With the rising cost of living, as well as the introduction of Goods and Service Tax in 2015, Malaysians expecting a significant pay raise will be disappointed to find out that local salary increases have declined by 0.4% to 5.2% in 2016, according to Aon Hewitt’s 2016 Total Compensation Measurement (TCM) Survey.
To make things worse, the report noted that despite a steady GDP growth at 4.2%, seeing as the CPI was 1.8% higher in November 2016 than the same month in 2015, the decline in salary increases translates to real wages diminishing for the Malaysian workforce.
“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,” it stated.
The biggest pay cheques went to analytical and strategic roles
Despite the diminishing real wages, strategic planners in managerial positions were found to earn RM2,500 more than all other managers across functions in Malaysia. This demonstrated the commitment of Malaysian employers to innovative problem-solving and entrepreneurial acumen, the report noted.
Among those in the high-tech industry, finance managers were paid 16% higher than the market midpoint. While HR managers in the same industry received 21% more.
“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 pointed out.
Rahul Chawla, practice lead – talent, rewards and performance, Aon Hewitt Malaysia, said: “The Malaysian economy and its businesses are at an inflexion point as they face challenges posed by the fourth industrial revolution. Amidst these disruptive times, the HR function needs to step up to develop new capabilities, reward high performance sustainably, and build a workforce for the future.”
Local employers value tech-savvy fresh graduates
As for the nation’s fresh grads, the survey found that more than half of the fresh graduates entering employment earned less than RM2,500 per month.
However, for those in the high-tech and engineering-related fields, salary outlooks remain optimistic as Malaysian employers are expected to continue paying a premium for these roles.
Fresh graduates in 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.
Prashant Chadha, managing director, Aon Hewitt Malaysia, said: “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.”
Original source: Human Resources
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