This article first appeared in Personal Wealth, The Edge Malaysia Weekly, on Feb 29 - March 6, 2016.

Due to the bleak economic situation in the region, the majority of employers in Malaysia are planning salary increases of 3% to 6% this year, according to a study done by global recruitment firm Hays.

The 2016 Hays Asia Salary Guide revealed that nearly half (46%) the employers in the country are planning to increase salaries by that quantum in the next review period. Close to a quarter (29%) of the employers plan to raise salaries by 6% to 10%, while a minority (10%) is looking at increases of more than 10%.

About 11% of employers say they are looking at salary hikes of up to 3%, while 4% of employers do not plan to give any increments.

“We will see some tension this year between employers taking a cautious approach to salaries to help navigate the economic conditions in the region and candidates hungry for advancement,” says Hays managing director for Asia Christine Wright in a press release.

Nevertheless, most employees can look forward to receiving bonuses in the coming year. According to the study, 63% of employers intend to reward their employees with bonuses. 

In terms of the size of bonuses in Malaysia, 35% plan to offer 11% to 50% of the monthly salary, while 17% are looking at 100% of the monthly salary. “This is significantly more than in other countries surveyed,” says Wright during her slide presentation at the launch of the salary guide. 

The study also found that Malaysian firms are facing a major shortage of skilled workers, with 96% of employers saying skill shortages have the potential to hamper effective operations, and 34% saying they do not have the talent required to achieve current business objectives. This has prompted 65% of employers to consider sponsoring foreign skilled workers. 

“Employers are telling us they expect skill shortages to be a challenge this year. And while this will only add to salary pressures, we expect most employers to keep salaries in check. To fill the shortages, Malaysian employers will need to focus more attention on other strategies, such as training and development, and remaining open to recruiting from overseas,” says Wright.

Hays Malaysia regional director Tom Osborne said during his speech that skill shortages are present in industries such as accounting and finance, banking and financial services, IT, financial technology, sales and marketing, human resources, manufacturing and operations, and oil and gas. 

According to the study, Malaysia reclaims the top spot for the number of management roles held by women with 37%, compared with China (32%), Hong Kong (28%) and Singapore (27%).

The Hays salary guide highlights salaries and recruiting trends drawn from more than 3,000 employers across Malaysia, Hong Kong, Singapore, China and Japan, representing six million employees as well as the salary bands for more than 1,200 roles.

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