Technology, financial and shared services offer better salary packages
THERE are bright spots in the Malaysian job market, where there is strong demand in some sectors amid the tough economic and business environment.
Unfazed by economic headwinds and the uptick in the unemployment rate, companies are stepping up their recruitment drive in niche areas in line with the strong demand for talent in specific sectors.
Malaysia’s unemployment rate in December 2016 stood at 3.5% compared with 3.4% in December 2015, which was similar in November last year. Some economists predict that due to the economic slowdown and external headwinds, the unemployment rate has room to creep up.
According to the recent Robert Walters Global Salary Survey, Malaysia should experience a cautious job market in 2017, as businesses are expected to maintain or even reduce head count across non-critical areas.
The broad sectors which may offer the highest salary packages are technology, financial services and shared services. This trend is expected to continue over the next few years.
Simon Lee, who has been working as a software developer for the last seven years, will soon be joining another IT firm in the country. The reason is pretty obvious – higher remuneration.
“The pay jump of about 25% is very enticing for anyone to leave and join a new company. A couple of my colleagues will be joining some IT companies as they have been offered higher salaries as well,” he says.
Like Lee, Saminathan has also applied for a job in a foreign bank as a credit risk analyst. “After five years as a credit risk analyst at a local bank, I am glad that I have been offered by a foreign bank a 20% pay hike. The job prospect has good demand, as various regulations now require strict adherence to credit and compliance to ensure smooth and minimal interruptions.”
The technology sector is set to see the highest demand in terms of jobs and salary hikes this year, while human resource, sales and marketing, manufacturing and oil and gas (O&G) may experience flat pay rates amid the tough business environment and volatile oil prices.
Global recruitment specialists Hays Plc and Robert Walters agree that the technology sector will shine and offer attractive salary packages for those who have the appropriate talent required for the job.
Since 2013, the technology sector has seen salary hikes and this trend is expected to continue over the next couple of years. Due to the increase in regulations in the country, risk professionals with strong technology background will be highly sought after.
Hays regional director for Malaysia Tom Osborne tells StarBizWeek that as a result of increasing regulations in Malaysia, there will be a high demand for risk professionals this year and also moving forward.
Candidates who are able to reduce financial institutions’ exposure to risk will stand out, as employers step up their efforts to ensure they adhere to regulatory requirements, he adds.
The recruitment specialist, for example, expects a credit risk analyst in the banking sector in Malaysia to earn between RM72,000 and RM108,000 a year and an even higher annual salary of RM324,000-plus for a director in the same line of business this year.
He says risk and compliance will be two hot areas where fierce competition will take place for the right candidates, adding that the increasing threat of cyber security has created huge demand for security experts who can safeguard the IT systems of organisations against malicious cyber-attacks.
“Experienced candidates will become the top beneficiaries of strengthened cyber security efforts. We have found that both foreign companies and domestic small businesses have set aside budgets to increase headcount to combat the threat of attacks to their IT infrastructure,” he notes.
Meanwhile, Robert Walters Malaysia managing director Sally Raj says software developers and cyber security experts can expect significant salary raises of up to 25% when moving jobs in 2017, as cyber security professionals will be highly sought after across a number of industries, especially in the banking sector.
Osborne says as banks tighten their governance structures, he expects a high demand for a number of positions this year like anti-money laundering, sales and regulatory compliance and market conduct functions.
Commenting on the technology sector, Raj says the technology sector, especially for niche positions, may see at least a 30% salary rise this year compared with 27% last year. For example, in senior positions, a chief technology officer can expect an annual salary of between RM360,000 and RM600,000 this year from RM350,000 and RM540,000 in 2016.
A program manager may bring in an annual salary of between RM240,000 and RM360,000 from RM216,000 and RM336,000 last year. A solution architect, however, could see an annual salary hike of up to RM180,000-RM324,000 from RM120,000-RM192,000.
Osborne concurs that the technology sector will likely see the highest jump in salary this year. “The key sectors in Malaysia that will see pay hikes include information technology. Areas in IT where growth will occur include IT infrastructure systems administration and management positions.
