Malaysian employees looking forward to a hefty increment this year will likely be disappointed.
The Aon Hewitt’s 2016 Total Compensation Measurement (TCM) Survey found that the local pay raise have declined by 0.4% to 5.2% in 2016.
This is a hard pill to swallow for many, especially with the rising cost of living exacerbated by the weak currency and also the introduction of Goods and Services Tax in 2015.
The higher food prices have pushed the inflation up by 1.8% in December 2016, and the lower salary increment means lower real wages for the workforce in the country.
“As a result, employers are pressured to rework their compensation packages to engage their talent more effectively. Performance-driven reward systems will also become the norm, and place a premium on an organisation’s most effective performers,” the survey stated.
However, it’s not all gloom and doom. For those in managerial roles in strategic planning, they were found to earn RM2,500 more than all other managers across functions in Malaysia.
Finance managers and HR managers in the high-tech industry also saw higher pay with 16% and 21% more than the market midpoint respectively.
“This is further evidence that this industry as a whole more readily invests in their people as an invaluable asset to the organisation,” the report noted.
Fresh grads may struggle financially as the survey found that more than half of the fresh graduates entering employment earned less than RM2,500 per month.
Unless they are in the high-tech and engineering-related fields, where salary outlooks remain optimistic.
Those who take up engineering, R&D and project management roles were offered the highest starting salaries — more than RM3,500 per month — while those in high-tech industries were paid 27% more than those in property and construction.
“Fresh graduates, while inexperienced, are digital natives that possess relevant skills in today’s market, and will be key to success in the future of work.
Furthermore, these economically challenging times have placed great pressure on Malaysian businesses to redefine their talent needs. The workforce demographic is being reshaped year on year, and employers don’t hesitate to pay for critical talent,” said Prashant Chadha, managing director, Aon Hewitt Malaysia.