Could Malaysia see 20% salary increases in 2023?

Companies looking for niche skills and 'need to offer very competitive salary and benefits,' says report

Could Malaysia see 20% salary increases in 2023?

Employers across Malaysia are forecast to offer up to 20% salary adjustments in a bid to get ahead in the competition for talent.

Randstad Malaysia's 2023 Job Market and Salary Trends report said employees can expect to see three to 20% salary increases, with technology and manufacturing industries making "significant changes to the internal salary structures."

The increase is a response to the rising costs of living, according to the report, as companies aim to retain and attract new talent.

"Companies that have workforce expansion plans or are looking to hire candidates equipped with niche skills would need to offer a very competitive salary and benefits package to secure talent.”

A previous study has predicted a 5.1% salary increase in Malaysia this 2023, with inflation and the demand for talent attributed as reasons for the hike.

More talent wanted

Malaysia's tech sector is among the industries that are expected to lead the salary increases in the country, as "ambitious growth targets" drive the talent demand for IT development and enterprise workers.

Digital job vacancies have already tripled from 19,000 to 56,000 within a year, according to the Randstad report, with the development of 5G to further create 750,000 jobs by 2023.

"With more jobs than the supply of talent in the market, companies are fiercely competitive in their talent attraction strategies," it said.

The manufacturing sector is also increasing pay as it looks to open more jobs in the country amid supply chain congestion.

"As it happens, manufacturers are already actively expanding their workforce to fulfil backlogs and new orders," the report said. "As more manufacturers build more facilities in Malaysia to meet global demands, we will see more hiring at the senior level for plant managers and heads of production."

Demand for talent in the construction sector will also be on the rise as commercial developments emerged, said the report.

"Construction companies serving manufacturing, data centres and energy customers will be actively hiring new headcounts to meet deadlines.”

Upskilling urged

With a lack of skilled talent in Malaysia, employers are urged to invest in upskilling their staff so they can meet the changing demands in the workforce.

"It is the employer's responsibility to work with experts or improve the capabilities of their internal learning and development team to upskill their employees through relevant and useful training courses," said Randstad.

Employers can also collaborate with schools to offer "impactful internship programmes" where they can hire potential employees, the report added.

"Companies can create opportunities to let undergraduate students work on key projects to evaluate their skills and growth potential and convert them into fulltime employees if they meet the business expectations."

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