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Human Resource Outsourcing Trends in Malaysia

by joshina on Apr 12, 2019 Computers and Technology 77 Views

Human resources play a vital role in any business by taking care of employee benefits. Human resources have a major responsibility like recruitment & selection, payroll, employee benefits and termination. Due to budgeting and cost-cutting, many companies have no room to hire HR team which leads to outsourcing. In Asia-Pacific, Malaysia has a prominent role in HR outsourcing which increasing the trend of HR consulting firms for different HR Services Malaysia like recruitment, payroll, training, learning and development programs to achieve the company’s goals despite the cost saving. Service companies and manufacturing are outsourcing HR in Malaysia.

Here Am going to discuss what are the factors, trends and the HR functions that were outsourcing and the benefits of outsourcing HR services in Malaysia .

Factors that lead to HR outsourcing:

Every company has its own factors that influence to outsource the HR services. Below are the most common factors which lead to outsourcing HR services in Malaysia.

· The government of Malaysia has a very tough labour laws
· Low expertise of resources in Malaysia
· Expansion of the company services globally
· The risk involved in hiring
· Employees time consumption will be reducing the productivity
· Less availability of the required knowledge and skill set.

Benefits of outsourcing HR

There are many benefits to outsourcing HR services for a company. Manufacturing and services companies are most likely benefited by HR outsourcing in Malaysia.

Operational and labour costs like software maintenance will be reduced which impacts on the revenue of the company and delivers significant changes in savings.
Access to world-class capabilities and enable the company to increase the leverage of global knowledge by outsourcing and offshoring.
Can find the required resources globally and fill the gap
Increased productivity and efficiency of the employee and leads to reach the companies goals.
The global expansion of the company can be done by outsourcing and offshoring the HR services
In-house HR workload will be reduced
Flexibility, accountability and disciplined HR services will be increased
Supply and demand gap will be reduced
Keeping up with the trends and changes happing around the globe
Conversion of fixed cost to variable cost can be done which also increases the companies cost saving.
Functions that are outsourcing by the firms
Training, learning and development is plays and major role by the HR which tends to outsource by the firms

Recruiting the best talents throughout the globe will definitely a time consuming which in turn gives increase the outsourcing of HR services.
Payroll is also a major part of outsourcing
Records and data management
3rd party and vendor management
Expats management
Performance management
Travel and expenses management of the employees
These are the major functions that Malaysian firms tend to outsource.


Firms of Malaysia has engaged in Human Resource outsourcing and offshoring more than 40%. Despite the financial benefits of the firms the concern of HR outsourcing is increased to achieve the non-financial benefits like the efficiency of the employees and to fill the demand and supply gap. The future HR trends in Malaysia will be revolved around the outsourcing of global talents, unlike the traditional HR methods. Significant and incremental growth of the transformation from the traditional methods to outsourcing and offshoring will be experienced by the Malaysian firms.



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