Direct recruitment system for foreign workers still at research stage, says KESUMA

Confusion over a proposed digital foreign worker recruitment system has prompted clarification from the HR Ministry, which says the initiative is still under evaluation with no decisions, agreements, or commitments made.

The Ministry of Human Resources (KESUMA) has taken note of various media reports and public discussions surrounding the proposed implementation of a digital foreign worker recruitment system, stressing that the proposal is still at the research stage.

According to the ministry, differing versions of the reports and interpretations have caused confusion among the public and industry. It emphasised that any statement suggesting a final decision has been made is untrue, misleading, and does not reflect the Government’s actual position.

Strengthening governance of foreign worker management

The proposal is part of the Government’s broader efforts to strengthen the governance of foreign worker management, taking into account its impact on the economy and the country’s reputation.

KESUMA shared that it has studied the entire foreign worker ecosystem and identified gaps, particularly in recruitment processes in labour source countries. One key concern is the issue of debt bondage incurred by foreign workers.

In response, the ministry is exploring the development of a digital platform based on AI technology to improve the foreign worker recruitment ecosystem as a whole.

Exploring direct recruitment through a digital platform

The proposed approach would allow for the direct recruitment of foreign workers by employers based on actual workforce needs. It will encompass the full process in source countries, including registration, selection, job matching, agreement of service contracts between employers and workers, and facilitation of worker dispatch.

Under this model, recruitment costs will be borne entirely by employers. This is aimed at reducing reliance on intermediaries and ensuring that no financial burden is imposed on foreign workers.

The proposal is said to be aligned with the principles of fair and ethical recruitment implemented by the International Labour Organization (ILO). It also has the potential to address issues such as human trafficking and forced labour, while supporting Malaysia’s efforts to achieve a Tier 1 rating in the United States Trafficking in Persons Report.

Scope limited to post-quota recruitment stage

KESUMA clarified that the proposal will only focus on the recruitment process in source countries at the post-quota approval stage. It will not interfere with pre-recruitment processes, including the role of regulatory agencies, quota approvals, or Government enforcement activities under existing legislation.

The system is expected to operate under KESUMA’s control in terms of policy and operations, with integration into existing Government systems such as the Foreign Worker Centralised Management System (FWCMS) and the National Integrated Immigration System (NIISe).

From a foreign worker management perspective, the ministry noted that the role of private employment agencies in Malaysia remains unchanged. Employers may choose to use the platform directly or through these agencies.

Engagement with industry and labour source countries

Currently, KESUMA is reviewing and refining the proposal through initial engagement sessions with labour source countries and industries. These discussions include collaboration with the technology provider of the FWCMS, which has been used since 2015.

The ministry noted that several key labour source countries, including Bangladesh, Indonesia, and India, have shown positive support for efforts to enhance transparency and operational efficiency.

Industry stakeholders have also expressed support. These include the Malay Chamber of Commerce Malaysia (DPMM), the Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM), the Malaysian Associated Indian Chambers of Commerce and Industry (MAICCI), and the Malaysian Employers Federation (MEF), which collectively represent close to 1mn members.

The Federation of Malaysian Manufacturers (FMM), representing more than 13,300 manufacturing companies, has also welcomed the proposal, reflecting industry demand for a more transparent and competitive system that can reduce reliance on middlemen and better control recruitment costs.

No decision, agreement, or commitment made

Despite ongoing discussions, KESUMA reiterated that all proposals are still in the evaluation stage. No decision has been made, and no commitment, appointment, or agreement has been entered into with any party to date.

It added that any future implementation will be subject to further consideration, including engagement with relevant ministries, industry stakeholders, and labour source countries, before proceeding to Cabinet approval.

Balancing labour market needs and national priorities

KESUMA reaffirmed its commitment to ensuring that any proposals related to foreign worker recruitment are implemented transparently, with integrity, and in line with national interests.

As the ministry shared, the approach being considered will prioritise industry needs and the stability of the local labour market, while ensuring that the welfare and protection of foreign workers are upheld in accordance with international standards.

At the same time, it said, the Government remains focused on strengthening local talent development as the main thrust of labour market reform, in line with the long-term agenda under the 13th Malaysia Plan (13MP) to reduce dependence on foreign workers.

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