New report by Howden Employee Benefits examines the five key trends driving employee benefits in Malaysia

Employers across Malaysia are navigating significant hurdles in improving employee well-being, compounded by increasing mental health challenges and rising medical costs. Moreover, businesses face difficulties in retaining essential talent, largely due to a lack of learning and development opportunities for employees.

Jeffery Chan, CEO Malaysia said: “Addressing these concerns is critical. Companies that focus on enhancing employee well-being will foster a resilient and productive workforce. In contrast, those that neglect talent retention risks could find themselves lacking the skills and leadership that their company needs to innovate and thrive.”

Theme one: Mental health
Mental health concerns are on the rise in Malaysia, with common conditions including depression, anxiety, and eating disorders.

However, despite the growing prevalence of these issues, most Malaysians with mental health issues have not sought treatment. Key barriers may include the perceived stigma around mental health problems, cost of treatment, and difficulties accessing care.

Chan said: “Employers can play a crucial role in helping their workforce overcome mental health issues, whether that’s through offering Employee Assistance Programmes (EAPs), offering therapy, creating a safe and inclusive work environment, or reducing stigma in the workplace.”

Theme two: Talent retention
Key factors driving high employee turnover in Malaysia include inadequate compensation, limited career growth, poor work-life balance, insufficient recognition, and a lack of learning and development opportunities. Employers must urgently address these areas to retain the talent and skills essential for business success.

Chan said: “To mitigate brain drain, it’s important to align your benefits packages with the needs of your employees. While competitive pay is essential, employers can also boost retention by offering better enhanced learning and development opportunities, well-being initiatives, and flexible working arrangements.”

Trend three: Higher medical inflation
Like many countries, Malaysia has witnessed double-digit rise in medical inflation, for over a decade.

This rising cost of healthcare has been driven by factors such as an aging population, advances in medical technology, the prevalence of chronic diseases, increased private healthcare usage, and economic challenges like the depreciation of the Malaysian Ringgit.

Chan said: “Organisations urgently need to implement cost containment strategies to ensure they can continue to provide effective healthcare programmes to employees. This will allow them to continue to attract much-needed talent, whilst also keeping expenses under control”

Theme four: Employee wellbeing
Employee stress and burnout remains the top workforce concern for Malaysian employers. And there is strong evidence that prioritising well-being is a crucial element of staff retention. 

Organisations need to offer a diverse range of health and wellbeing benefits to foster a culture of health and to attract and retain talent. These could include comprehensive health insurance, mental health support, flexible work arrangements, fitness programmes, nutrition initiatives, wellness reimbursements, and more.

Chan said: “A well-rounded well-being programme should encompass physical, mental, and emotional health. By prioritising wellness, you can help your employees reduce the risk of illness, manage stress, and perform better at work.”

Theme five: Learning and development
The talent within your organisation is one of the greatest assets you possess. The research shows that Malaysian employees are increasingly focused on learning and development, but that businesses are failing to provide these opportunities. Ultimately, this will lead to employees who do not feel nurtured and look elsewhere.

Employers should consider options including on-the-job training, e-learning, mentorship, and various subsidies and programmes to support skill development. Doing this can help reduce the impact of labour/skills shortages on industry profitability.

Chan said:” Upskilling key employees helps you to plug gaps allowing you to innovate and meet your business goals. Ultimately, allowing your employees to flourish will position you as an employer of choice, able to retain the talent you need to make your business a success.”