Enhancing productivity of Malaysia’s Small and Medium Scale Enterprises: A study of the labour skills issue

Productivity is the basis for increasing companies’ profits and countries’ Gross Domestic or National Procucts. To increase productivity labour skills need to be enhanced. This study examined issues and challenges that beset skills enhancement of Malaysia’s labour force, in particular, understanding the gaps that might exist between workforce qualifications and skills required by the industry. Primary data were gathered from the findings of a survey of 347 medium, small and micro enterprises from Malaysia’s thirteen states. The findings indicated that communication and teamwork were the most important skills required by the industry. Skills required within the next five years would be management and financial skills. The findings also revealed that there was skill mismatch between the workers’ lower qualifications and those required by the industry for the jobs concerned. In terms of policy implications, improvements were needed with respect to skills training so the labour force might be able to keep pace with the skills demanded by the industry, in line with Malaysia’s goal to be a high-income economy by the year 2020.