For instance, a network engineer in the systems administration side could rake in an annual salary of between RM96,000 and RM144,000 this year compared to between RM72,000 and RM120,000 last year.
“Organisations in Malaysia are reinventing themselves for the digital world that has seen many invest in upgrading their IT infrastructure. This has created demand for talent who are well versed in this area and as a consequence, wages have increased.
“Sectors where there were stagnant pay growth from 2016 include human resources, sales and marketing and manufacturing operations. This trend is expected to continue this year,” he notes.
Hays recently churned out its tenth edition of the 2017 Hays Asia Salary Guide. Released in February, the survey highlights salary and recruiting trends drawn from more than 3,000 employers across Japan, China, Hong Kong, Malaysia and Singapore representing six million employees, as well as the salary ranges for more than 1,200 roles.
Although there are no specific figures for Malaysia, a global O&G website, Oil Career, has projected a 6% cut in total compensation for the O&G sector in South-East Asia this year. For 2015 and 2016, total compensations for the O&G sector in the region were almost flat.
Raj expects the technology sector to continue garnering higher salary growth and employment over the next few years, as various businesses embrace technology to enhance their business and expansion growth.
“Technology is going to be at the forefront over the next few years, as businesses like financial services (banking and insurance), fast-moving consumer goods companies and retailers gear up to adopt technology. Furthermore, organisations are now utilising digital channels to grow their businesses.”
With the advent of financial technology (fintech), Raj foresees further growth in technology usage in the financial services sector, partly thanks to the recent regulatory “sandbox” framework for fintech. The sandbox refers to a safe space where businesses can test innovative products, services, business models and delivery mechanisms.
As digital, mobile and e-commerce-related companies expand their businesses, she says there will be an increase in the number of employers recruiting mobile engineers and software developers in 2017.
Raj says shared services will be another sector where recruitment would remain strong in 2017, with job movers expecting salary rises of at least 15%, as more companies set up regional and global hubs for their supply chain and procurement centres.
More multinational companies (MNCs) are planning to set up their global hubs in the country partly due to Malaysia being cost-effective as a result of a weaker currency. Besides being cost-effective compared with other countries, Malaysia also has the right infrastructure and talent that MNCs are looking for in their expansion plans, she says, adding that Robert Walters has received many enquiries from a number of MNCs who have expressed their intentions to start operations in Malaysia.
With the expansion of the shared services business, there will be an increase in demand for specialist talent such as migration or project management office experts to support new migrations and functions, Raj adds, noting that there will be more regional positions available, as many organisations establish their regional bases in Malaysia instead of Singapore or Hong Kong.
Some of the notable trends which Hays expects to take place in the Malaysian market this year and over the next couple of years include employers hiring more candidates with good command of Chinese and English for contact centres and customer service roles.
This is because employers are currently struggling to find suitable candidates who are fluent in both languages in the local market, Osborne adds.
Soft skills is another trend which some employers are placing importance on. “Depending on which industry they apply to work in, many employers will value soft skills over work experience. A candidate may have extensive experience and stellar qualifications, but they will offer little value if their soft skills are lacking.
“Employers will specifically look at what motivates the candidate and how they could potentially communicate with their team effectively and efficiently if they were to be successful in the recruitment process,” he says.
Job market outlook
The job market prospect is set to improve this year, as more employers are looking at hiring. Osborne says based on Hays’ latest survey, 46% of employers in Malaysia expect to increase headcount in 2017 compared with 43% last year. This is despite the prediction that fewer employers this year (63% in 2017 versus 68% in 2016) believe that business activity will increase this year, he adds.
In terms of salary hikes in 2017, it is projected that 37% of Malaysian employers plan to award an increase of more than 6% compared with last year, where only 39% of Malaysian employers planned to award more than 6%.
Hays revealed that 66% of employers in Malaysia intend to award bonuses to all employees and 22% to only some employees. Across all Asian countries, bonuses were most commonly related to company performance (88%) or individual performance (84%).
Only 10% of staff bonuses were guaranteed. A further 34% of bonuses were related to team performance.