Employers rethink work, total rewards and redefine careers to win talent war
MALAYSIA, January 8, 2024 — A compensation survey by WTW (NASDAQ: WTW), a leading global advisory, broking and solutions company, reports that employees in Malaysia working in industries such as Insurance; Banking; Tech, Media & Gaming; Shared Services & Outsourcing; Asset Management; and Oil & Gas, received a more competitive annual base salary in 2023 compared to those in Education; Real Estate, Construction & Engineering; Biopharma & Life Sciences.
This is based on a market competitiveness index where the annual base salaries of jobs across industries were ranked against the base salary of jobs from the General Industry. When benchmarked against the General Industry, companies in Banking; Tech, Media & Gaming; and Shared Services & Outsourcing industries have exceeded expectations, offering annual base salaries that surpass the General Industry overall median. Notably, companies in the Asset Management and Oil & Gas industries paid the highest annual base salaries last year.
On the other hand, companies in the Education; Real Estate, Construction & Engineering; and Biopharma & Life Sciences lagged behind in terms of their annual base salaries’ competitiveness.
For 2024, companies in Malaysia continue to project an overall salary increase of 5% for executives, management and professional employees, and support staff. Although this is slightly lower than the 5.6% of salary increase in 2023, the average salary increase continues to show steady rise over the last few years. Similar trends are observed across various industries in the country this year. However, inflationary pressures and concerns over a tight labor market continue to influence factors beyond salary increase budgets.
| Industry in Malaysia | 2023 Actual Salary Increases | 2024 Projected Salary Increases |
|---|---|---|
| General Industry | 5.6 | 5.0 |
| Asset Management | 5.2 | 4.9 |
| Banking | 5.0 | 4.7 |
| Insurance | 5.3 | 5.1 |
| Real Estate, Construction & Engineering | 5.1 | 5.1 |
| Oil & Gas | 5.2 | 4.9 |
| Education | 5.0 | 5.0 |
| BioPharma and Life Sciences | 5.5 | 5.2 |
| High Tech | 4.9 | 4.8 |
| Shared Services & Outsourcing | 4.9 | 5.1 |
“Although inflation is slowing down from the heights of recent years, the labour market in Malaysia is shifting. Voluntary turnover and attrition continue to increase and reaches a high of 18.5% in 2023 compared to 16.5% in 2022. This trend looks set to continue in 2024. Employers in Malaysia will continue to face significant talent challenges including the attraction and retention of key talent. They will need to stay focused on balancing the entire package of rewards they offer, both monetary and non-monetary in order to remain competitive and align with employees’ needs and wants,” said Tan Juan Jim, Head of Work & Rewards, Southeast Asia and Malaysia, WTW.
“Employers need to stay focused on balancing the entire package of rewards they offer, both monetary and non-monetary to remain competitive and align with employees’ needs and wants”
Tan Juan Jim | Head of Work & Rewards, Southeast Asia & Malaysia, WTW
The WTW survey also reveals that industries such as Banking; Insurance; Tech, Media & Gaming; and Shared Services & Outsourcing hired the most number of millennials and Gen Z employees last year. Since 2020, the Gen Z workforce in Malaysia has grown rapidly at a 50% year-on-year increase in terms of percentage of the total workforce. By 2025, WTW expects that millennials and Gen Z will form more than 70% of the workforce in the country.
“The traditional employment model is losing its inevitability as employees now have the options in the gig and passion economy. The passion economy is one where it is built around creators with a purpose and provides alternative ways of making money, innovative paths towards professional fulfilment and unprecedented career opportunities to the future workforce.
“In the context of the passion economy, where job security is no longer the primary focus, understanding the emerging group of Gen Z employees becomes paramount. Organisations that move towards providing greater work flexibility, including offering 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,” said Jim.
At the same time, the Malaysia’s corporate workforce faces three possible challenges in growing its Gen Z’s population. These include:
“Winning the talent race will require employers to leverage on analytics to understand their current workforce and forecast future workforce within their organisation. Developing a compelling employee value proposition that encompasses a comprehensive view of total rewards, including both financial and personal well-being benefits, is important for employers in Malaysia to adapt to the unique attributes of the generational and future workforce,” added Jim.
A total of over 600 companies participated in the Malaysia Total Compensation Survey conducted in October 2023. These included organisations in: Financial Services; Tech, Media & Gaming; Shared Services; Real Estate, Construction & Engineering; BioPharma & Life Sciences; Energy & Natural Resources; Education and others. Respondents, who participated in the study, employ 323,837 employees in Malaysia.
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