Salaries in Malaysia expected to remain flat for 2024
Wages in Malaysia are expected to plateau in Malaysia in 2024, according to Aon. This global professional services firm has released the global and regional findings from its 2023 Salary Increase and Turnover Study.
The study, based on data gathered in the third quarter of 2023 from 950 organisations across six countries in South-East Asia, saw predictions of salaries in Malaysia and Singapore expected to stay flat at 5% and 4% respectively. In contrast, the median salary is expected to increase 6.5% for Indonesia, 5.5% for the Philippines, 4.9% for Thailand and 8% for Vietnam in 2024.
Despite economic slowdown concerns in Malaysia, the salary increases are expected to hold steady as employers struggle with talent reduction. The attrition rates across Malaysia rose to 16.2 % in 2023 from 14.9 % in 2022 because of changing talent strategies and the ongoing gap between supply and demand of talent.
The report further revealed that businesses in South-East Asia are cautiously optimistic about hiring, with 40% of the organisations reporting no changes to their recruitment numbers, and 40% of organisations having hiring restrictions. Despite an increase in layoffs earlier in 2023, headcount numbers across industries were still higher than pre-pandemic levels, with layoffs mainly occurring in the non-core/expansion areas of the business, while they continue to hire for other business lines.
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Rachel Jayaprakash, Market Leader of Talent Solutions for Aon in Malaysia commented that while economic trends in Malaysia were insulated from global trends, Malaysia is now beginning to experience slower growth escalated by the rising cost of living and a depreciating ringgit, with 2024 expected to be similar with moderate growth and consumption levels to normalise.
Organisations, she said, must make informed decisions using insights and robust market data to create a holistic employee value proposition to ensure a competitive pay package but also build a resilient workforce.