Digital industry’s salary growth to remain lacklustre, Pikom report shows

PETALING JAYA: The National Tech Association of Malaysia (Pikom) expects salaries of local digital professionals ranging from entry level to senior management level to continue on a downward trend in 2022, as findings showed a clear easing in the average salary of local digital professionals since 2019, it said in its report, Economic and Digital Job Market Outlook in Malaysia

Pikom has forecast a salary growth of only 0.1% for 2021 and 2% for 2022, from an average salary growth of 2.2% in 2020, due to the direct impact of the Covid-19 pandemic, including movement control orders (MCOs), economic uncertainties, and job losses.

CEO Ong Kian Yew said the salaries of digital professional have not changed much and have not not grown since 2019.

“To increase the salary of local digital professionals, the country needs to shift from a mover to a creator of technology. With innovation, we can expect higher growth in salaries in this industry,” Ong said in a virtual press conference after the launch of the report today.

The four key areas of the report are: an in-depth analysis of the economy, a critical review of the digital economy, domestic salary trends for 2021 and 2022, and a regional salary outlook.

Pikom has forecast lower gross domestic product growth of between 2% and 2.5% for 2021, and 5% growth for 2022.

Based on data from JobStreet, Pikom concluded that the downward trend in salaries for digital professionals started in 2019.

Despite this downward trajectory, the number of job advertisements for digital professionals in JobStreet remained high, reaching 135,451 in 2020 and 97,909 in June, 2021, according to JobStreet.

“Another interesting finding was that the number of senior manager positions has gone down compared to previous years, while demand has been high for low to mid-level jobs. Mainly due to the cost of hiring senior professionals is beyond the reach of many businesses struggling from the effects of the pandemic. Another possibility is that senior talents may tend to stay longer in the current employment due to the uncertainties in the job market.”

The report highlighted regional salaries from 11 selected economies and eight specific IT or digital job designations for this research covering common and traditional IT jobs such as software, hardware, network, project management, and consultancy.

Malaysia ranked seventh while the US topped the list followed by Singapore, Australia, the United Arab Emirates, Hong Kong, and Thailand. Countries behind Malaysia are Indonesia, Vietnam, India, and the Philippines. It is interesting to note that Thailand has surpassed Malaysia in average salary for digital jobs. This is a wake-up call for Malaysia as one of the prevailing factors in brain drain is financial compensation, the report said.

Pikom research and publication committee chairman Woon Tai Hai said the segments that have grown by leaps and bounds are e-commerce, online connectivity infrastructure, digital adoptions, digital payment platforms, and the digitalisation of some service oriented sectors.

“The term ‘transformation’ for some is perhaps obsolete and instead ‘acceleration’ is more appropriate. While the digital economic contribution to the national economy may have reached the 20% target, set many years ago, we are of the opinion that this digital journey may be further accelerated and will potentially ‘reshape’ the landscape of the digital industry. Also, MyDigital Blueprint and 5G deployment initiatives will be another set of impetus in driving the industry further,” Woon said.