Talent with niche skills in Malaysia can expect to profit in 2018 with many employers willing to pay more to secure these candidates in areas where there are skill shortages, according to recruiting experts Hays. Economic forecasters predict an increasingly stronger economy in Malaysia in 2018 but, according to the latest Hays research, employers are planning to take a conservative line on salaries to keep costs down so they can make the most of improving conditions.
The 2018 Hays Asia Salary Guide reveals 49 per cent of employers in Malaysia plan to award salary increases of only 3-6 per cent in the year ahead. The 2018 Guide is based on a survey of more than 3,000 employers across Malaysia, Mainland China, Hong Kong, Japan and Singapore representing over six million employees and identifying the key salary and recruiting trends for the year ahead.
“Our Guide shows that most companies in Malaysia are more than willing to go well above the average when hiring those with niche skills and in areas of skill shortage,” said Tom Osborne, Regional Director of Hays in Malaysia. “For example, specialised roles in some areas of sales, IT and accountancy & finance are experiencing skill shortages and thus commanding substantial salary increases,” he said.
“However, for the most part, salary increases will be modest so candidates are advised to do their homework on what their job role and industry is paying before deciding to move job roles in search of a higher salary.” “Given these salary trends, the need for employers to communicate the process behind salary increases to staff will be even more important in 2018, particularly if the economy continues to show the strong improvements we saw in 2017 and are likely to see in 2018, creating the perception that there should be more budget for salary increases,” said Tom.
The 2018 Hays Asia Salary Guide shows that most employers in Malaysia (50 per cent) awarded salary increases from between 3-6 per cent during their last review period. A further 29 per cent of employers increased salaries by more than six per cent, 13 per cent of employers increased salaries by up to three per cent and eight per cent gave no increases at all.
Looking ahead, 49 per cent of employers will increase salaries by 3-6 per cent in their next review while 39 per cent plan increases of more than six per cent. Nine per cent plan salary increases of up to three per cent and three per cent will offer no salary increases at all.
How Malaysia compares
The 2018 Guide shows employers in Mainland China are again the most generous when it comes to salary increases with 51 per cent planning increases of more than six per cent in 2018 and 35 per cent intending to increase salaries from between 3-6 per cent. Nine per cent expect to award increases of up to three per cent and five per cent will offer no salary increase.
In Singapore, 49 per cent of salary reviews will result in an increase from between 3-6 per cent and 14 per cent will offer more than six per cent. Five per cent of employers plan no increases and 32 per cent modest increases of up to three per cent.
In Japan, 60 per cent of employers plan salary increases of only up to three per cent in their next review and 12 per cent plan no increases at all. Only 18 per cent will award increases from between 3-6 per cent while a modest ten per cent plan increases of more than six per cent.
49 per cent of employers in Hong Kong will increase salaries from between 3-6 per cent, five per cent will offer no salary increase, 24 per cent will increase salaries up to three per cent and 22 per cent will increase salaries by more than six per cent.
The majority of employers in Malaysia (93 per cent) award staff benefits against the average 83 per cent reported for all five countries surveyed. The most popular benefit in Malaysia by far is ‘health/medical’ benefits nominated by 92 per cent of employers. Next up was ‘car/car allowance’ (58 per cent) and ‘life assurance’ for workers (52 per cent).
In 2018, 55 per cent of employers in Malaysia plan to award bonuses to more than 50 per cent of staff, a three per cent decrease from the figure reported last year.
Most of our Malaysian respondents said bonuses would be based on ‘company performance’ (90 per cent) and ‘individual performance’ (87 per cent). 35 per cent cited ‘team performance’.
Candidate salary expectations
Of the candidates surveyed in Malaysia, 62 per cent are unhappy with their current level of compensation, but 58 per cent did not ask for a pay rise during their last review. The largest proportion of candidate respondents in Malaysia (55 per cent) expect a pay rise of more than six per cent while 27 per cent expect a salary increase of between 3-6 per cent.
Diversity stalls: Number of women in management and foreign employees in Singapore falls
A greater focus on gender diversity needs to be a goal for employers in Singapore in 2018 after new research shows the number of women in management is going backwards, according to recruiting experts Hays.
This is just one of the key findings from the 2018 Hays Asia Salary Guide which in its 11th year, highlights salary and recruiting trends based on responses from more than 3,000 employers across Mainland China, Hong Kong, Japan, Malaysia and Singapore.
