11th November 2022 - 3 min read
A survey by asset management firm Mercer has indicated that employees in Malaysia can expect a median increase of 5% in their salaries next year. Revealed in its Total Remuneration Survey (TRS) 2022, the firm said that this marks a return to pre-pandemic levels seen back in 2019, which also reflects employers’ optimism regarding their business and overall market outlook.
Mercer’s report further indicated that Malaysia’s 5% median salary increment is higher than the Asia Pacific average of 4.4%. The overall median salary increase in Asia Pacific is found to range from a high of 7.1% (Vietnam) to the lowest 2.2% (Japan), highlighting the difference in pay progression between emerging and developed economies.
Furthermore, the survey also found that Malaysian employees in the retail and consumer goods industries are most likely to see the highest increase rate in salary increment in 2023 at 5%, up from 4.5% and 4.6% in 2022 respectively. The shared services and outsourcing (SSO), as well as high-tech industries are also expected to extend their 5% increment rate from this year to 2023, hinting at their relative stability despite headwinds like inflation and supply chain issues.
On bonus payouts, Mercer’s report predicts that employees from most industries can expect a higher payment in 2022 – with the exception of the high-tech industry. The SSO industry is projected to offer the highest bonus payout among all industries at 20.3%, exceeding high-tech’s forecasted 19.9%. This reflects the SSO industry’s growth potential, which ties in closely with the need for professional talent.
Meanwhile, the bonus payout for employees in the retail industry is forecasted to see the highest increase, from 8.1% in 2021 to 12.6%. This is followed by the consumer goods industry, with an expected increase from 13.7% in the previous year to 16%.
Career business leader of Mercer Malaysia, Koay Gim Soon elaborated that with Malaysia quickly bouncing back from the Covid-19 pandemic, companies – especially multinational companies – are ready to ramp up their business activities. As such, many will need to attract new talent.
“Nevertheless, larger firms will need to keep abreast of the latest rewards trends and developments to ensure they have a relevant and reliable talent pool. Small to medium enterprises (SMEs), which have relatively fewer resources, on the other hand, need to double down on their business priorities while ensuring that their compensation and benefits packages are competitive in order to attract and retain the right talent,” said Koay.
“While a robust compensation strategy remains critical, employee engagement should also be prioritised as a retention strategy, especially to address employees’ needs such as physical and mental well-being, work-life balance, career progression, and more,” Koay further stated.
Finally, Mercer’s survey indicated that while existing employees can expect better renumeration package from their employers, more companies are planning to adopt more restrain in their hiring outlook in 2023. This is as 30% of organisations surveyed said that they intend to employ more people next year, as compared to 39% for 2022. On the other hand, 1% said that they plan to decrease their headcount in 2023, in comparison with 3% in 2022.
Mercer’s Total Remuneration Survey 2022 was conducted between April and June this year, polling 637 organisations across 17 industries in Malaysia – with 98% of them being MNCs. Meanwhile, employee management data and software provider ECA International also said back in October that employees in Malaysia can expect to see a real salary increase of 2.2% in 2023.
(Sources: The Sun Daily)
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