Salaries in Malaysia increased by 5.0% in 2018, and are projected to increase by 5.2% in 2019, according to the Malaysia 2018 Salary Increase & Total Compensation MeasurementTM Survey by Aon, a leading global professional services firm providing a broad range of risk, retirement, and health solutions.
These rates indicate that wages here are increasing faster than in Singapore (3.8% in 2018) and in-line with Thailand where salaries increased by 5.2% in 2018. Indonesia experienced a 7.6% rise in wages – albeit with higher inflation and lower income base.
Amid volatility in global financial markets and oil prices, alongside the rising trade conflict between Malaysia’s largest trading partners, China and the USA, Malaysia’s economy remains resilient with a projected GDP growth of 5.0% this year.
Prashant Chadha, Managing Director, Talent, Rewards and Performance, Aon Malaysia & Philippines, said: “In the face of a growing economy and steady salary increases, employers must rework their compensation packages to ensure they can continue to attract and retain the best talent in Malaysia. An organization’s best performers are often able to command premium pay – and ultimately, play key roles in driving strong business results.”
Fresh graduates in tech most valued
According to the survey, fresh graduates working in technology and engineering-related fields are enjoying a pay premium (above general industry average) of 12.1%, 21.3%, and 23.0% respectively in the engineering, telecommunications and high-tech industries.
This is reflected in engineering and project design roles as well, which offered the highest starting salaries in the market for degree holders at over RM 3,500 per month. Meanwhile, fresh graduates working in IT services and e-commerce roles are paid 5.7% and 6.5% above the general industry average.
Employees in analytical earned top dollar
The survey also found that employers were committed to professionals with specialist skills sets, such as legal managers. They are also looking at key attributes such as innovation, critical problem-solving, and strong business acumen – as demonstrated by the pay premiums in the engineering and tech-related industries.
Rahul Chawla, Practice Lead, Talent, Rewards & Performance, Aon Malaysia, said: “As the country’s economy grows, employers must look to align their rewards practices with those of developed economies. Performance-driven rewards systems have become the norm, and productivity bonuses, sales incentives, and long-term incentives (LTI) are increasingly prevalent among Malaysian employers. These must be backed by fair performance assessment processes and robust corporate governance.”