Salary increases in Malaysia declined by 0.4 percent to 5.2 percent in 2016, according to the 2016 Total Compensation Measurement (TCM) Survey study by Aon Hewitt.
With GDP growth steady at 4.2 percent but CPI at 1.8 percent 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 organization’s most effective performers.
Technologically-savvy fresh graduates more valued by Malaysian employers
Salary trends remain optimistic for fresh graduates as Malaysian employers are expected to continue paying a premium for jobs in high-tech and engineering-related fields.
The gulf in pay for specialized talent will also shape the way employee demographics are structured in the future of work.
Roles in Engineering, R&D and Project Management offered the highest starting salaries to fresh graduates--more than RM3,500 per month--while fresh graduates in high-tech industries are paid 27% more than those in property and construction.
Throughout the nation, more than half of the fresh graduates entering employment earned less than RM2,500 per month.
"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,” says Prashant Chadha, Managing Director, Aon Hewitt Malaysia.
“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."
Employees in analytical and strategic roles earned top dollar
Strategic planners in managerial positions earned RM2,500 more than all other managers across functions in Malaysia--demonstrating the commitment of Malaysian employers to innovative problem-solving and entrepreneurial acumen.
Finance managers in the high-tech industry were paid 16 percent more than the market midpoint, while HR managers received 21 percent 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 Aon Hewitt Malaysia 2016 Total Compensation Measurement (TCM) Survey has lifted the lid on emerging trends in pay, Total Rewards and their connection to employee performance and engagement,” says Rahul Chawla, Practice Lead -- Talent, Rewards & Performance, Aon Hewitt Malaysia.
“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."