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How Can You Improve The Malaysian Employees' Engagement?

Posted by Max Thum on October 30, 2017

Employee engagement, defined as an employee’s psychological investment in a company, often denotes one’s job satisfaction and one’s interest in growing the company. This metric is an important factor for a company’s success and growth.

According to a recent survey by Aon Hewitt, an increase in employee engagement leads to a significant increase a company’s financial returns.

The Current Situation

However, the survey further shows that Malaysia has the lowest employee engagement in the South East Asian region, totalling only 59%, indicating a 2% drop since 2016.

This means that companies in Malaysia are losing opportunities in increasing returns and speeding up growth.

Today, despite a growing emphasis on company culture and working space, the primary incentive (after their salary) that keeps your employees in the office is health care and related benefits packages. With that being said, many companies still fall into the trap of not providing adequate medical benefits to their employees because of the high costs involved.

Calculating employee benefits in Malaysia


However, the costs of losing an employee due to a lack of offered benefits can be much greater than offering the benefits themselves. From this perspective, investing in desirable employee benefits are more cost-effective.

Employee benefits, when incentivised effectively, are powerful tools to retain your company’s best talents.

What can companies do to increase employee engagement?

The solution remains simple: a company that can successfully increase employee engagement need to provide basic but highly desirable incentives such as health care.

Providing medical benefits, may appear costly to companies. To what extent should your company invest in employee benefits to retain your best employees?


Employee Recruitment is Expensive

We have to compare the costs of recruiting and retaining employees to make an informed decision on employee benefits.

Many companies often focus on recruiting new employees but not enough on retaining current employees. Often, this appears to be the most cost-effective option: if current employees are unsatisfied with their current incentives plan, it will be more logical to find other talents willing to agree to the current terms and fill up the position.

However, employee recruitment is costly, both financially and in terms of time and business opportunities.

Two types of costs are to be considered: direct and indirect costs.

Direct Costs

Costs that are directly relating to an employee leaving & replacement:

  • Separation costs as a hire leaves;
  • Job advertisements (both online and offline);
  • The screening and interviewing process;
  • Background checks and referral fees;
  • The recruitment team and expenses, such as travel and time reviewing applications;
  • Talent acquisition software.

While looking for a new employee, a vacant position in a company also incurs hidden costs in terms of loss of business performance and potential opportunities. Meanwhile, this could create a ripple effect, in which other employees ponder on whether they should leave.

Indirect Costs

Some of the indirect costs:

  • Settling and training the new employee;
  • Workplace integration in terms of physical space, teamwork and community;
  • Time required for the new employee to reach optimal productivity;
  • Loss of productivity by current employees due to the new hire’s training process;
  • Missed business opportunities;
  • Time spent by managers to onboard new hires.

Expert knowledge from the previous employee is also lost, and although new hires can bring in expertise, they would require a deep understanding of the business and company vision for their knowledge to be put to effective use. Becoming familiar with an organisation takes time and time sometimes isn't on the company's side.

Cost of Losing Employees

The costs of losing an employee, looking for a new one and training him/her will vary from company to company.

Nevertheless, it is estimated that hiring one employee can cost from 25% (for lower-paying jobs) to 100% (for higher-paying jobs) of the position’s annual salary; yet this does not take into account the costs related to the learning curve the new employee has to overcome.

Eventually, retaining employees who are already familiar with the organisation and show great talent is more cost-effective for the company.

Retention is Key for Continual Productivity

It should not be assumed that employee retention is less challenging than employee attraction. It is important for companies to invest adequately in retaining talents to prevent company losses or even stagnation.

We have seen that a company’s focus on retaining current talents is cost-effective and prevents productivity loss.

Current employees are already familiar with the company’s processes. As long as companies develop effective strategies, depending on what their employees are looking for, employees’ motivation and productivity in the workplace will increase.

What Do Employees Want As Benefits?

How does a company successfully retain employees? Here are the first five key retention factors for employees in Malaysia, based on a recent survey by HAYS:

  • Salary or benefit package (42 per cent)
  • Career progression (34 per cent)
  • Work-life balance (34 per cent)
  • Work location (27 per cent)
  • The management style & company culture (27 per cent)

Therefore, basic incentives such as promotions and health packages are still highly demanded by employees, regardless of the company culture or factors that are ‘on-trend’ such as an aesthetic workplace.

