KUALA LUMPUR – Employees in Malaysia can look forward to a median 5% increase in their salaries next year, up from 4.8% this year, according to Mercer’s annual Total Remuneration Survey (TRS) 2022.
The asset management firm said the salary increment would be a return to pre-pandemic levels, as seen in 2019.
“This reflects growing optimism among employers about their business and overall market outlook,” it said in a statement.
Mercer said Malaysia’s median salary increment is also above the Asia-Pacific average of 4.4%.
“Across Asia, the overall median salary increases reflect a divergence in pay progression between emerging and developed economies, with estimates as high as 7.1% in Vietnam to 2.2% in Japan, the lowest in the region,” it added.
Mercer said the retail and consumer goods industries are expected to see the biggest upturn in salary increments of 5% in 2023, up from 4.5% and 4.6%, respectively, in 2022.
Shared services and outsourcing (SSO) and high-tech industries would maintain their 5% increase from this year, signalling the relative stability of both industries amidst inflationary pressures and supply chain issues, it said.
“Employees, except for those from the high-tech industry, can also expect higher bonus payouts this year, based on Mercer’s mid-2022 forecast.
“The retail industry is expecting the biggest jump to 12.6%, from 8.1% in 2021, followed closely by the consumer goods industry with an increase to 16%, from 13.7% the previous year.
“SSO is forecasting the highest payout of 20.3%, exceeding high tech’s 19.9%, which reflects the former’s growth potential in Malaysia leading to greater competition for talent,” Mercer said.
Cautious hiring approach
On industry salary trends, Mercer career business leader for Malaysia Koay Gim Soon said the higher projected salary increments and bonus payouts for the retail and consumer goods sectors are underpinned by strong consumer spending and the economy reopening.
“However, employers are also keeping a close eye on global headwinds, including inflation and supply chain disruptions which may dampen growth in the year ahead.
“Hence, the retail and consumer goods industries, despite recording the highest increases from 2021 to 2022, remain the most conservative in their forecast bonus payouts,” he said in the same statement.
The survey found that while the total unemployment rate has returned to pre-pandemic levels this year, companies are taking a more cautious approach to their 2023 hiring intentions.
A total of 30% of the organisations surveyed responded that they planned to increase their headcount in 2023, down from this year’s 39%.
“1% plan to decrease their headcount next year,” it said.
Mercer said the minimum wage increase implemented in May is expected to improve the financial well-being of lower income employees and bring about economic growth.
However, it added that the rise in employment cost could also add pressure on businesses that are more labour-intensive and less financially resourced.
“Small and medium enterprises especially may respond with cost-adjustment measures such as reduction in margins and increase productivity through automation,” it said.
The TRS polled 637 organisations – of which 98% are multinational corporations – across 17 industries in Malaysia between April and June this year. – Bernama, November 10, 2022
