Lower increments, bonuses trend to continue into next year: MEF

KUALA LUMPUR – The Malaysian Employers Federation (MEF) said executives and non-executives will likely see the trend of reduced increments and bonuses continuing next year, based on the latest MEF Salary Surveys for Executives and Non-Executives. 

MEF president Datuk Dr Syed Hussain Syed Husman said only 58.4% of surveyed companies granted a salary increase to their executive staff this year, compared with 88.3% in 2019, while only 61.7% of companies granted a salary increase for non-executives (87.6% in 2019).

The average salary increase forecast for executives and non-executives was also lower in 2020 compared with 2019, at 4.82% (5.15% in 2019) and 4.79% (4.96% in 2019), respectively.

“The results were expected due to the adverse impact of the Covid-19 pandemic.

“This trend is expected to persist into next year as the forecast average salary increase for executives and non-executives in 2021 was lower at 4.59% and 4.57%, respectively,” he said in a statement today.

The 26th edition of the MEF salary survey covered 179 benchmarked positions of 20,733 executives, while the non-executives survey covered 64,625 non-executives with 138 benchmarked positions.

Hussain said the forecast bonus for executives and non-executives in 2021 also dropped to 1.75 and 1.57 months, respectively, compared with 1.94 and 1.65 months of bonus granted in 2020.

He said during the movement control order (MCO), respondent companies operated at 60 to 70% of workforce capacity, which rose to 80% for all levels of executives during the conditional MCO (CMCO).

The workforce capacity utilisation for non-executives – ranging from general labourer/unskilled employees to supervisors – was at approximately 56% during the MCO, which then rose to 77% during the CMCO.

“More than half of the respondent companies froze hiring of executives and non-executives in 2020 to cope with the impact of the pandemic, while approximately 38% of companies maintained their recruitment practices,” Hussain said.

The survey revealed that about 36% of respondent companies have yet to decide on their 2021 recruitment policy as the outlook is still uncertain.

Additionally, about 31.8% of companies said they will maintain their new hiring policy, while approximately 20% said they will adopt a hiring freeze policy next year. – Bernama, December 14, 2020