PETALING JAYA: As Malaysia grapples with a greying workforce and widening skills gap, experts are calling for a fresh approach – rehiring retirees as consultants. They argue that doing so could be a game-changer for both businesses and emerging talent, as well address pressing economic challenges.
Universiti Teknologi Mara Academy of SME and Entrepreneurship Development coordinator Dr Mohamad Idham Md Razak said Malaysia can draw valuable lessons from countries such as Japan and Singapore, which have successfully retained older workers through flexible employment and consultancy systems.
“They have adopted phased retirement schemes, tax incentives for part-time employment and skills-matching systems to fully utilise experienced labour while ensuring opportunities remain for younger workers.
“Malaysia’s demographic landscape requires a balance adapting such strategies to local industries, especially in manufacturing and digital services. This could be key to managing population shifts while supporting growth.”
Mohamad said transitioning individuals over 60 into consultancy roles, instead of full-time positions, could yield substantial economic gains. Firms, he said could harness deep expertise without bearing the cost of permanent employment, including pensions and long-term benefits.
“This allows experienced professionals to contribute through flexible roles, spurring innovation and mentorship while preserving their economic influence and supporting domestic demand.”
He added that retaining seasoned workers also preserves institutional memory, which is a significant advantage in sectors requiring specialised knowledge.
Mohamad Idham said if implemented correctly, the shift would not disadvantage younger workers. Instead, he said a multigenerational workforce which combines retiree consultants and new entrants could enhance overall productivity and foster knowledge transfer.
“With the rise of Malaysia’s services and knowledge-based economy, there’s a strong foundation for this. Companies could retain critical skills by engaging skilled retirees in part-time advisory or training roles, mitigating the loss of talent through retirement or emigration.”
He added that this could also help address M’sia’s twin challenges of skill shortages and brain drain – in critical sectors such as healthcare, engineering and finance, while reducing reliance on foreign labour.
He, however, cautioned that such benefits will remain out of reach if labour policies do not support flexible work patterns and if industries maintain rigid hiring criteria.
Malaysian Employers Federation (MEF) president Datuk Dr Syed Hussain Syed Husman said MEF views flexibility as vital when shaping retirement policy. Rather than enforcing a blanket increase in the retirement age, decisions should reflect individual health, fitness and skill relevance.
“Allowing older employees to transition into mentorship, consultancy or part-time roles will optimise their expertise and create space and career pathways for younger workers.”
Syed Hussain added that any move to raise the retirement age must be accompanied by tailored strategies and industry-specific policies, alongside initiatives such as upskilling, job creation and support for business growth.
“With the right safeguards, such a policy can help Malaysia unlock the full potential of its ageing workforce without undermining job prospects for younger generations.”
Minister in the Prime Minister’s Department (Law and Institutional Reform) Datuk Seri Azalina Othman Said recently proposed that the mandatory retirement age be raised from 60 to 65. She said it was a loss to make capable individuals retire at
60 when many remain energetic
and productive.
Malaysia has raised the retirement age three times – from 55 to 56 in 2001, to 58 in 2008 and to 60 in 2012 under the Minimum Retirement Age Act, which took effect in July 2013.
