NST Business
KUALA LUMPUR: The average salary increase rate in Malaysia declined to 5 per cent in 2017, according to the 2017 Total Compensation Measurement (TCM) Survey study by Aon, a global professional services firm providing a broad range of risk, retirement, and health solutions.
The Healthcare, Financial, and Telecommunications sectors continue to offer up to 5.6 per cent higher salary increases than market average.
For the Financial sector, this is driven in part by significantly higher attrition rates of 16.3 per cent compared to the Malaysia average of 14.4 per cent--as reflected in Aon's dedicated Financial sector survey.
High attrition also affects other specialised sectors--such as Healthcare, where jobs in nursing report attrition rates in Klang Valley to be as high as 24 per cent--and drives salary budgets in the upward direction.
Despite these trends, overall headcount growth within companies has remained relatively flat across all industries, with none exceeding 3 per cent.
Following economically challenging years in 2015 and 2016, companies have adopted a more cautious approach to hiring in 2017--choosing instead to focus on productivity measures with existing employees, rather than headcount growth.
Prashant Chadha, Managing Director, Aon Hewitt Malaysia & Philippines, said: "As the Malaysian economy rebounds after two difficult years, Malaysian businesses are under pressure to match their talent's expectations--especially when it comes to salary.
While employers are willing to pay a premium for good and critical talent, they are also focusing on KPI-related performance metrics that enable them to be more cautious about keeping within reasonable salary costs that can withstand challenging times."
Starting salaries for fresh graduates have risen to 7 per cent higher than 2016, spurred on by sectors such as Healthcare where median starting salaries for fresh graduates were recorded at RM2,770 per month versus RM2,500 per month last year.
However, 'high-growth' industries such as Technology did not record any significant change in fresh graduate median salary over the past year.
Nevertheless, the Technology industry, offering an entry level salary of RM3,600 per month to fresh graduates, maintains a 38% salary premium over the general market in 2017.
Regulatory changes continue to impose a challenge on the Hospitality industry. Due to the Minimum Wages Order 2016, many hoteliers have had to rethink their compensation structures as up to 25 per cent of the workforce stand to be impacted by this new change in governance.
Salary increase projections for 2018 have also minimally increased to 5.1 per cent.