Salary expectations amongst Malaysia’s employees are on the rise, yet most employers are planning to award only modest increases this year, according to recruiting experts Hays. The highest proportion of candidates surveyed for the 2018 Hays Asia Salary Guide are expecting a salary increase of more than six per cent (55 per cent).
The guide also reveals that 62 per cent of employees in Malaysia are already unhappy with their current level of compensation placing more focus on what the year will bring in terms of salary increases either in a current job or a new role.
Employee salary expectations contrast sharply with nearly half of employers planning salary increases of only between three and six per cent this year. Only 39 per cent of employers plan to award salary increases of more than six per cent.
The 2018 Hays Asia Salary Guide includes salary and recruiting trends based on a survey of more than 3,000 employers representing over six million employees in five market. In Malaysia, employers from 15+ industries were surveyed about remuneration trends for 2018. “The growing salary expectations of candidates is being driven by a number of factors including the rising cost of living especially in our largest cities,” said Tom Osborne, Regional Director of Hays in Malaysia. “In addition to this, many candidates are well aware of both Malaysia’s strong economy and the very low unemployment rate and so they believe they can find another job if the salary increase awarded by their employer this year does not meet their expectations,” he said. “While the economy in Malaysia is strong, employers are focused on the big picture and are taking a cautious approach to spending including salaries to counter a degree of uncertainty generated by economic conditions globally and Malaysia’s mid-year elections.”
Salary expectation mismatch poses dangers for employers
Hays research reveals that more than a third of employees in Malaysia plan to change employers this year with nearly half of them already actively looking for a new role. And 71 per cent are willing to relocate internationally for a job.
“Our Guide is a warning to employers to reconsider salary plans particularly for candidates in hard to fill roles,” said Tom. “A massive 96 per cent of employers in Malaysia responding to the 2018 Salary Guide believe skill shortages have the potential to hamper effective business operations over the coming year so its vital employees with their skills are kept on board.” “Employers need to start managing salary expectations ahead of their annual reviews, particularly if the company’s performance coupled with Malaysia’s strong economy is creating the perception that now is an ideal time to ask for a bigger pay rise,” said Tom. “Employers should also consider what other benefits they can offer to keep employees motivated.” “While salary and benefits remain the key top consideration for staying with an organisation or accepting a new role, our research shows non-financial rewards such as new challenges and the opportunity for greater work-life integration are also valued highly by employees,” said Tom.