Emulating Benefits Offered by Successful Malaysian Companies

The basic package of employee benefits offered in Malaysia usually includes retirement plans (EPF and SOSCO), health care coverage and paid leaves.

While retirement planning is compulsory by law and is implemented into all registered companies, it is not the case for health coverage. Therefore, not all companies provide the most fundamental employee benefits and risk losing employees.

In fact, results from a global study by Fractl show that, out of 17 company perks, the most important and desirable benefits for employees are health, dental and vision insurance. They further shows that health care is the most ‘heavily considered’ benefit when an employee chooses between a low-paying and a high-paying job.

Therefore, providing medical insurance with a low salary may be more attractive than a higher salary without employee benefits.

Other Desirable Employee Benefits

The list of desirable employee benefits from the Fractl study continues with:

  • Flexible hours;
  • Vacation time/unlimited vacation time;
  • Work-from-home options;
  • Student loan/tuition assistance;
  • Paid parental leave;
  • Free gym memberships/day care services/food;
  • Company events/retreats/outings.

Although these are not as highly requested as compared to health care, they have also shown to boost employee engagement on a global scale.

Many companies in Malaysia may find some of these perks as unusual, however, they increase employee attraction as much as retention. While your company does not have to include everything that is listed, it will be beneficial in the long-term to consider which ones match the company culture.

Implementing unique additional benefits into your basic package will boost your employee retention.

In fact, many successful companies in Malaysia are already doing it! Here are a few examples.

  • 123rf - Free food
  • KFIT - Free gym & fitness classes, beauty & spa sessions
  • Piktochart - Work-from-home options
  • Mindvalley - Weekly company events

Other Benefits Offered in Malaysian Companies

Maternity Leave

Over 50% of the Malaysian population are women, therefore most companies in Malaysia offer a standard 60-day paid maternity leave for their female employees. However, some companies have extended the paid leave period to attract more women to the workforce.

Update: With the Budget 2018 announced, the private sector will be encouraged to offer a 90-day paid maternity leave as opposed to the current 60-day paid maternity leave.

Company Trips

Hit a sales milestone? Many organisations organise events and company trips to celebrate achievements and, at the same time reward their employees for their fruitful work.

Travel perks do not have to limit themselves to airline companies.

Even here at HealthMetrics, the team organises annual company trips to celebrate and educate the team. The company puts emphasis on bonding time and creating friendships for a better desirable work environment.

Whether your company includes unique perks to its benefits package or not, it is important to make sure that the primary employee benefits of health insurance are at least provided.

Cost of Corporate Insurance for Inpatient & Outpatient Care

Here is an overview of the approximated costs of buying corporate insurance (depending on company's size):

  • Inpatient: RM300-350/employee
  • Outpatient: RM550/employee

At HealthMetrics, we found that, on average, an employee will undergo 7 GP (General Practitioner) visits per year. As of now, this data corresponds with companies that have more than 100 employees.

Importance of Sufficient Medical Benefits to Employees

Increases Competition

Medical benefits are a great incentive that attracts highly qualified individuals to your company, therefore, widening your talent pool.

Decrease Operating Costs

As mentioned previously, potential employees are more likely to take on a lower salary with good health benefits than a high salary without any health benefits.

Boosts Productivity And Morale

Your company will have healthier employees. Healthier employees are more productive and energised in their day-to-day activities. Their ensuing level of enthusiasm and hard work will motivate other employees in the office. In addition, this will reduce their number of sick days, leading to better engagement and higher growth rates for the company.


In a Malaysian context, investing in employee benefits may be expensive (or in some cases inexpensive), however, the cost of the employees leaving their position far outweigh the cost of employee benefits. The costs of losing talented people in your team and recruiting others are much greater than getting corporate health insurance, which is the current most desirable employee benefit and the basics of any benefits package.

Employee Attraction & Retention

Desirable employee benefits increases competition for your company, therefore attracting the best talents in your region. Meanwhile, your current employees are more likely to stay in the company, therefore promoting growth without significant disruptions.

Enhancing Productivity

Retaining your best employees with medical benefits boosts the overall productivity in the workplace because your employees are healthy and satisfied with their rewards.

Although health insurance and other company perks may appear to be additional costs for your company, their implementation will reap higher returns in the long run. Listen to your employees’ needs and your company will grow.

Topics: Employee Engagement