Aug. 20 (Bloomberg) -- Women in Malaysia who have stopped working to raise their families are being enticed to rejoin the labor market as the country tries to boost Southeast Asia’s lowest female workforce participation rate.
The government is collaborating with companies to increase child-care facilities, Rohani Abdul Karim, minister for women, family and community development, said in an interview. The ministry is working with companies including Citigroup Inc. and General Electric Co. to raise the female participation rate to 55 percent by 2015 from 52.4 percent now, she said.
Prime Minister Najib Razak has offered tax incentives to companies that establish nurseries and allow flexible work arrangements to encourage more women to resume their careers. With about two-thirds of women citing family as the main reason for leaving the workforce, alleviating child-care strains will support Najib’s efforts to spur economic growth and become a high-income nation by 2020.
“We are losing the asset; we have invested very heavily” in their education, Rohani said. “We need these people. We need the brains. We want to utilize all of them.”
According to data compiled by the World Bank, about 46.8 percent of Malaysia’s women of aged 15 to 64 were employed in 2012, the lowest rate in Southeast Asia. That compares with 78.6 percent in Vietnam, 70.8 percent in Thailand, 65.1 percent in Singapore and 53.4 percent in Indonesia, the data showed.
Malaysia’s women accounted for 68 percent of public university enrollment in the 2013/2014 academic year, according to government figures, underscoring the need to keep them in the workforce.
Attaining a higher female participation rate could provide Malaysian with a “growth dividend” of about 0.4 percentage points a year, according to a 2012 World Bank study. Australia is losing A$8 billion ($7.4 billion) a year from female graduates who don’t enter the workforce, Ernst & Young LLP said in a July 2013 report.
Most women drop out of the workforce to look after their children due to a lack of child-care facilities, Rohani said in Aug. 15 interview in Kuala Lumpur. To lure them back into the job market, the government is also assisting women to become franchise holders of businesses worth 50,000 ringgit ($15,785) or below, the minister said.
About two-thirds of 824 respondents in a survey by Talent Corp. Malaysia Bhd. and ACCA Malaysia Sdn. published in March 2013 cited raising a family as the main reason why women quit their jobs.
The cost of women leaving work isn’t just economic.
“If they leave the workforce, they’ll be dependent on their husbands for the income,” said Lee Hock Guan, senior fellow with the Institute of Southeast Asian Studies in Singapore. “So in case there’s a breakdown of the marriage, it’ll be harder for them to return to the workforce. These are the social consequences.”
In a Diversity in the Workplace survey last year of 122 publicly-traded Malaysian companies, only 6 percent had child- care centers, while less than a fifth provided mothers’ rooms.
About a third of companies offered some sort of flexible work arrangements, according to the report commissioned by TalentCorp, a government agency tasked with attracting and fostering talent to meet the needs of businesses.
Some companies have taken the lead in the country to retain female workers. The Malaysian unit of Citibank opened a child- care center for employees in 2010. The local units of Royal Dutch Shell Plc and General Electric offer benefits such as flexible working hours or extended maternity leave.
About 65 percent of Citibank’s employees in the country are women, with females accounting for about 35 percent of senior managers compared with the national average of 26 percent, according to Nikki Grant-Cook, country human resources director for the lender. All employees can negotiate for a two- or three- day work week, she said.
“We realize that in order to compete and grow as a successful business, we need the best talent available and our female employees are a critical part of our talent base,” Kuala Lumpur-based Grant-Cook said in an e-mail interview. “Citi has a high return rate after maternity leave. Many of our female employees go on to have families.”
CIMB Group Holdings Bhd., Malaysia’s second-biggest bank, has a child-care center, car parks for pregnant women and breast-feeding rooms for female employees who account for 59 percent of about 19,000 employees in Malaysia.
“We believe that a career break to take care of families or other reasons are legitimate reasons for anyone,” said Hamidah Naziadin, group chief people officer at CIMB in Kuala Lumpur. “As such, we should also welcome people back to the market because they have skills, knowledge and experience to contribute to the workplace and economy.”
The loss of women in the workplace has led to an imbalance in the workforce, with women holding just 7 percent of board seats of listed companies, Idris Jala, minister in the prime minister’s office, said in July 2013.
“We have a lot of talent that is hidden,” and it is good news that the government is embarking on more sustainable efforts to bring women back to the workforce, said Kamal Karanth, managing director of Kelly Services Inc. in Malaysia. “Efforts to improve the female labor participation ratio, especially within the 35-44 and 45-years-and-older age groups, will eventually boost the nation’s productivity level.”