Malaysia sees higher real wage growth

KUALA LUMPUR: A forecast issued by the Hay Group division of executive search and recruiting firm Korn Ferry reveals that Malaysia will see a 3.2% real wage growth in 2018, an increase from the 1.3% average salary increase recorded in 2017.
Financial services, construction and property development & management industries are expected to record the highest salary increases, while real wages for the health and life sciences, oil & gas and industrial products sectors are expected to register the least growth.
Average bonus levels are also expected to decrease slightly in 2018 to 2.5 months from 2.6 months recorded in 2017.
Adjusted for inflation, employees around the world are expected to see real wage increases of only an average of 1.5%, down from 2017’s prediction of 2.3% and 2016’s prediction of 2.5%.
In Asia however, salaries are forecast to increase by 5.4% – down from 6.1% last year. Inflation-adjusted real wage increases are expected to be 2.8% – the highest globally, but down from 4.3% last year. China remained consistent with real wage increases predicted at 4.2% for 2018, compared to 4% last year.
Most countries in this region saw a drop in year-over-year real wage prediction increases – including Vietnam’s forecast of 4.6%, down from 7.2%, Singapore at 2.3%, down from 4.7%, and Japan at 1.6%, down from 2.1%.
“With inflation rising in most parts of the world, we’re seeing a cut in real wage increases across the globe,” said Korn Ferry global head of rewards and benefits solutions Bob Wesselkamper.
“The percentage of salary increase or decrease will vary by role, industry, country and region, but one thing is clear, on average, employees are not seeing the same real pay growth they did even one year ago.”
Wesselkamper said slower economic growth in mature economies keeps a check on pay raises.
“In emerging economies, upskilling workers is crucial for companies to maintain a competitive advantage – and those skilled employees can expect to see wages rise as talent shortages in certain regions drive salaries upward.”
Korn Ferry pay experts recommend taking a holistic approach when determining pay.
“While inflation indices are a solid benchmark for reviewing market trends in pay, we recommend that companies take a broader perspective by defining and agreeing upon their own measures of cost drivers, business strategy and local trading conditions,” said Benjamin Frost, Korn Ferry’s global general manager – pay.
Frost said compensation programs need to be regularly reviewed to make sure they align with changing business and market conditions.