News: 2024 Projections for Malaysia: High pay raises predicted towards retaining talent relocating to Singapore and the Middle East

Compensation & Benefits

2024 Projections for Malaysia: High pay raises predicted towards retaining talent relocating to Singapore and the Middle East

The Compensation Survey, conducted across 600 organizations in Malaysia, indicates that corporate employees will continue to receive substantial pay raises to retain competitive talent seeking promising career growth opportunities.
2024 Projections for Malaysia: High pay raises predicted towards retaining talent relocating to Singapore and the Middle East

Malaysian organisations continue to project an overall salary hike of 5% for executives, management, professional employees, and support staff, according to a Compensation Survey conducted by WTW, a global advisory firm.

The survey, titled ‘Malaysia Total Compensation Survey,’ encompassed 600 companies spanning various sectors, including Financial Services, Tech, Media and Gaming, Shared Services, Real Estate, Construction & Engineering, Biopharma and Life Sciences, Energy and Natural Resources, Education, and other industries.

Malaysia Total Compensation Survey: Key Findings

The salary trends survey showed higher pay for employees in all sectors in Malaysia compared to those in Education, Real Estate, Construction, Engineering, Biopharma, and Life Sciences.

  • Surprisingly, in comparison to the General Industry, organisations in Banking, Technology, Media, Gaming, and Shared Services surpassed expectations, with base salaries exceeding the overall median.
  • Furthermore, employees in Asset Management and Oil and Gas sectors received the highest annual base salaries in 2023. In contrast, companies in Education, Real Estate, Construction, Engineering, Biopharma, and Life Sciences lagged behind in annual base salary competitiveness.
  • Moving forward in 2024, Malaysian companies anticipate a 5% salary increase for executives, management, professional employees, and support staff. While slightly lower than the 5.6% increase in 2023, the average pay increase has consistently risen in recent years.
  • Similar trends are observed across various industries in the country this year. However, factors beyond salary increase budgets, such as inflationary pressures and concerns over a tight labor market, continue to influence the landscape.

Malaysia Total Compensation Survey: Key Findings

Tan Juan Jim, Head of Work and Rewards, Southeast Asia and Malaysia, WTW said, “Although inflation is slowing down from the heights of recent years, the labour market in Malaysia is shifting. Voluntary turnover and attrition continue to increase and reach a high of 18.5% in 2023 compared to 16.5% in 2022. This trend looks set to continue in 2024. Employers in Malaysia will continue to face significant talent challenges, including the attraction and retention of key talent. They will need to stay focused on balancing the entire package of rewards they offer, both monetary and non-monetary, to remain competitive and align with employees’ needs and wants.

Millennials and Gen Z to comprise over 70% by 2025

The survey indicates a shift in the workforce landscape, with Banking, Insurance, Tech, Media, Gaming, and Shared Services & Outsourcing industries hiring the highest number of millennials and Gen Z employees last year. This led to a remarkable 50% increase in the hiring of Gen Z individuals in Malaysia over the last three years. Looking ahead, it is projected that by 2025, the combined representation of Gen Z and Millennials in the workforce will surpass 70%. This suggests a growing influence and presence of younger generations in the Malaysian job market.

Jim commented, “The traditional employment model is losing its inevitability as employees now have options in the gig and passion economy. The passion economy is one where it is built around creators with a purpose and provides alternative ways of making money, innovative paths towards professional fulfillment, and unprecedented career opportunities for the future workforce.

In the context of the passion economy, where job security is no longer the primary focus, understanding the emerging group of Gen Z employees becomes paramount. Organizations that move towards providing greater work flexibility, including offering a choice of remote, onsite, or hybrid working, will attract and retain more talent. This trend of working offers Gen Z more options to have multiple side hustles while maintaining their traditional economy jobs.”

Pay hike related with challenges in the workforce dynamics 

The workforce in Malaysia is confronted with three potential challenges related to the increasing population of Gen Z individuals. The obstacles or issues that need to be addressed concerning the growth and integration of the Gen Z demographic within the corporate sector include:

Young talents seeking opportunities in Singapore and the Middle East: A significant number of young and talented individuals are exploring career opportunities in other countries, particularly in locations like Singapore and the Middle East, suggesting they are not satisfied with the career growth opportunities available in Malaysia.

Setbacks in education due to the pandemic and accelerated career options fueled by technology: Malaysia’s education sector faced significant setbacks due to the pandemic, and young talent faced delays in joining the workforce during 2020-2022; therefore, a surge was projected last year. Additionally, advancements in technology, including Artificial Intelligence, further fueled opportunities for young talent to pursue their careers at an accelerated pace, possibly outside the traditional educational pathways.

Gen Z more into Job Hopping: The young talent in Malaysia is constantly in search of new opportunities driven by their desire for flexibility, control over their career path, the potential to scale their earnings based on personal efforts, and the aspiration to find work that gives them a sense of purpose. The young talent actively seeks roles that align with their individual needs and goals, focusing on aspects such as autonomy, financial potential, and a meaningful sense of purpose in their work.

Jim commented, “Winning the talent race will require employers to leverage analytics to understand their current workforce and forecast future workforce within their organization. Developing a compelling employee value proposition that encompasses a comprehensive view of total rewards, including both financial and personal well-being benefits, is important for employers in Malaysia to adapt to the unique attributes of the generational and future workforce.”

Read full story

Topics: Compensation & Benefits, Strategic HR, #HRCommunity, #Trends

Did you find this story helpful?



How do you envision AI transforming your work?

Your opinion matters: Tell us how we're doing this quarter!

Selected Score :