Professional Services Productivity Nexus
OVERVIEW
Professional Services
The Professional Services subsector plays a critical role in the Malaysian economy, injecting high value-add to virtually every industry. Under the Malaysia Productivity Blueprint (MPB) launched in 2017, Professional Services has been identified as one of the nine priority subsectors, covering six professional disciplines: Accountancy, Advertising, Architecture, Engineering, Legal and Management Consultancy. Each of them plays an important part in building and powering the nation’s economic growth. It continues to record the highest productivity growth rates amongst all the nine subsectors, indicative of the latent potential that needs to be catalysed.
The establishment of the Professional Services Productivity Nexus (PSPN) under MPC is being led by industry associations and acting as a change agent to drive the productivity trajectory of this subsector. The PSPN is championed by Ts. Ir. Choo Kok Beng, CEO of Malaysian Service Providers Confederation (MSPC), focused on enhancing the productivity of professional services through common interest and digitalization goals. This initiative covers the four(4) thrusts of MPB: (1)Workforce: Building Workforce of the future, (2)Technology: Driving Digitization and Innovation, (3)Industry Structure: Making Industry Accountable for Productivity, and (4)Business Environment: Forging a Robust Ecosystem.
Productivity Performance
The Professional Services Subsector recorded a positive number of 11.4% of annual labour productivity growth compared to -4.6 in 2021. This is due to the active market exercises after the COVID-19 outbreak in 2020 and 2021. The industry players managed to bounce back and the digital adoption among MSMEs helps them to sustain in the industry.
Plus, it was shown that the Productivity Level for PS Subsector has jumped to RM82,869 compared to RM74,421 in 2021. However, the Professional Services Subsector is below the national level of RM 95,858 in terms of Productivity and is hoped to increase to level with the National target.
Challenges
The Malaysia Productivity Blueprint identifies four key challenges in the professional services sector:
- Shortage of Professionals: Professionals in Malaysia are paid less compared to developed countries. Graduates lack critical skills, like English proficiency and business knowledge. Addressing this requires industry-relevant curriculum and training at colleges and universities.
- Low ICT Adoption: Many professionals lack ICT skills, hindering sector progress. Encouraging technology adoption, like digital progress tracking, can help.
- Industry Structure: Most firms lack scale for large projects, and the industry is fragmented with 96% being SMEs. Forming cross-country consortiums and using performance-linked KPIs can boost competitiveness.
- Inconsistent Regulations: Contradictory regulations hinder sector growth. Regulatory review and consistency can promote alternative business models.
Overall, these challenges require strategic solutions to enhance productivity and competitiveness in the professional services sector.
