Professionals in a wide range of industries in Malaysia are likely to receive salary increments that are above the Asia-wide average in 2019. This is one of the key findings in the Hays Asia Salary Guide 2019, a report that highlights salary and recruiting trends based on responses from Hays Asia operating markets Mainland China, Hong Kong, Japan, Malaysia, and Singapore.

The report has revealed that close to half (48 per cent) of employees in Malaysia, which is ten per cent more than the average across Asia, could receive a salary increase from above three per cent but less than or equal to six per cent.

On the other hand, compared to the country’s historical norms, employers are expecting to give fewer employees a raise this year (three per cent in 2018 vs 13 per cent in 2019).

Salary the Key

Salaries remain the primary consideration for employees in Malaysia. Although 55 per cent of employees claim to be ‘satisfied’ with pay levels, only four per cent claim to be ‘very’ satisfied.

According to Hays experts, employers looking to retain their best talent should review their salary increment plans, particularly because close to seven in ten employees (68 per cent) cite compensation packages as the key reason for seeking out new roles, and it is the top most reason for staying with a current employer.

Malaysia candidates have also raised concerns over the transparency of pay level setting. Although 53 per cent of employees feel that transparency is highly important, only 15 per cent strongly agree and 22 per cent slightly agree that their organisation is transparent in this area.

“With the economy growing, business activity increasing and hiring levels rising, employees may begin to wonder why this improvement is not being passed on to them in terms of compensation packages, perhaps leading them to rival organisations that could meet their salary expectations. Employers looking to keep employee satisfaction levels on salary matters should, therefore, be more upfront about how the management reviews and distributes employees’ pay rises,” comments Tom Osborne, Managing Director at Hays Malaysia.

Bonuses and Benefits

The Hays Salary Guide 2019 reveals that slightly fewer staff are guaranteed bonuses as compared to previous years. While three in five (63 per cent) employers are awarding bonuses to all staff in 2019, this number is down from 66 per cent in 2017.

On top of offering bonuses, a clear majority of companies (87 per cent) offer additional benefits to financial packages. Health and medical benefits remain the primary offering.

Malaysia leads the way in Asia in offering a car or car allowances to employees as an added benefit. While the rest of Asia lags in adopting such practice, with only one in five (23 per cent) companies providing it, half (51 per cent) of Malaysia employers offer this benefit.

Raises

“For employees who do not feel that their compensation package matches up to their worth, we advise them to reach out to employers and request salary increases,” adds Tom. “More Malaysia employees are asking for raises with more than half (55 per cent) of those who do proving successful, the highest number in Asia.”

“However, those requesting raises should consider the possibility of rejection and thus keep an open mind to potential responses from employers. Instead of salary increments, employees might be offered non-monetary benefits, improved work-life balance or a salary review at a fixed date in the near future. Failing that, employees could stand to benefit in becoming more active in the recruitment market, as the improving economy and optimistic business outlook are leading to greater hiring activity in Malaysia.”

Compared with Asia

The 2019 Hays Asia Salary Guide reveals that salaries across the region rose less than they did in the previous year, with 15 per cent of employers saying that salaries remained unchanged as opposed to nine per cent in 2018. Japanese companies witnessed the greatest levels of stagnation, with 20 per cent seeing no change.

In addition, 45 per cent of organisations in Hong Kong, 34 per cent in Singapore and 45 per cent in Malaysia grew salaries by three to six per cent, though these numbers are also down from 2018 levels. However, ten per cent of companies in Mainland China increased salaries by more than ten per cent.

Over the coming 12 months, organisations in Malaysia (48 per cent), Hong Kong (45 per cent) and Mainland China (44 per cent) expect salaries to increase by three to six per cent, while those in Japan (52 per cent) and Singapore (40 per cent) predict increases of up to three per cent.

Employees have similar expectations, with those in Japan (42 per cent) and Singapore (29 per cent) believing that they can look forward to increases of up to three per cent, while employees in Hong Kong (35 per cent) and Malaysia (31 per cent) are more optimistic, hoping for three to six per cent increments. Employees in Mainland China are the most bullish, with 44 per cent believing that their salaries will rise by more than 10 per cent in 2019.

Employees in four of the five regions polled cited ‘salary and benefits’ as the most common response as to why they are looking for a new employer, with 68 per cent of employees at Malaysian companies being the highest proportion with salary on their mind, followed by Hong Kong, Singapore and China (66, 60 and 57 per cent, respectively). Only individuals in Japan favoured ‘new challenges’, though remuneration was their second choice at 52 per cent.

At 58 per cent, companies in Japan are most likely to award their employees bonuses of at least 50 per cent in 2019, while 14 per cent of companies in Singapore expect to pay out no bonuses at all. Employers in Singapore (85 per cent), Mainland China (88 per cent), Japan (83 per cent) and in Malaysia (85 per cent) cite ‘individual performance’ as the primary reason for awarding bonuses, while in Hong Kong they were related to ‘company performance’ (84 per cent).

More employees in Asia are being awarded raises in 2019, with research showing that 22 per cent had raise requests accepted. Employees in Hong Kong are most likely to see pay rises granted, where 30 percent have been successful. By contrast, 19 per cent of Malaysian employees saw pay rise petitions denied, while 68 per cent of employees from Mainland China are not likely to make an appeal for salary increments.

Get your copy of the 2019 Hays Asia Salary Guide by visiting https://www.hays.com.my/salary-guide/index.htm or by contacting your local Hays office.

Last updated on March 19th, 2019