High-value jobs, skilled talent in high supply at Iskandar Malaysia

SINGAPORE (June 18): Most companies setting up a division overseas struggle to find the right talent to fill their offices. However, customer experience management firm Aegis had no such difficulties when it set up its office in Iskandar, Johor a year ago. Within the first three months, the company was able to hire 500 people. More than 90% of them were locals from Johor.

Aegis is one of 16 companies benefiting from the burgeoning talent pool in Iskandar Malaysia, via the Global Business Services Iskandar programme. GBS Iskandar was launched by i2M Ventures, a wholly-owned subsidiary of Malaysia’s government investment agency Khazanah Nasional, to advise and assist businesses that are setting up their operations in Iskandar Puteri, particularly shared services such as knowledge process outsourcing, business process outsourcing and IT process outsourcing.

The partnership signing between ACCA director of strategic partnerships Stephen Shields (right) and Zulfiqar (left) at Jen Hotel, Puteri Harbour in Johor

Since its inception in 2016, GBS Iskandar has invested significant resources to help numerous companies move their GBS operations to the burgeoning district. Other success stories include consulting firm Frost & Sullivan and professional services firm KPMG. With its strategic location, Iskandar is set to become a hub for high-value, knowledge-based jobs, says Zulfiqar Zainuddin, managing director of i2M Ventures. This is especially because i2M also provides unique talent development programmes for companies that intend to hire fresh graduates. The agency also works with universities to attract top talent to the region, while keeping the environment conducive for employees.

“Our initiative focuses on three very important areas: talent attraction, development and retention. We work very closely with companies and universities to make sure they are very aware of the types of talent we are trying to bring into Iskandar. As you know, this is a new area with companies newly coming in. People are not familiar with the amenities in this place, or what kinds of jobs are available here. We play a very active role to make sure there is awareness about the opportunities here, for both companies and potential employees,” he says.

Incentives abound

In the 2017 AT Kearney Global Services Location Index, Malaysia ranks as the third most attractive offshoring destination for companies. In fact, the country has remained within the top three positions since 2004.

Meanwhile, universities in the state of Johor are producing roughly 15,000 graduates annually — accounting for a tenth of Malaysia’s graduates. Some 70% of these graduates specialise in business, engineering and IT — disciplines that are especially suited to GBS functions. The state also boasts a young and competitive workforce. About 60% of Johor’s workforce is aged between 20 and 39. The average annual salary for an employee in Johor is about a third of that in Singapore.

Since 2013, GBS Iskandar’s talent development initiatives have created an additional 4,342 high-value jobs. Companies that need assistance hiring in a foreign environment can work with GBS Iskandar to meet their needs. Zulfiqar says the programme adopts a “consultative and collaborative” approach to understanding each company’s talent requirements. “We do not just give prescriptive incentives to companies, because that can be quite restricted. We first ask the companies what their pain points are and how we can structure a set of incentives that will address these challenges,” he says.

Since 2013, GBS Iskandar’s talent development initiatives have created an additional 4,342 high-value jobs

A common scenario is that a company intends to hire fresh graduates, but realises that it may need about six months to train them for the role, Zulfiqar says. “We then propose a training subsidy for those first six months, to help ease the company’s productivity challenges. The training subsidies can be equivalent to half of the salaries of the fresh graduates who are hired. This helps companies invest in developing their talent and not be too concerned about [limited] productivity during this period,” he says.

GBS Iskandar has also formulated the Campus Connect initiative to reduce any skill gaps. Last year, it sent 43 students from universities in Johor for Oracle skills training. About half of them were subsequently hired by technology companies VTC Holdings and IDM Lab. Under the Campus Connect programme, the Association of Chartered Certified Accountants has signed a partnership with i2M to work together on developing GBS talent.

Another common challenge that companies face is in relocating experienced managers from other parts of the world to Iskandar. “This can be expensive because it involves providing housing options. We work with companies to identify how many of these manager-level employees they need to bring in, and how much it will cost. We then can provide a certain amount of allowance to help address the cost of bringing in experienced talent. The whole objective is to make their operations sustainable, because the experienced managers can train up the local employees,” he adds.

Furthermore, companies can also tap the GBS Iskandar Readiness Enhancement and Dedicated Skilling programme. Under the REDS programme, GBS Iskandar helps companies screen for potential candidates and trains them ahead of placement, based on requirements stipulated by the companies. The training covers areas such as communication skills, language and adapting to local culture.

With the support network available, it is perhaps then of little surprise that more companies from Singapore are taking a step forward into GBS Iskandar. The infrastructure available is especially conducive for start-ups that are scaling up their operations, Zulfiqar notes. In the last month alone, four Singapore technology start-ups — dealing with e-commerce, digital learning and software — have set up operations in the Iskandar region. “In the [past] year, we [have seen] more realisation of Iskandar Puteri and Singapore as one strategic region,” he says.

Strengthening human capital

For talent who come to Iskandar Puteri, it is not all work and no play. GBS Iskandar has taken steps to ensure a fun and vibrant living environment for employees who make the move, such as sporting events. The GBS Iskandar “running gang” heads for a run together every Wednesday.

The group has grown to include about 60 people from companies in the area, Zulfiqar says. GBS Iskandar also organises consultation roundtables to gather feedback from companies on the living environment. There is also the GBS Iskandar Steering Committee, which comprises government stakeholders, telecoms companies, landlords of the commercial buildings and the companies participating in the GBS Iskandar programme. Through the committee, companies are able to have a say in everyday issues affecting the community. For instance, Zulfiqar explains, the committee was able to act on feedback provided about the frequency of buses.

With the combination of financial incentives and a vibrant environment for young talent, Zulfiqar reckons more companies are likely to consider setting up shop in GBS Iskandar. He invites those who may be interested in finding out more to the GBS Iskandar Summit in September. There, companies can get a better sense of the growth potential of Iskandar, he says. “There are companies that have considered coming to Iskandar, but perhaps felt that the timing was not right. They wanted to wait and see if there’s more development. Now is the time,” Zulfiqar says.