Hays’ Market Survey 2023, only 30.9% of MNCs in Malaysia require employees to work on-site five days a week, compared to 61.4% of local companies. Meanwhile, almost 40% of MNCs are offering hybrid work arrangements, allowing employees to spend of 2-3 days per week in the office.

Even MNCs in sectors where flexi-working might not be traditionally expected, like logistics giant DHL, are embracing remote work and teleoperation in their warehousing operations. To enhance remote control of devices or machine, companies are increasingly integrating robotic technologies, autonomously moving vehicles, and digital twins. A notable example is Yonder, a software solution that enables employees to manage multiple warehouse robots from any location.

Flexi-work and GBS hubs

The rise of flexi-work models globally has positively impacted Malaysia, which is the world’s third-most competitive Global Business Services (GBS) location. The local GBS sector, which is expected to reach a value of US$6.7 billion by 2025, is part of the larger Global Services ecosystem, which includes hubs such as Shared Service Centres (SCs), Centres of Excellence (CoEs), Technical Centres, and Regional HQs.

One example is Finnish cybersecurity firm F-Secure, which chose Greater Kuala Lumpur (Greater KL) as its Asian hub as early as 2006 for the city’s strong pipeline of cybersecurity talents. In March 2022, F-Secure’s corporate arm relaunched as WithSecure. By January 2024, WithSecure became one of the prominent MNC occupying WORQ’s 7,200 sq. Ft. co-working space in Menara Sentrum, Greater KL, which prioritises transit connectivity and flexible working arrangements.

Datacom, Australasia's largest homegrown tech company also embraces flexi working models It, too, has chosen WORQ’s Menara Sentrum co-working space for its Greater KL contact centre operations, demonstrating the growing appeal of hybrid workspaces in the region.

Source: KPMG (2024)

KPMG’s 2024 report GBS 3.0 examined changes in work environments, and found that the hybrid working model has become the preferred choice for GBSs. Striking a balance between CEO’s expectations for office-based work, and talent’s preferences for remote work will be crucial in retaining top talent and optimising operational effectiveness.

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