MALAYSIA: In recent years, many Malaysians have sought better opportunities in Singapore to secure higher-paying jobs and strengthen their retirement savings.
Applications from Malaysians for jobs in Singapore have significantly increased, with recruitment agency ManpowerGroup Singapore reporting that job applications in the December 2023 to January 2024 period have doubled compared to the previous year.
Additionally, a report by Cultivar Staffing & Search indicates a 30% rise in Malaysian job applicants for the first quarter of 2024 compared to 2023.
According to HR Asia, as of 2022, about 1.86 million Malaysians have migrated abroad, with over 1.13 million settling in Singapore, according to V. Sivakumar, Malaysia’s former human resources minister.
Several factors, including better economic prospects and more appealing work environments, have contributed to the growing number of Malaysians moving to Singapore.
Singapore’s robust retirement system
One of the major factors driving this migration is Singapore’s superior retirement system, which outperforms Malaysia’s. The Mercer CFA Institute Global Pension Index ranks Singapore’s system fifth globally, while Malaysia ranks 32nd.
This ranking considers the adequacy, sustainability, and integrity of retirement income systems.
Singapore’s Central Provident Fund (CPF) and Malaysia’s Employees’ Provident Fund (EPF) offer interest rates above 2%, higher than the typical returns from basic savings accounts.
However, a report by the Khazanah Research Institute highlights a concerning issue in Malaysia — over 90% of EPF members under 30 years old cannot meet the minimum retirement savings target of 240,000 ringgit.
This further underscores the disparity between the two countries’ retirement systems.
Economic opportunities and wage gaps
Beyond retirement benefits, Malaysians are also drawn to Singapore by its strong economy and higher wages.
A 2022 government study found that two-thirds of Malaysians working in Singapore earn between S$1,500 and S$3,599 monthly, with 20% earning between S$3,600 and S$9,999.
In contrast, a survey by Salary Explorer found that 65% of Malaysian workers earn RM3,850 to RM9,890 monthly, with 20% earning less than RM3,850.
The wage gap, combined with slow wage growth in Malaysia, has left many workers struggling to keep up with rising living costs.
This economic pressure, coupled with limited household savings, has prompted many Malaysians to seek work abroad in search of better financial prospects.
Chen Rupeng, Mercer’s Head of Retirement for Asia, explains that migration to countries like Singapore is seen as a strategic way to improve retirement readiness, with many Malaysians hoping to achieve greater financial stability and better job opportunities.