Kuala lumpur: Deputy Prime Minister Datuk Seri Fadillah Yusof today reminded small and medium enterprises (SMEs) that while the government is committed to providing policies and incentives that support growth and human capital development, real transformation must begin within each organisation. Fadillah, who is also Energy Transition and Water Transformation Minister, said leaders must recognise that people are not merely resources but the driving force behind every successful enterprise.

According to BERNAMA News Agency, Fadillah emphasized that investing in talent is crucial for the future of businesses and, ultimately, the nation. He made these remarks while officiating the SME HR Conference 2025. SMEs play a crucial role in Malaysia’s economy, contributing 40 percent of the gross domestic product and employing nearly half of the national workforce.

Fadillah elaborated on the challenges faced by SMEs in areas such as attracting skilled talent, retaining employees, and meeting compliance requirements. These issues are not isolated but are national concerns that impact Malaysia’s competitiveness. He called for a change in mindset among SME founders, who often view human resource management as a cost centre rather than a strategic growth driver.

Data from SME Corp Malaysia indicates that SMEs with structured HR practices grow 2.5 times faster and scale three times more efficiently compared to those without such practices. Fadillah also highlighted emerging HR trends that will shape the future of work, including AI-driven recruitment, skills-based hiring, hybrid work arrangements, employee wellbeing initiatives, diversity and inclusion, agile performance management, and ESG-linked practices.

Fadillah concluded by stating that these trends are not mere possibilities but are already shaping businesses globally. The key question is whether Malaysian SMEs will adapt quickly enough to seize the opportunities they present. Those who do will thrive, while those who delay risk being left behind.