By Danial Dzulkifly
SHAH ALAM, July 4 — Working from home (WFH) should no longer be seen as a privilege but adopted as the default for roles that do not require physical presence, said economists, citing strong evidence for talent retention, cost savings, and broader national benefits.
Their remarks follow the Asean Summit 2025 in Kuala Lumpur, which saw traffic congestion easing significantly under a temporary WFH directive for civil servants and an advisory for the private sector.
Economist Geoffrey Williams, however, said current laws fall short of supporting this shift.
“WFH, work-life balance, and flexible working arrangements (FWA) should not be viewed as perks; they should be the norm. The law allows employees to request WFH and FWA, but employers are not obligated to approve them,” he told Media Selangor.
“Unless there is a specific reason (to be in office), such as use of machinery and equipment or the need for direct customer engagement, most jobs could allow for full or partial WFH and FWA.”
He added that evidence has shown flexible arrangements enhance talent recruitment, boost retention, and increase productivity across all skill levels.
“This is especially the case for younger and more highly qualified people, but it also appeals to older and lower-skilled workers.
“The benefits for WFH and FWA include both cost reduction and increased revenues, which together improve profitability. They also reduce turnover costs and the risk of losing talent. They lower costs on office space, utilities, and operations, while also saving employees’ travel expenses. Less commuting time means more hours available for work, which improves productivity.”
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A Zoom call meeting during a work-from-home session. — Picture via UNSPLASH/CHRIS MONTGOMERY[/caption]
Williams added that WFH can also help slow the country’s brain drain; a longstanding issue that has hindered Malaysia’s ambition of becoming a high-income nation.
“The brain drain can be helped by WFH and FWA if it is part of a wider, more humane approach to terms and conditions of work. It can even help Malaysians overseas to contribute talent back here by working remotely for local companies.”
Despite constant arguments from employers that WFH may lower productivity, Williams said evidence shows otherwise, adding that potential risks can be mitigated with proper systems.
“Case studies suggest there are very few risks to WFH or FWA and what risk there may be can be managed easily.
“Productivity concerns can be addressed through delivery targets instead of time targets, collaboration can be enhanced with online tools, and company culture can improve by promoting fairness and better work-life balance.”
However, Williams said, it is best for the market to determine WFH or FWA practices, rather than having a nationwide government mandate, and that the key policy intervention should be to make WFH and FWA the default option for jobs that do not require an on-site presence.
“In other words, employers would need to justify why on-site work presence is necessary,” he said, adding that a similar approach should be adopted for civil servants at both federal and state levels.
“By leading by example, the federal and state governments can push this agenda forward.”
Williams said WFH and FWA also help ease various traffic-related issues, including peak-hour congestion, traffic jams, accident rates, engine idling, and emissions, and are more effective than most other environmental interventions.
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Slow-moving traffic seen on the East Coast Expressway near the Gombak Toll Plaza, Kuala Lumpur, on February 12, 2024. — Picture by BERNAMA[/caption]
‘Wage-free pay rise’
Economist Samirul Ariff Othman shared Williams’ sentiment, and called WFH “a wage-free pay rise” that boosts employer branding without increasing payroll costs.
He cited data showing how remote work slashes absenteeism and reduces property costs.
“Global Workplace Analytics estimates that employers save (on average) US$11,000 per employee per year when staff work remotely half the time, with savings from smaller office space, lower energy use and reduced fit-out and maintenance costs.
“Grade A office rent(al)s in Kuala Lumpur, for example, average RM 8-10 per sqft per month. Reducing the floor space by 20 per cent on a 50,000 sqft lease can save between RM1 million and RM1.2 million annually, before factoring in energy savings.
“Over a typical five-year lease, the net present value of those savings usually outweighs the capital expenditure for laptops, virtual private networks and home-office stipends. Even a midsize tech firm could recover up to one percentage point of its earnings before interest and taxes margin.”
Samirul said documented cases also show that remote teams have nearly 30 per cent fewer unscheduled absences and up to 88 per cent lower attrition in call centres.
On the issue of brain drain, Samirul said WFH is not a silver bullet, but could help slow the outflow of talent from the country.
“Some 1.8 million Malaysians (about 5.5 per cent of the workforce) work abroad, more than double the global average, but when local talent can serve global clients from Penang or Kuching, the wage gap narrows after adjusting for living costs and taxes.”
Samirul lauded the government’s DE Rantau programme under the Malaysia Digital Economy Corporation as a strong example of efforts to position the country as a hub for location-independent work, benefiting both incoming nomads and locals who can work for foreign companies without relocating.
“WFH is unlikely to reverse the entire talent exodus — Singapore’s pay premium still entices high-skill professionals — but it does slow the outflow and keeps more consumer spending and tax receipts onshore,” Samirul concluded.
