Malaysia aims to improve employee compensation through wage policy
A progressive wage model would not affect the much-needed growth of skilled employees’ salaries, said V. Sivakumar, Malaysian Human Resources Minister.
He called this policy in line with the country’s structural reform agenda to achieve Malaysia’s target when it came to compensating employees, as outlined in the 12th Malaysia Plan, which sets the strategic direction for Malaysia’s development for the period of 2021 to 2025.
The progressive wage model, along with other factors such as a higher skilled employee to employment ratio, and a minimum wage policy would also improve how employees are compensated.
“A specific plan is in place to cater to all these factors, with a middle point achieved between the government and private sectors, while also managing to quell employers’ concerns that an increase in remuneration expenditures would result in higher operating costs for businesses,” Sivakumar said.
The progressive wage system policy had been approved at the cabinet level earlier this year, and expected to be implemented in April or May next year.
Malaysia’s labour market is gradually moving towards a capital-intensive approach, said Sivakumar, with guidance by the New Industrial Masterplan (NIMP) 2030, announced by Prime Minister Datuk Seri Anwar Ibrahim last month.
The NIMP, Sivakumar said, is set to drive employment up by 2.3 % on a cumulative average between 2022 and 2030, providing 3.3 million jobs, a 20 % increase in employment.
READ MORE: Why Malaysia is adopting a progressive wage policy
“The additional employment will primarily be in high-skilled jobs, pushing median pay to rise on a cumulative average of 9.6 % between 2021 and 2030, to reach RM 4,510 (USD $956.12) in 2030, or 128 % increase from 2021,” he added.
The government will continue to be proactive in strengthening the nation’s workforce, ensuring that they were well-prepared to face the challenges of a dynamic economic landscape, reported the New Straits Times.