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Why is the Malaysian Government's Call for HR Software Adoption?

Updated: Jan 25

HR Software Adoption

Is your business still tethered to outdated spreadsheets and file folders for managing human resources? If so, you might be missing out on substantial benefits! The Malaysian government is actively urging companies, regardless of size, to embrace HR software as part of its digital economy initiative. Research indicates that HR software not only enhances efficiency but also boosts engagement and ensures compliance.


In this article, we'll delve into the numerous advantages of HR solutions and shed light on the government's endorsement. By the end, you'll comprehend how implementing HR software can transform your business, just as it has for countless others in Malaysia.


Benefits of HR Software


Managing human resources is a critical facet of any business operation. Yet, many Malaysian companies still rely on manual processes and legacy systems, such as spreadsheets or paper records. These outdated methods result in inefficiency, increased costs, and compliance issues. Modern HR software solutions offer a remedy, allowing businesses to streamline HR processes, elevate the employee experience, and gain a competitive edge.


1. Cost Savings: HR software can lead to significant cost savings, with companies reducing HR expenses by up to 20% using HR information systems, according to the Malaysian Employers Federation (MEF). Automation and data integration eliminate manual tasks, minimizing the labor required for HR administration.


2. Improved Productivity: Centralizing data and providing self-service options for employees and managers, HR software enhances productivity. Employees can request leave, submit forms, or update profiles independently, while managers gain access to dashboards for faster reporting and decision-making.


3. Employee Engagement and Satisfaction: Companies using HR software reported higher job satisfaction among employees, as revealed by a Deloitte study. User-friendly self-service features and robust knowledge management keep employees informed and empowered, while analytics provide insights to enhance programs and policies.


4. Compliance Assurance: HR software aids businesses in staying compliant with complex labor regulations in Malaysia. Automation of compliance processes, audit trails, and customizable workflows ensure legal requirements are seamlessly integrated into daily operations.


Why the Malaysian Government Recommends HR Software


As part of its commitment to modernize and digitize tax services, the Inland Revenue Board of Malaysia (HASiL) plans to introduce mandatory electronic services (e-Services) via the MyTax Portal from 1 September 2023. The government actively supports HR software adoption through initiatives like the Malaysian Digital Economy Corporation (MDEC) to align with national digitalization and economic development goals.


The government's focus on HR technology stems from its desire to strengthen the digital ecosystem, support SMEs, and drive positive outcomes demonstrated by research, such as the 20% HR cost reduction reported by the MEF and increased engagement levels confirmed by Deloitte.


Furthermore, HR software aligns with the government's labor rights and payroll policy objectives, facilitating compliance with regulations. The government's own experience with HR digitalization in the public sector showcases the transformative power of HR software, influencing its promotion to private companies.


HR Software Use in Malaysia


The government's push for HR technology adoption is making an impact, with surveys indicating a growing usage of HR software among Malaysian businesses. While only 26% of SMEs were using HR information systems in 2021, large enterprises and multinational corporations are increasingly transitioning to HR technology.


Prominent global vendors like SAP, Oracle, and Workday, as well as local systems like EP Asia's ePerform, are gaining traction. These systems cater to various HR functions, including payroll, leave management, recruitment, employee records, and performance reviews.


Early adopters, like Alliance Bank and Ayam Brand, have experienced significant improvements in HR productivity through automation. As the government actively encourages HR software adoption, particularly among SMEs, the momentum is expected to accelerate.


WorkSmartly: The Ideal Choice for Malaysian Businesses


Amidst the push for HR software adoption in Malaysia, WorkSmartly HRMS emerges as a standout choice. Offering comprehensive features tailored for Malaysian regulations, a user-friendly interface, and local expertise, WorkSmartly HRMS covers the entire employee journey from recruitment to analytics.


With a secure and scalable platform, WorkSmartly HRMS empowers business owners and HR teams to focus on what matters most – people.


WorkSmartly HRMS 5M can offer several advantages to HR teams in managing the challenges effectively.


  • Multi-Country

  • Multi-Company

  • Multi-Workgroup

  • Multi-Policy

  • Multi-Workflow


Visit worksmartly.com and explore a free demo to experience the transformative capabilities of WorkSmartly for your business.

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