Salaries in Malaysian companies likely to see 5.0% rise in 2024 – WTW

KUALA LUMPUR: Companies in Malaysia continue to project an overall salary rise of 5.0 per cent in 2024 for executives, management and professional employees, and support staff, according to a survey.

The survey on compensations, done by global advisory, broking and solutions company WTW, noted that although the projected salary increase this year was slightly lower than the 5.6 per cent in 2023, the average salary increase continues to rise steadily in the last few years.

More than 600 companies participated in the Malaysia Total Compensation Survey conducted in October 2023.

Similar trends are observed across various industries in the country this year, WTW said in a statement. It added that Inflationary pressures and concerns over a tight labour market continue to be influencing factors.

“Although inflation is slowing down from the heights of recent years, Malaysia’s labour market is shifting,” said WTW head of work and rewards for Southeast Asia and Malaysia Tan Juan Jim.

Voluntary turnover and attrition reached a high of 18.5 per cent in 2023 versus 16.5 per cent in 2022 and the trend looks set to continue in 2024, he said.

Tan added that employers in Malaysia will continue to face significant talent challenges including the attraction and retention of key talents.

They will need to balance the entire rewards package, both monetary and non-monetary, to remain competitive and aligned with employees’ needs and wants, he said.

WTW survey discovered that millennials and Gen Z will form more than 70 per cent of the workforce by 2025. Industries such as banking, insurance, tech, media and gaming, as well as shared services and outsourcing hired the most millennials and Gen Z last year.

It noted that Gen Z workforce in Malaysia grew 50 per cent year-on-year as a percentage of total workforce since 2020.

It expects millennials and Gen Z to form more than 70 per cent of the workforce by 2025.

Tan said employees have options in the gig and passion economy, which is built around creators with a purpose and which provides alternative ways of making money.

“Job security is no longer the primary focus, but understanding the emerging group of Gen Z employees becomes paramount. Organisations that provide greater work flexibility, including a choice of remote, onsite or hybrid working, will attract and retain more talent.

“This trend of working offers Gen Z more options to have multiple side hustles while maintaining their traditional economy jobs,” he added. – BK