Last updated on October 11, 2025
PUTRAJAYA, Sept 8, 2025 — Malaysia’s Deputy Prime Minister Datuk Seri Fadillah Yusof emphasized today that the future of small and medium enterprises (SMEs) hinges not just on policy support but on an internal shift in perspective—particularly, recognising skilled employees as assets rather than expenditures.
At the launch of the SME HR Conference 2025 in Putrajaya, Fadillah, who also oversees Energy Transition and Water Transformation portfolios, underscored that while the government continues to roll out incentives and initiatives aimed at bolstering growth and human capital development, meaningful transformation must start within each organisation. “Investing in talent is investing in the future of your business—and, ultimately, the nation,” he affirmed.
SMEs account for approximately 40% of Malaysia’s gross domestic product and employ nearly half of the nation’s workforce—a scale that underscores their pivotal economic role. Despite that, many of these businesses grapple with hiring the right people, retaining them long-term, and complying with evolving regulations—challenges that extend beyond individual companies and influence national competitiveness.
Fadillah urged SME founders to shift their HR paradigms: rather than treating human resources as a cost center, they should embrace strategic and growth-oriented HR practices. Data from SME Corp Malaysia supports this shift, revealing that companies with robust HR structures can grow 2.5 times faster and scale three times more efficiently than those without.
Looking ahead, he identified key HR trends set to reshape the future of work: AI-driven recruitment, skills-based hiring, hybrid working models, employee wellbeing, diversity and inclusion, agile performance management, and ESG-linked practices. These are not distant visions but emerging realities. Fadillah posed a pointed question: “Will Malaysian SMEs adapt quickly enough to capitalise on these trends? Those who do will thrive. Those who delay risk being left behind.”
