PETALING JAYA: The Korn Ferry 2020 Salary Forecast report estimates that salaries in Malaysia are expected to increase by 5% in 2020.
However, once adjusted for an inflation rate of 1.5%, real-wage growth is expected to drop marginally from 3.6% in 2019 to 3.5% in 2020.
“There has been a lot of discussion that the inflation rate is not reflective of the rising cost of living in Malaysia and the government is working on developing a new index that can provide better accuracy on the cost of living.
“The new index can be used alongside the inflation rate to shore up efforts in addressing the rising cost of living and the diminishing real wage increase,” Korn Ferry Asia Pacific leader for rewards and benefits practice Mary Chua said in a statement today.
Chua also said there is a growing rhetoric to address living wages against increased pressure to deliver shareholder’s returns in a challenging business climate.
“Wage growth needs to be in tandem with productivity increases, if not these costs will eventually be passed on to consumers and perpetuate the rising cost of living.
“We are having more conversations with companies on how they can manage their wage bill more sustainably, and to ensure more inclusion through longer term efforts like upskilling,” she said.
According to the statement, across South-East Asia, Indonesia is forecast to have the highest real-wage growth at 5.1%, after accounting for an inflation rate of 3%.
Although salaries in Singapore are forecast to grow by only 4%, the island-nation’s relatively low inflation rate of 0.4% translates into a 0.6% increase in real-wage growth as compared to last year, the highest in the region.