Key challenges faced by Malaysian businesses
The survey asked respondents to rank the key challenges that their organisations will face in 2019. Hiring the right talent is unsurprisingly the most significant challenge overall.
Respondents in public practice rank this much higher (64%) compared to the corporate sector (36%), as they depend largely on a skilled workforce. This could explain why staff costs is again ranked higher by public practice (55%), marking it as the second highest challenge, given the need to incur higher staff costs to attract the right talent.
In its 2017 report, the Audit Oversight Board cited that there was growth of staff costs and increasing proportion of managerial audit staff within the last two years among the top 10 audit firms in Malaysia.
Regulatory changes is the second most significant challenge, reflecting a strong concern at an organisational level of the possible effects of changes in government policies alluded to earlier.
Interestingly, accountants and finance professionals in public practice indicate that they are more affected than their counterparts in the corporate sector – this may well be due to the need to advise their clients on adapting to such changes.
Both sectors are concerned about rising operating costs with corporate sector respondents ranking it higher than public practice, probably due to their costs being more diverse.
According to SME Corporation Malaysia’s third quarter 2017 survey, over two-thirds of small and medium-sized enterprises (SME) have reported a 20% yearly increase in operating cost as a result of increased material prices. This included utility bills, cost of fuel and gas for transportation, as well as higher salary and wages.