Mitigating Brain Drain among Malaysian Millennials: A Practical Framework for Policymakers and Employers

Mitigating Brain Drain among Malaysian Millennials: A Practical Framework for Policymakers and Employers

Nor Harlina Abd Hamid^1* Mohammad Bazli Abdullah² Nor Shahrul Nizam Muhamad Nor³ Nor Fazalina Salleh⁴

¹Faculty of Business and Management, Universiti Teknologi MARA, UiTM Kampus Puncak Alam, Selangor, Malaysia

²Federal Agricultural Marketing, FAMA, Selayang, Selangor, Malaysia

³Faculty of Business and Management, Universiti Teknologi MARA, UiTM Kampus Puncak Alam, Selangor, Malaysia

⁴Faculty of Business and Management, Universiti Teknologi MARA, UiTM Kampus Puncak Alam, Selangor, Malaysia

* Corresponding Author

DOI: https://dx.doi.org/10.47772/IJRISS.2025.908000305

Received: 30 July 2025; Accepted: 06 August 2025; Published: 08 September 2025

ABSTRACT

The issue of brain drain continues to pose a serious challenge to Malaysia’s growth, especially with many young professionals from Generation Y showing a strong interest in working abroad. Our previous research identified five key factors that influence this trend: compensation, career prospects, working environment, work-life balance, and overall quality of life. Building on those findings, this article shifts the focus from identifying the problem to offering practical solutions.

This study explore actionable strategies that policymakers and organisations can implement to retain top talent and create an environment where young Malaysians feel motivated to build their future at home. For the government, this means rethinking national policies on wages, investing in quality-of-life improvements, and designing smart returnee programs to attract skilled Malaysians back from overseas. At the organisational level, companies are encouraged to offer fair and transparent compensation, support healthier work-life integration, and build workplaces that reflect the values of younger generations.

More than just economic levels, the solutions discussed in this article take into account the emotional and social needs of today’s workforce. Generation Y is looking for meaning, balance, and a sense of belonging both in their professional lives and in the broader community.

By understanding and addressing these expectations, Malaysia has the potential to not only reduce brain drain but also strengthen its competitiveness in the global talent race. This article provides a timely and practical roadmap to help turn that vision into reality.

Keywords: Brain Drain, Generation Y, Talent Retention, Organisaional Strategy.

INTRODUCTION

Brain drain continues to challenge Malaysia’s economic trajectory, especially because so many young professionals from Generation Y who make up more than half the workforce are still thinking about leaving. While previous research has outlined the pull factors compensation, career prospects, working environment, work-life balance, and quality of life, this article aims to translate these insights into strategic responses from policymakers and private sector stakeholders. It’s no longer just a theory; tackling these issues is critical if Malaysia is to retain its brightest talents and foster their growth within the country.

The issue of brain drain is not new to Malaysia, but in recent years, it has taken a more concerning turn especially with the increasing number of young professionals from Generation Y seriously considering opportunities abroad. These individuals, typically born between 1981 and 1996, make up a significant portion of the workforce and are vital to the country’s economic aspirations, especially its aim to become a high-income nation.

Malaysia has made commendable efforts in talent development, including initiatives in education, upskilling, and entrepreneurship. However, many of these efforts fall short when it comes to retaining talents. The question is no longer whether brain drain exists, but rather how to address it effectively. Generation Y is driven not just by salary, but also by work-life balance, personal growth opportunities, and overall quality of life. If these aspects are not met locally, they are more than willing to explore greener pastures overseas.

Our previous study proposed a conceptual framework that identified five critical determinants influencing the intention to migrate: compensation, career prospects, working environment, work-life balance, and quality of life. These factors are closely tied to both public policies and organisational practices, meaning that solutions must involve cooperation between governments, industry leaders, and society at large.

This article aims to take that conversation forward. Instead of simply identifying why young Malaysians are leaving, it asks: what can be done to encourage them to remain? This study argue that a multi-level response is needed, which one that improves not just salaries but also societal conditions, career pathways, and meaningful engagement. By understanding what truly matters to Generation Y, Malaysia can begin to build a future where its young talent sees long-term value in staying.

This expanded discussion will explore what these interventions could look like, and how both government bodies and private organisations can take practical steps toward reducing brain drain and building a resilient, motivated, and future-ready workforce.

