M'sian manufacturing body urges govt support for automation, job redesign to tackle labour shortage
KUCHING (June 21): The Federation of Malaysian Manufacturing (FMM) has suggested the government introduce targeted incentives for automation and support for job redesign to maintain manufacturing as a competitive and inclusive sector.
According to FMM president Tan Sri Soh Thian Lai, while manufacturers are investing heavily in automation and digitalisation, these transitions require capital, time and skilled talents, which remain in short supply.
He said the latest Department of Statistics Malaysia (DoSM) data had confirmed that manufacturing wages in Malaysia were rising steadily and surpassing national averages.
'Employers in the sector remain committed to offering fair and competitive compensation, but urgent support is needed to address persistent labour shortage.
'The reliance on foreign workers stems from a shortage of willing and skilled local workers, not from any strategy to suppress wages.
'A balanced, data-driven and skills-based human capital strategy is crucial for us to remain competitive and inclusive,' he said in a statement, issued in response to DoSM's Monthly Manufacturing Statistics, which indicated that the average salary in the manufacturing sector rose to RM3,460 per month in April this year, reflecting a 1.2 per cent year-on-year increase.
In comparison, the average monthly salary across all formal sectors stood at RM3,441 in the fourth quarter of last year, highlighting that manufacturing wages continued to outperform the national average, Soh pointed out.
Additionally, he said total wages paid in the manufacturing sector climbed to RM8.31 billion in April 2025, marking a 2.4 per cent year-on-year increase.
He added that the median wage across all formal sectors was recorded at RM3,045, while manufacturing median wages ranged between RM2,764 and RM3,052, well above the national minimum wage of RM1,700.
'FMM acknowledges that the data clearly demonstrates manufacturing wages in Malaysia are not only competitive, but are continuing to rise steadily.
This affirms that employers in the sector are offering fair compensation, and it also counters the claim of the workers being underpaid.
'Despite competitive wage levels, the manufacturing sector continues to grapple with acute labour shortages, especially in 3D (dirty, dangerous, and difficult) job categories.'
He emphasised again that the local workers were not being displaced by cheaper foreign labour, adding that hiring foreign workers involved considerable costs and regulatory compliance.
'Furthermore, even when wages offered exceed the national minimum wage, many of these roles remain unattractive to the local job-seekers.'
As such, he recommended the government to expand technical and vocational education and training (TVET) programmes and industry-led training initiatives to the manufacturing sector and strengthen them, as well as to formalise informal workers and improve the enforcement of wage-related regulations.
'The government should also establish tripartite labour planning councils for collaborative workforce strategies.
'We reiterate our support for a voluntary, productivity-linked Progressive Wage Policy (PWP) that encourages wage growth aligned with skills enhancement and measurable performance, rather than arbitrary increases.
'A business-friendly and voluntary PWP, grounded in clear performance metrics, would gain manufacturers' support and ensure that wage increases are sustainable and linked to worker capability,' added Soh.
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