Employers in Malaysia have been warned that a failure to create more culturally diverse and inclusive working environments can have significantly detrimental effects on their businesses, including driving up the salaries of the people they hire.
Monica Viladot, managing director of executive recruitment company Monroe Consulting Group Malaysia, said there was a worrying tendency on the part of senior management within Malaysian companies to surround themselves with people from similar backgrounds, which often led to workplaces dominated by one particular ethnic group or gender.
“High performing companies have shown that diversity and inclusion are key drivers for employee attraction, engagement and retention resulting in improved business performance,” Monica said. “This can also play a key role in winning the war for securing the best people in key jobs.”
Monica said the scarcity of talent in Malaysia, particularly in a number of key industries such as technology, industry and consumer goods, and restrictive approaches to recruitment by focusing on one ethnic group or sex, lead to higher employment costs.
“If companies or sectors are limiting the number of professionals they can hire, the available professionals will benefit from high increases in their salaries, which does not necessarily reflect an ability to do the job, or performance,” Monica said. “In Malaysia, we are seeing job candidates expecting basic salary increases of up to 40 percent when they move to new companies, which is partly influenced by biased preferences from employers. This is obviously costing their businesses.”
Monica said hiring employees from the same background would normally bring just one point of view in a business environment. “While we understand that it is easier and more comfortable for many employers this way, it doesn’t mean it is the best for your company,” she said. “By sourcing employees with diverse backgrounds for your business you are also bringing different points of view to your company, and diverse ideas.”
“And in addition, by recruiting people from the same background you are also distancing your company from potential customers. Customers also have different inclinations that are better understood when your employees have different perspectives.”
She said that having a more diverse workplace had significant advantages. From an internal viewpoint, having talented professionals from varied backgrounds brought different perspectives, fostered personal growth from sharing different experiences, and reduced the cost of employment, she said. From an external viewpoint, companies were better able to understand the marketplace and could better connect to potential customers.
Asked to elaborate on these benefits from a recruitment point of view, Monica said diversity increased the chances of securing the right person for the job. “On the other hand, ethnic or gender preferences decreased diversity and could bring negative impacts: Biased preferences shrink the market, meaning there’s a real limitation on the talent you can find.”
“Malaysia is already a small market, with around 30 million people. There’s an increment on the number of professionals with high level of education and qualifications, but even though the number of professionals has increased recently, the demand of qualified professionals is higher,” Monica said. “Therefore there’s already talent scarcity and if we add to that ethnic and gender preferences the limitations are there and will be a real challenge for a company to find the person a company needs.”
Monsy Siew, executive director for people, performance and culture at KPMG Malaysia, said diversity and inclusion should form an integral part of any workplace given that it brought about more advantages than disadvantages.
“People need to challenge conventional thinking by embracing and hearing diverse viewpoints,” Monsy said. “Diversity in the boardroom or workplace creates more perspectives giving us a variety of options to consider, providing more opportunities to come up with innovative solutions.”
She said diversity allowed more creativity and innovation to surface, which was needed to constantly evolve and improve services, products and delivery. “There have also been reports of companies achieving greater returns when they have more than one woman on the board,” she added.
Monsy said KPMG had implemented a number of human resources strategies to foster inclusion, which included formalised flexible working arrangements for all employees, as well as time off for all staff to celebrate “four major festivals regardless whether staff celebrates it or not.”
But she said that “all the policies in the world” would not work without the full commitment and buy-in from the leadership team. “They have got to believe that diversity and inclusion will help them achieve their organisation’s vision and goals,” she said. “They have got to walk the talk in this agenda. Only then will it be successfully implemented.”
Andrew Hairs, group managing director for Monroe Consulting Group, which has recruitment operations is developing markets throughout the Asia-Pacific, including China, Indonesia, Thailand, Singapore, the Philippines, Chile and Mexico, said employing people from diverse backgrounds had been a key component of the international award-winning recruitment company’s success in rapidly expanding economies.
“Our diverse workplace has lowered employee turnover and ultimately contributed to the rapid growth of the company,” Andrew said. “Most important, it has created an environment that is energetic and welcoming of new ideas.”