Insights from the Previous Framework

The previous conceptual framework highlighted three particularly strong predictors of brain drain intention: a) Inadequate compensation in local job markets
b) Poor work-life balance, particularly in urban centres
c) Lower perceived quality of life, including public services and governance

This underscores the need to look beyond financial considerations and focus on enhancing the overall quality of life for individuals.

LITERATURE REVIEW

The Malaysian government can introduce tax incentives for companies that align salaries with regional or international standards, (Kana, 2018) particularly in high-skill sectors such as technology, engineering, and finance. Apart from that, it is important to focus should be placed on upgrading public healthcare, safety, green infrastructure, and transport accessibility (Lim, 2019), especially in second-tier cities. Promoting regional development will distribute opportunities more evenly, reducing urban outflow. Malaysia could also introduce initiatives to encourage its citizens to return whether for a short period or permanently by making the transition home smoother and the experience more fulfilling. These may include expedited permits, relocation grants, or dual employment opportunities with international firms. Furthermore, private employers should conduct annual salary audits to ensure fairness and transparency, which are key demands among Millennials. Offering performance-linked bonuses, share options, and international exposure may further entice retention. In terms of promoting Work-Life Integration, flexible work hours, hybrid remote work policies, and mental health support (Holland & Martin, 2015) are increasingly seen as necessities, not perks. Companies that truly support work-life balance often find it easier to attract and keep good people.

Younger employees often align with socially responsible employers. Initiatives such as sustainability programs, diversity and inclusion, and employee empowerment strengthen emotional commitment to organisations. Beyond individual policy or company-level changes, Malaysia must aim to build a cohesive ecosystem where talents see long-term career and life value in staying. Key elements include Strong public-private partnerships in innovation and R&D, investment in future skills such as digital economy, AI,  sustainability and Transparent governance and reduced bureaucratic hurdles.

METHODOLOGY

This follow-up paper adopts a qualitative and conceptual approach (Shrestha, 2011; Siraj et al., 2020), aiming to build on the insights gathered from our earlier study on the determinants of brain drain among Generation Y in Malaysia. Instead of collecting new primary data, this paper focuses on connecting theory with practice, specifically, translating those findings into feasible strategies for government and private organisations.

The methodology is exploratory and descriptive in nature. It draws upon a wide range of sources including academic literature, government reports, policy papers, media articles, and international case studies. This allows us to gain a more comprehensive view of how different strategies, both domestic and global that can be contextualised and potentially applied in the Malaysian setting (Docquier, 2014; Harnoss, 2011). Particular point will emphasis on lessons learned from countries that have faced similar brain drain challenges, such as India, Ireland, and South Korea (Kerr et al., 2016).

A purposive review of literature was conducted to identify recurring themes and best practices (Beine et al., 2011; Di Maria & Lazarova, 2012) in addressing skilled migration. These include government-backed returnee programmes, improvements in urban infrastructure and living standards, flexible work initiatives, and employer branding strategies. Wherever possible, the reviewed policies are assessed through the lens of relevance, scalability, and cultural fit for Malaysia.

In addition to literature, this paper also takes into account stakeholder perspectives as reflected in employee surveys, human resource trend reports, and statements by Malaysian policymakers. Sources such as the Randstad Employer Brand Research, Hays Asia Salary Guide, and the World Bank’s regional policy briefs (Randstad, 2019; Hays, 2020; World Bank, 2015b) serve as reference points in understanding current sentiment and strategic gaps.

By combining these diverse inputs, this methodology provides a grounded but flexible basis for proposing interventions. It recognises that while no one-size-fits-all solution exists, practical models can be adapted and implemented incrementally, depending on sector-specific needs and available resources.

Ultimately, this qualitative approach allows for a deeper appreciation of the complex motivations behind Generation Y’s career decisions. It shifts the focus from merely understanding why young professionals want to leave Malaysia to identifying what systemic changes could make them want to stay. This methodology is particularly suited for policy-focused research where the aim is to inspire actionable, meaningful changes rather than merely describing the problem.

DISCUSSION AND FINDINGS

Based on the qualitative insights and review of current practices, this section discusses key findings on how various strategies can address the persistent challenge of brain drain among Generation Y in Malaysia. The discussion is structured around the five core determinants identified in the earlier conceptual framework: compensation, career prospects, working environment, work-life balance, and quality of life (Ghazali et al., 2015).

First, the issue of compensation continues to be a central factor in the decision to migrate. Malaysian salaries, especially in high-skill sectors, often lag behind those in countries like Singapore and Australia. Several global salary surveys and local workforce reports highlight this disparity. This study finds that addressing wage competitiveness either through government-mandated adjustments or performance-based schemes that could substantially improve retention.

