Facing talent challenges, Malaysian companies project an overall 5% increase in salary in 2024.
By Maggie Mancini
A compensation survey by WTW reports that employees in Malaysia working in industries such as insurance, banking, technology, media and gaming, shared services and outsourcing, asset management, and oil and gas, received a more competitive annual base salary in 2023 compared to those in education, real estate, construction and engineering, and biopharma and life sciences.
This is based on a market competitiveness index where the annual base salaries of jobs across industries were ranked against the base salary of jobs from the general industry. When benchmarked against the general industry, companies in banking, technology, media, and shared services and outsourcing industries have exceeded expectations, offering annual base salaries that surpass the general industry overall median. Notably, companies in the asset management and oil and gas industries paid the highest annual base salaries last year.
On the other hand, companies in education, real estate, construction and engineering, and biopharma and life sciences lagged in their annual base salaries’ competitiveness.
For 2024, companies in Malaysia continue to project an overall salary increase of 5% for executives, management, professional employees, and support staff. Although this is slightly lower than the 5.6% salary increase in 2023, the average salary increase continues to show steady rise over the last few years. Similar trends are observed across various industries in the country this year. However, inflationary pressures and concerns over a tight labour market continue to influence factors beyond salary increase budgets.
“Although inflation is slowing down from the heights of recent years, the labour market in Malaysia is shifting,” says Tan Juan Jim, head of work and rewards for Southeast Asia and Malaysia at WTW. “Voluntary turnover and attrition continue to increase and reaches a high of 17.5% 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.”
The WTW survey reveals that industries such as banking, insurance, technology, media, and shared services and outsourcing hired the largest number of millennials and Gen Z employees last year. Since 2020, the Gen Z workforce in Malaysia has grown rapidly at a 50% year-on-year increase in terms of percentage of the total workforce. By 2025, WTW expects that millennials and Gen Z will form more than 70% of the workforce in the country.
“The traditional employment model is losing its inevitability as employees do not have the options in the gig and passion economy,” says Jim. “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 to the future workforce.”
At the same time, the Malaysia corporate workforce faces three possible challenges in growing its Gen Z population. These include young talent seeking opportunities abroad, setback in education due to the pandemic, and constant lookout for new positions by the same pool of younger workers to satisfy their needs for flexibility, control over their own destiny, and scalability of earning through their own efforts.
