Inside Malaysia: 5 employee benefits trends employers shouldn’t miss

Attracting and retaining top talent in Malaysia’s evolving job market is no small feat. While salary remains a key factor, employee benefits have become a crucial differentiator. 

A robust benefits package does more than just tick a box – it shapes workplace culture, enhances wellbeing, and influences why employees stay or go.

Yet, many companies still treat benefits as a “set-it-and-forget-it” initiative, failing to engage employees in ways that truly matter. As Tim Pratte, CEO of Selerix, puts it: “Employees don’t wake up in the morning thinking about their benefits. And I don’t blame them. Most benefits materials are dense, boring, and make assembling IKEA furniture look fun.”

To stay ahead, businesses must rethink their benefits strategy, ensuring employees not only understand what’s on offer but also see real value in them. Here are five key trends shaping Malaysia’s employee benefits landscape:

1) Mental health support takes centre stage

Mental health is no longer a side note in workplace discussions – it’s a critical factor in employee well-being and business success. A supportive work environment can boost morale, productivity, and retention, while neglecting mental health can lead to burnout, absenteeism, and higher turnover.

With 15% of working-age adults experiencing mental disorders and global productivity losses due to depression and anxiety reaching US$1 trillion annually, organisations must take proactive steps to safeguard employee wellbeing.

In Malaysia, the stigma around mental health persists, preventing many from seeking help. Employers can break down these barriers by:

• Implementing Employee Assistance Programmes (EAPs) to provide confidential support
• Offering access to therapy and mental health resources
• Encouraging open conversations about wellbeing
• Leveraging telemedicine for psychological support

A workplace that prioritises mental health doesn’t just help employees – it builds a culture of trust and resilience.

Also Read: Salaries in Malaysia set to rise in 2025

2) Retention strategies need a refresh

With talent in high demand, companies must work harder to keep their best people. According to the PwC Asia-Pacific Workforce Hopes and Fears Survey 2023, only 59% of Malaysian workers are satisfied with their jobs, and nearly 17% are highly likely to switch employers within the next year.

Retention isn’t just about offering a bigger pay – it’s about creating an environment where employees feel valued and see a future for themselves. Businesses can boost retention by:

• Providing competitive salaries and performance-based incentives
• Embracing flexible work arrangements, such as hybrid and remote models
• Strengthening health and retirement benefits
• Recognising and rewarding employee contributions

A well-structured benefits package can be the difference between an engaged, loyal workforce and a revolving door of talent.

3) Managing medical inflation is a growing concern

The cost of health care in Malaysia is climbing at an alarming rate, with medical inflation exceeding 12% annually. Contributing factors include an ageing population, advancements in medical technology, and economic fluctuations. The introduction of the 8% Sales and Services Tax in 2024 is expected to push costs even higher.

To manage these rising expenses while ensuring employees receive adequate health care, companies should:

• Optimise health insurance plans to provide maximum coverage at sustainable costs
• Promote preventive health care and wellness initiatives
• Offer subsidised medical check-ups and screenings

Encourage employees to adopt healthier lifestyles through workplace wellness programmes

Balancing cost management with comprehensive healthcare benefits is a delicate act, but those who get it right will see long-term gains in employee health and productivity.

4) Wellbeing is more than just a buzzword

Employee wellbeing has evolved beyond just offering gym memberships and health insurance. Today, it encompasses physical, mental, emotional, and financial health. A holistic approach to wellbeing can improve job satisfaction, engagement, and overall performance.

Findings from WTW highlight key areas for Malaysian employers to prioritise:

• 97% prioritise physical wellbeing
• 95% emphasise emotional wellbeing
• 70% focus on social wellbeing
• 59% recognise the importance of financial wellbeing

To create a healthier, more engaged workforce, companies can:

• Introduce fitness and wellness programmes
• Offer generous paid leave policies
• Provide financial wellness support, such as budgeting workshops and retirement planning
• Promote work-life balance through flexible scheduling

Investing in wellbeing isn’t just good for employees – it’s good for business. A workforce that feels supported is more likely to be productive, motivated, and committed to their employer.

Also Read: Malaysia EPF scheme for foreign staff

5) Learning and development is a strategic investment

As industries evolve, skill shortages remain a pressing concern. To stay competitive, organisations must prioritise learning and development, equipping employees with the skills needed for the future of work.

Research from CIPD, the World Economic Forum, and McKinsey underscores the importance of upskilling in driving performance, innovation, and resilience.

However, many Malaysian employees still lack access to adequate training. Employers can close this gap by:

• Offering on-the-job training and mentorship programmes
• Providing e-learning courses and certification opportunities
• Partnering with government initiatives like the Human Resource Development Fund (HRDF) and SkillsMalaysia

An investment in L&D is an investment in a company’s future. Skilled employees drive business growth, reduce turnover, and enhance overall organisational agility.

The employee benefits landscape in Malaysia is shifting rapidly. Companies that treat benefits as a strategic priority – rather than an afterthought – will be better positioned to attract, retain, and engage top talent.

From mental health support and competitive retention strategies to managing medical inflation, prioritising wellbeing, and investing in L&D, these trends offer valuable insights for employers looking to stay ahead of the curve.

In a competitive market, the right benefits don’t just attract talent – they create a workplace where employees want to stay and thrive.