Second, career development opportunities play a crucial role. Many young professionals leave not just for better pay, but for clearer career paths, mentorship, and access to global markets. Malaysian companies often lack structured development programs or cross-border exposure. Findings indicate that introducing talent mobility programs and innovation-driven roles can help retain ambitious professionals.

Third, the working environment which both physical and relational affects employee satisfaction. Toxic work cultures, lack of communication, or outdated management styles were frequently cited in employee feedback as push factors. Organisations that embrace flexible, supportive, and collaborative work environments stand a better chance at retention.

Fourth, work-life balance is becoming increasingly non-negotiable, especially post-pandemic. Generation Y values mental wellness, family time, and meaningful personal pursuits. Companies offering remote work flexibility, mental health support, and leave policies tailored to modern lifestyles are more attractive to younger professionals.

Finally, the broader quality of life including safety, healthcare, transport, and governance are also strongly influences migration intent. Countries with transparent governance, cleaner cities, and better social systems (Foster, 2018) are more appealing. Respondents in recent policy reports noted dissatisfaction with local urban infrastructure and public services as indirect drivers of emigration.

In conclusion, while financial compensation remains critical, this study highlights the growing importance of holistic wellbeing, purpose-driven work, and supportive ecosystems in retaining talent. A shift toward a more human-centric policy and organisational model may be the key to reversing the brain drain trend among Malaysian youth.

CONCLUSION AND FUTURE RESEARCH

This study has explored the complex interplay of economic, social, and institutional factors that influence the migration decisions of Malaysia’s Generation Y. By situating the discussion within both the lived experiences of potential migrants and the structural realities of the labour market, it contributes to the growing body of literature on brain drain while offering a Malaysia-focused perspective.

One of the most striking takeaways is that financial incentives alone are not enough. Generation Y is more concerned with finding purpose and balance in their lives than simply chasing higher pay. They are looking for work cultures that respect their time, leadership that values transparency, and systems that support their personal well-being. When these elements are lacking, it becomes much easier for them to consider opportunities abroad, even if that means starting over in a new country.

For policymakers, this calls for bold, forward-thinking reforms. Investments in public infrastructure, healthcare access, cleaner urban spaces, and smarter city planning are no longer luxuries, but they are essential components of retaining homegrown talent. Returnee initiatives, better housing schemes for young families, and co-investments with private sectors in skills development are areas worth exploring further.

From a theoretical perspective, the findings support the idea that migration decisions are rarely about money alone. They are shaped by a combination of income, career opportunities, quality of life, and a sense of belonging. This helps broaden existing models, which often focus heavily on economic factors, to include the social and personal motivations that matter just as much.

In practical terms, the paper highlights clear, actionable steps: creating fairer and more competitive salaries, building transparent career pathways, and improving everyday living conditions better transport, healthcare, safety, and green spaces. These are not just policy ideals; they are the kinds of changes people can feel in their daily lives, and which other countries have shown can make a real difference in retaining talent.

On the organisational side, there’s an equally urgent need for transformation. Companies must begin to rethink traditional HR models, offering more flexible arrangements, meaningful recognition, and career mobility. Building a strong employer brand today is as important as offering a competitive salary. In fact, employees often cite a company’s values and work culture as deciding factors which sometimes even overpay.

While this paper does not claim to offer a silver bullet, it provides a practical roadmap for change. The strategies proposed here should be viewed as complementary rather than standalone, each supporting the larger goal of nurturing a resilient, fulfilled, and locally committed workforce.

Future research could expand in several directions. First, there is value in conducting sector-specific studies to understand how brain drain plays out differently in industries such as healthcare, engineering, or IT. Secondly, more work is needed to capture the voices of those who have already migrated what pushed them, what could have convinced them to stay, and whether they see a future back in Malaysia. Longitudinal studies that track these sentiments over time would also help shape more adaptive policies.

Additionally, comparative studies between Malaysia and other ASEAN countries could reveal valuable insights on regional retention strategies. Lastly, as the world of work continues to evolve, future research should also look into the role of digital nomadism, global remote work, and whether traditional migration models are being redefined by technology.

In closing, addressing brain drain among Generation Y is not just about keeping people from leaving. It’s about creating a Malaysia they feel proud to stay in a place that matches their aspirations, supports their growth, and empowers them to build a meaningful life right here at home.

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