54% of Malaysian employers believe counteroffers work, but employees see them as temporary fix: Report

Hiring activity in Malaysia is expected to increase in 2026, but employers are likely to remain cautious, focusing on selective hiring, flexible workforce models, and retention challenges rather than aggressive expansion, according to latest report by Monroe Consulting. 

The report titled, 'Malaysia Talent Report 2026,' found that 44% of employers plan to expand headcount in 2026, particularly across technology, healthcare, engineering, and financial services. However, 56% of employers intend to maintain current workforce levels, either through hiring freezes or delayed expansion, especially in cost-sensitive sectors such as general services and traditional manufacturing.

This suggests that while hiring momentum is expected to improve, growth will remain measured rather than aggressive.

Employers cautious on international hiring

Despite high mobility among professionals, employers remain conservative when it comes to hiring foreign talent. Only 40% of organisations in Malaysia are open to hiring international professionals, mainly for specialised or critical roles that require niche expertise.

Most employers continue to prioritise local talent due to cost considerations and the availability of market-ready candidates. This comes even as 72% of Malaysian employees say they are open to working abroad, highlighting a growing mismatch between employee mobility and employer hiring preferences.

Hiring concentrated in Klang Valley

The report also shows that hiring activity remains heavily concentrated geographically. Around 74% of hiring is concentrated in the Klang Valley, while only 26% of recruitment takes place across other regions. The concentration reflects continued centralisation of economic activity and job opportunities in major urban hubs.

At the same time, talent mobility is increasing, with 93% of Malaysian employees exploring or open to better job opportunities in 2026, indicating a highly active talent market despite cautious hiring strategies.

Rise of flexible and non-permanent roles

Workforce strategy is also shifting towards flexibility rather than fixed headcount growth. About 34% of employers are exploring contract, part-time, and project-based hiring to remain agile, scale operations quickly, and access specialised skills when needed.

Non-permanent roles such as software engineers, project engineers, customer service representatives, and data analysts are among the most in-demand contract positions. The report notes that non-permanent roles are growing by 2–3% annually, signalling a structural shift in how organisations approach workforce planning.

Employee attitudes are also evolving, with 52% of professionals open to contract-based roles, reflecting growing acceptance of flexible and non-linear career paths.

Quiet quitting and retention challenges

Retention remains a major concern for employers, with 48% reporting an increase in quiet quitting behaviours over the past year. More than a third of employers said there had been no change in quiet quitting, which the report suggests may indicate disengagement has become normalised within organisations.

The report also highlighted the growing reliance on counteroffers as a retention strategy. About 54% of employers believe counteroffers work, while 45% of employees said they would consider accepting a counteroffer. However, the report notes that counteroffers often delay resignations rather than solve underlying issues such as career stagnation, workload pressures, leadership concerns, or workplace culture.

Salary expectations gap widens

The report also identified a widening gap between employer salary budgets and employee expectations. Around 86% of employers offer annual salary increments of 10% or less, with most increases falling in the 5–10% range.

In contrast, 74% of employees expect at least a 16% pay increase when changing jobs, with many professionals expecting 20–25% salary increases when switching roles. For niche or high-demand skills, salary premiums of 25–30% are becoming increasingly common.

Measured hiring, mobile talent market

Overall, the Malaysia Talent Report 2026 suggests that the labour market will remain active but cautious in 2026. Employers are focusing on selective hiring, flexible employment models, and retention strategies, while employees remain highly mobile and open to new opportunities.

The report concludes that talent mobility in 2026 will be driven less by employee willingness to move and more by where companies choose to invest, expand, and create jobs.