"Even the hair dressers use foreign workers," the official Bernama news agency quoted him as saying. He said some firms might be forced to close if they could not get foreign workers.
But Najib said the foreigners must have valid papers.
"Hiring them legally will also benefit companies that are trying to raise output and exports," he said.
Malaysia is driving thousands of illegal workers out of the country and will then allow them return legally to plug the shortage.
Malaysia estimates about 400,000 illegal immigrants have left the country since it threatened late last year to round them up, prosecute and deport them unless they made their own exit. Now it plans to recycle them back into the country as legal workers.
Malaysia suffers a chronic shortage of labour and relies heavily on cheap workers from poorer neighbour Indonesia, just a ferry-boat ride away, to take up unskilled or semi-skilled work at construction sites, plantations and restaurants.
Estimates of Malaysia's total illegal labour force ranged up to about a million ahead of the amnesty, but the government is concerned these workers do not pay tax and instead place a large burden on the state, which runs a large budget deficit.
An estimated 200,000 to 400,000 illegal immigrants still remain in the country and risk being caught in next month's crackdown involving up to 500,000 officials and volunteers.
In Malaysia, illegal immigrants can be fined and jailed before being deported. Men under the age of 50 can be caned.