KUALA LUMPUR (Feb 23): Worried by a sluggish economy this year, most Malaysian employers are planning to raise staff salaries by only 3% to 6%, said global recruitment firm Hays.

The 2016 Hays Asia Salary Guide revealed that 46% of employers plan salary increases of between 3% and 6% in the next review period, while 29% plan to give raises of between 6% to 10%.

The guide said 11% of employers plan increases of only up to 3%, while 4% do not plan on giving increments, said Christine Wright, managing director of Hays in Asia.

"We will see some tension this year between employers taking a cautious approach to salaries to help navigate economic conditions in the region more generally and candidates hungry for advancement," it said.

The guide highlights salary and recruiting trends from more than 3,000 employers across Malaysia, Hong Kong, Singapore, China and Japan.

The firms involved represent six million employees and salary ranges for more than 1,200 roles.

The guide said that the trend in Malaysia is also being repeated in Singapore and Hong Kong where most employers plan to give raises between 3% to 6%.

In contrast, 60% of employers in China plan pay hikes of between 6% to 10%, while in Japan, 63% of employers are planning to give raises of up to 3%.

“To make the best of these conditions, candidates should do their research thoroughly before pitching for salary and give more weight to other benefits such as career development opportunities that will pay off when the salary climate is more favourable to candidates, said Wright.

“Employers are telling us they expect skills shortages to be a challenge this year and while this will only add to salary pressures we expect most employers to still keep salaries in check.

“To fill shortages, Malaysian employers will need to focus more attention on other strategies such as training and development and remaining open to recruiting from overseas,” she said.

In the coming year, 63% of employers in the guide intend to award staff bonuses, with a majority of them (44%) saying they plan to give bonuses of between 11% to 50% of staff salary.

Only 10% of firms are giving bonuses of 100% of staff salary. About 13% plan bonuses of between 51% to 99% of salaries, while 33% intend on awarding up to 10% of salary as a bonus, the guide said.

“When asked to nominate the one or more factors influencing bonuses, 95% of employers cited ‘company performance’, 92% ‘individual performance’ and 37% ‘team performance’.”