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Research Report: Financial Impact on the Unavailability of Foreign Workers in Malaysia 2024

Author

Listed:
  • Dr. Chris Daniel Wong

    (Chairman Emeritus Malaysia Digital Chamber of Commerce, Malaysia Fellow Chartered Institute of Digital Economy, Malaysia)

  • Dr. Nicole Foo, DBA

    (Fellow Chartered Institute of Digital Economy, Malaysia)

  • Nafhani Azli

    (Fellow Chartered Institute of Digital Economy, Malaysia)

  • Dr. Athi Pillai

    (Assistant Policy Research, Chartered Institute of Digital Economy)

  • Dr. Farzana Nazera

    (Programme Leader, Spectrum International University College, Malaysia)

Abstract

Malaysia’s economic growth has long been underpinned by a steady influx of foreign labor, especially in labor-intensive sectors such as construction, manufacturing, agriculture, and services. However, in recent years, particularly in the wake of the COVID-19 pandemic, the country has experienced a severe shortage of foreign workers—estimated at over 1.2 million—due to stricter immigration policies, border restrictions, and government efforts to reduce dependency on migrant labor. This shortage has significantly disrupted business operations, increased labor costs, delayed projects, and reduced productivity, especially for small- and medium-sized enterprises (SMEs). Despite efforts to attract local workers and encourage automation, these measures have not sufficiently mitigated the crisis. This study aims to quantify the financial losses incurred across various industries due to the labor shortfall, examine the operational challenges faced by affected sectors, and explore the adaptive strategies businesses are employing. It also provides policy recommendations to support labor sustainability while maintaining Malaysia’s global competitiveness. The findings underscore the urgent need for a balanced approach that addresses immediate labor demands while advancing long-term workforce development goals.

Suggested Citation

  • Dr. Chris Daniel Wong & Dr. Nicole Foo, DBA & Nafhani Azli & Dr. Athi Pillai & Dr. Farzana Nazera, 2025. "Research Report: Financial Impact on the Unavailability of Foreign Workers in Malaysia 2024," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 9(5), pages 4405-4415, May.
    • Handle: RePEc:bcp:journl:v:9:y:2025:issue-5:p:4405-4415
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    References listed on IDEAS

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    1. Athukorala, Prema-chandra & Devadason, Evelyn S., 2012. "The Impact of Foreign Labor on Host Country Wages: The Experience of a Southern Host, Malaysia," World Development, Elsevier, vol. 40(8), pages 1497-1510.
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