By Yasmin Ramlan
KUALA LUMPUR, July 22 — More Malaysian women are leaving the workforce to become caregivers, with childcare the biggest barrier to their continued employment, revealed the World Bank’s Inclusive Employment Practices Survey.
World Bank senior economist Shakira Teh Sharifuddin said that according to the survey, while many companies are open to hiring women returning to work, some view them as “more expensive to hire” and remain hesitant to offer flexible work arrangements (FWA) due to concerns over productivity.
“Most firms acknowledge the value of hiring women, especially in productivity and talent acquisition. They also say, at least in their responses, that they do not engage in any discriminatory hiring practices.
“But caregiving challenges remain the biggest barrier in hiring more women. Around 40 per cent of firms said that benefits such as childcare, although not mandatory or required, make it more expensive to hire women,” she said during her presentation at the report launch, held at Asia School of Business here today.
The report also highlighted the urgent need to strengthen workplace inclusivity, especially as Malaysia’s working age population shrinks.
Shakira said while initiatives like FWA and childcare support exist, they are often limited to larger companies and urban areas. She emphasised the importance of expanding these policies to small businesses, informal sector workers, and those in suburban and rural areas to boost female labour force participation.
However, she said, when designing and communicating inclusive policies, they should not be created with only women in mind, as men, too, take on caregiving responsibilities.
“Men face similar challenges, and this is important for two reasons: it avoids reinforcing the perception that care work is solely a woman’s responsibility, and it ensures hiring women is not seen as the more expensive option,” she said.
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(From left) World Bank senior economist Shakira Teh Sharifuddin, Human Resources Minister Steven Sim Chee Keong, and World Bank country manager for Malaysia Judith Green during the launch of the World Bank Inclusive Employment Practices Survey at the Asia School Of Business, Kuala Lumpur on July 22, 2025. — Picture by HAFIZ OTHMAN/MEDIA SELANGOR[/caption]
Human resources not fully utilised
World Bank country manager for Malaysia Judith Green said Malaysia’s ageing population and dwindling workforce shows the urgent need to strengthen women’s participation in the labour market.
She pointed out that Malaysia is already seeing significant demographic shifts, with the proportion of citizens aged 65 and above projected to rise from 8 per cent today to 14 per cent by 2043.
“The working-age population had already begun to shrink since 2020, a trend that poses significant challenges for the labour market,” she said, adding that increasing women’s workforce participation is “one of the most promising ways forward”.
Despite Malaysian women being better educated than men on average, their labour force participation rate remained low at 56.2 per cent in 2023 — below the government’s 60 per cent target, and behind other Southeast Asia countries such as Thailand (68 per cent), Vietnam (70 per cent), and Singapore (76 per cent).
“This gender gap is problematic, both from an equity as well as from an economic perspective… and women’s underrepresentation in the labour market is a lost economic opportunity. It implies Malaysia is not fully utilising its human resources.
“In fact, a World Bank report a few years ago (Breaking Barriers, 2019) found that if female labour force participation rate in Malaysia was to rise to levels seen in advanced economies, then the country’s income per capita could grow by 26.2 per cent, equivalent to an annual gain of RM9,400,” she said.
While the Malaysian government has introduced various initiatives, including setting a 60 per cent target for female labour force participation under the Madani Economy Framework, Green said more must be done.
“Achieving such ambitions is not easy. Without employment practices that adequately support women’s caregiving responsibilities, such as flexible work arrangements and accessible childcare, many will continue to remain outside of the labour force or resort to informal work in order to balance family and employment,” she said.
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Image for illustration purposes only. — Picture via PEXELS/WILLIAM FORTUNATO[/caption]
Expand return-to-work programmes
Shakira said there is strong potential to build on Malaysia’s existing policies by phasing in new initiatives.
In the short term, she suggested strengthening return-to-work programmes like career comeback initiatives, which should be extended to include men.
She highlighted the need to expand such programmes to non-urban areas, targeting informal and part-time workers by matching them with opportunities based on their skills and experience, while stressing the importance of better enforcement of anti-discrimination measures especially for older workers and caregivers.
Shakira also said employers should be equipped with tools to manage productivity while offering FWA.
“This could involve providing training and clearer guidelines, especially for industries like manufacturing, construction, logistics, and healthcare, where physical presence is often required,” she said.
In the medium term, she said the focus should be on improving childcare provision, including more flexible options for working parents and caregivers.
Shakira also pointed to the need for a more consistent childcare infrastructure with support from both public and private sectors, adding that these efforts must be paired with continuous monitoring and evaluation to track progress and identify areas for improvement.