Last year’s research showed women held 31 per cent of management roles in Singapore – an improvement of the 27 per cent in 2016, but the figure in the latest research is just 30 per cent.
The 2018 Hays Asia Salary Guide also shows a drop in the number of organisations with a formal diversity policy in Singapore – 58 per cent to 53 per cent. And of those companies with a dedicated diversity policy, only 29 per cent claim to adhere to it “well”.
“We are seeing some gains in gender diversity in Singapore in certain sectors, but we need more women rising up the ranks in business so there is a pipeline of talent to the top including board roles,” said Lynne Roeder, Managing Director of Hays in Singapore.
“Our Guide shows organisations in Singapore – and elsewhere in Asia – continue to struggle with the diversity issue – but if businesses are to manage ever increasing levels of complexity and challenge, they will need a diversity of thinking in their management ranks and gender diversity is a big part of that,” said Lynne.
“Having a formal diversity policy appears part of the issue, yet even those that do have a formal policy fail to adhere to it a large part of the time.”
“Our research shows a decline in the number of companies offering flexible work practices too (62 per cent in 2018 vs 67 per cent in 2017) and at a time when more women, but also men say such options are a priority for them. Flexible work arrangements are an important way to retain talent who may also have family responsibilities no matter what their gender,” said Lynne.
The 2018 Salary Guide also reveals that Singapore is also going backwards when it comes to cultural diversity in the workplace with the proportion of talent from other parts of the world declining compared to last year.
“We understand the preference for local talent in Singapore, particularly given how well educated the workforce is here. However, our 2018 Asia Salary Guide shows that many of the skills needed by companies in some industries are emerging faster than local talent can develop to meet demand and this will be a continuing trend.”
“To be able to take up emerging technologies that will help companies grow, employers in Singapore will need to be able to tap into the right talent no matter the gender of the candidate or where in the world they are from,” said Lynne.
More on gender diversity
Singapore is in the middle of the pack compared to the five countries surveyed for the 2018 Asia Salary Guide regarding women in management positions. Malaysia is the stand out country with women filling 38 per cent of management roles followed by Mainland China with 37 per cent. In Hong Kong, women hold just 29 per cent of management roles and in Japan, women fill only 22 per cent of management roles.
Of the employers surveyed in Singapore, only 53 per cent have a formal diversity policy – a drop from 58 per cent last year. Malaysia ranked first with 54 per cent of companies reporting they have a formal diversity policy in place compared to 52 per cent in Japan, 51 per cent in Mainland China and 47 per cent in Hong Kong.
And of the companies in Singapore that do have a formal diversity policy in place, nine per cent admit they are struggling to adhere to it while a disappointing 30 per cent are unsure how well their organisation is managing adherence. Another 32 per cent claim to adhere to their policy “fairly well” and 29 per cent ‘well’.
Flexible work practices
Of the employers surveyed in Singapore, 62 per cent offer flexible work practices – a drop on last year’s 67 per cent.
In our 2018 research, Japan leads the pack with 70 per cent of employers offering flexible work options. Mainland China is also ahead of Singapore with 66 per cent of employers supporting flexible work practices. At the back of the pack, only 57 per cent of the employers in Hong Kong offer flexible options along with Malaysia at 54 per cent.
The 2018 Asia Salary Guide shows that foreigners comprise 13 per cent of the workforce in Asia. An increase of one per cent from last year. In Singapore, it was found 19 per cent of the workforce in the country is foreign, a two per cent decrease from last year.
In skill short areas, 69 per cent of companies in Singapore would consider recruiting a qualified candidate from overseas but 31 per cent would not.
Despite the decline in cultural diversity, Singapore still leads the pack when compared to other key Asian markets. Only ten per cent of all employees in the organisations surveyed in Malaysia and Mainland China are foreign. In Japan, the figure is 13 per cent with Hong Kong at 14 per cent.
When it comes to being willing to become an expat worker, Singaporeans are middle of the pack when compared to candidates in other countries. When asked if they were willing to relocate to another country to work, 64 per cent of Singaporeans said ‘yes’.
Malaysia were the most willing with 71 per cent of respondents answering ‘yes’ while in Hong Kong that figure was 68 per cent, in Mainland China 61 per cent and Japan 60 per cent.