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The employment insurance scheme (EIS) can affect therecruitment and selection process in the organization. This first issue thatarises is on the job application in the organization.

Through the EIS, theemployers in the organization have to cooperate with the PERKESO in order tomatch the employees’ potential job or their job replacement after they losetheir former job. This issue can affect the recruitment and selection of theyounger generation for the job that being apply. Many young generations outthere, they still have no job and the EIS may limit the total of youngergeneration that being recruits in an organization. As part of the EIS, it isalso necessary to have an effective and efficient labour market that allowsworkers to quickly find new jobs matching their skills.

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There must be effectivejob search and placement services tailored for retrenched workers (Andrew,2017). Another issue arises by the EIS is an unsystematic recruitment andselection process. The employer may advantages this situation as they know thatthrough this EIS, the PERKESO will always fill the job demand in theorganization due to high number of retrench employees which result to unsystematicrecruitment and selection process. For example, when the organization is seekingfor a new employee they just making an advertisement but no recruitment and selectionprocess are happen. This is due to PERKESO will help the retrench workers tofit the job demand in the organization and what is the point of doing recruitmentfor the job. This situation will affect the organization productivity and weknow that the policy of recruitment and selection process will change due tothe EIS. This also related to thescheme might dwell into Active Labour Market Policies (ALMPs) which involve jobseeking, job matching, job placement and many more (Malaysia EmployersFederation, 2017).

The ALMPs are currently the responsibility of the Governmentfor example Jobs Malaysia, and The Institute for Labour Market Information andAnalysis (ILMIA) and is further supported by employers through contributions tothe Human Resource Development Fund (Malaysia Employers Federation, 2017). Otherthan that, the recruitment and selection of foreign workers also affected inthe organization. Based on Aruna (2016), most employers would prefer to hireforeign workers, especially for jobs in factories because they are moreavailable and affordable. Through the EIS, the organization will have lessopportunity to hire foreign workers for the job demand in their organization.The PERKESO will actively assist the retrench workers to get a job fit theminside the organization.

The foreign workers will have less chance to beabsorbed in the organization due to a long list of retrench workers to get inthe organization.

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