Outlook for salary hikes, bonuses in 2017 unpromising, says MEF survey


KUALA LUMPUR: The outlook for salary increases and bonuses in 2017 looks unpromising, as Malaysian employees received lower salary increases and bonuses throughout 2016, according to 2016 MEF Salary surveys for executives and non-executives.

The Malaysian Employers Federation (MEF) said on Thursday the average salary increase for the non-executives in 2016 was at 5.51%, marginally higher than 5.44% last year. The executives had more reason to smile as their salary increase was slightly higher at 5.55% compared to 5.97% in 2015.

MEF president Tan Sri Azman Shah Haron said: “The overall average forecast salary increase for executives in 2017 is 5.30%, while it is forecast at 5.43% in 2017 for non-executives.

“The survey showed only 93.6% of the surveyed employers raised the pay of their executives, in contrast to 96.5% of them in 2015. As for the non-executives, only 95.4% of the respondents granted salary increases compared to 96.5% last year."

He also said only 63% and 61.3% of respondents granted bonus to all executives and non-executives, respectively.

The survey also highlighted the crucial need for graduates to improve on English proficiency in order to become more employable. Also 73.2% of the surveyed employers indicated that graduates lacked skills in problem solving as well as communication skills.

“A total of 90.3% of the respondent companies were of the view that it was important to improve the proficiency of English to increase the employability of graduates,” said Azman Shah.

The survey findings also revealed that 83.5% of the respondent companies indicated that graduates have high salary expectations, adding that fresh graduates with degree qualification expected an average of RM2,725 of monthly basic salary while fresh graduates with Masters degree expected basic monthly salary at RM3,447.

Notably, the expectations are higher compared with the average salary offered by employers at RM2,566 for degree qualification and RM3,197 for Masters degree qualification.

A separate survey by MEF revealed that about 83% of the respondent companies indicated that they were affected by the economic downturn in 2016. 

The MEF Survey on "Managing employees during economic downturn" showed that 12.7% of the respondents implemented retrenchment during the current economic slowdown, 8.2% offered voluntary separation schemes (VSS), 5.5% introduced mutual separation schemes (MSS), while 3.6% implemented temporary lay-off. None had implemented pay-cuts.

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