PETALING JAYA: While expressing support for the Progressive Wage Policy (PWP), the Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM) has suggested that more efforts should be made to promote awareness.
It believes that the PWP will motivate employees to acquire skills and improve productivity and revenues which will in turn compensate for the increase in labour costs.
“The government should step up efforts to collaborate with the chamber and business associations to promote awareness, especially for the small and medium enterprises, to have a better understanding about the importance of providing essential training and skills to employees.
“By linking wages to skills and productivity, PWP will help to improve the workers’ income and reduce the business unit cost of output,” said president Datuk Ng Yih Pyng.
According to a survey conducted during late 2023 and early 2024 to gauge how many of its members would participate in the PWP, about one-fifth (20.5%) had expressed interest, while nearly half (48.4%) were unsure and almost one-third (31.1%) had no interest, he added.
The main concerns cited by 62.5% of respondents then was that the PWP would increase operating costs, while 35.4% were uncertain about potential productivity gains from joining the programme.
“ACCCIM views the PWP as a transitional measure to help firms establish a better wage structure for targeted employees, rather than a permanent financial incentive,” Ng said.
Meanwhile, the latest official data by the government revealed that 479 employers had applied for PWP as of Feb 27.
Of these, 269 have successfully increased their employees’ salaries at the stipulated levels and met the minimum training requirements.
SME Association of Malaysia president Chin Chee Seong said there are perceptions among stakeholders that the PWP will drive up operational costs due to wage increases.
“The good part of this is that it will provide higher earnings for employees and the disadvantage is that once you grow salaries, you cannot revert back to the old salary,” he said.
Chin also said the PWP is a feasible policy for profitable SMEs and corporations.
“After all, companies need to provide salary increments. So, take this opportunity to increase salaries and you will get incentives from the government at the same time,” he added.
Small and Medium Enterprises Association of Malaysia president Datuk William Ng said many companies under his association that signed up for the PWP are those planning to offer higher salaries.
“What the PWP should accomplish is for job redesign that will scale workers productivity and to tie that to higher wages,” he said.
As an example, Ng said store assistants at retail sectors can be cross-trained to do visual merchandising and minor repairs of merchandise.
“This, in turn, may help them to learn new skills, reduce headcount and costs to companies,” he said.
Kuala Lumpur and Selangor Indian Chamber of Commerce and Industry president Nivas Ragavan said the group did not have comprehensive data on the number of members who have adopted the PWP.
He said it is important for the government to provide clear guidelines, support mechanisms and incentives to assist businesses in transitioning smoothly to the new wage structure.
“This support is vital to ensure that the PWP achieves its intended goals without adversely affecting business sustainability,” he added.
