Malaysia’s economic fundamentals have been strengthening, the ringgit is holding steady, inflation is cooling, and business sentiment is gradually improving. On paper, things look stable.

But on the ground, SMEs are telling a very different story: hiring has never been harder, wage expectations continue to rise, workers are demanding flexibility, and younger employees are increasingly pushing back against low pay, rigid structures, unclear progression, and burnout-inducing cultures.

This tension, between macroeconomic optimism and micro-level labour friction, is shaping a new workplace reality. Today, we explore what’s driving this shift, why employees feel more empowered, and what Malaysian SMEs need to rethink if they want to attract and retain talent in 2025 and beyond.

Joining this conversation is someone who follows Malaysia’s labour market closely: Dr Carmelo Ferlito, CEO of the Center for Market Education.

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