Malaysian Companies: No salary increments, bonuses continue in 2021

In launching the annual salary surveys, MEF President Dato’ Dr Syed Hussain Syed Husman J.P. stated that only 58.4% of respondent companies granted salary increase to their executive staff. This figure is substantially lower in comparison to 88.3% in 2019. Only 61.7% of companies granted a salary increase for non-executives compared to 87.6% last year.  The latest ‘MEF Salary Surveys for Executives and Non-Executives’ indicates a drop in employee salary increments and bonuses in 2020.

Average salary increases for company executives and non-executives are also lower in comparison to 2019. In 2020, the average salary increase for executives is 4.82% but was higher at 5.15% in 2019. For non-executives, the average salary increase is 4.79% in 2020 but was higher at 4.96% in 2019.

“The results are of no surprise due to the adverse impact of Covid-19. This trend will persist into next year. Forecasts in average salary increases for executives and non-executives in 2021 may even be lower at 4.59% and 4.57% respectively,” said Dato’ Dr Syed Hussain.

He said the forecasts for executives and non-executives bonuses in 2021 show a drop to 1.75 and 1.57 months respectively. This forecast is lower in comparison to the actual bonus of 1.94 and 1.65 months of bonus granted in 2020.

The 26th edition of the MEF Salary Survey for Executives covered 179 benchmarked positions of 20,733 executives. The Non-Executives survey covered 64,625 non-executives with 138 benchmarked positions.

Dato’ Dr Syed Hussain added that during the MCO, respondent companies operated at 60% to 70% of the workforce capacity and increased to 80% for all levels of executives from top management to executive staff during CMCO. The workforce capacity utilisation for non-executives ranging from General Labourer/ Unskilled Employees to Supervisors was lower at approximately 56% during MCO as compared to 77% during CMCO.

Remote Work Arrangement

On remote work arrangements, Dato’ Dr Syed Hussain stated that respondent companies adopted remote work arrangements during MCO and CMCO. 41.1% of the respondent companies experienced lower levels of productivity of their executives. Half of the respondent companies reported lower productivity level of their non-executives during MCO and CMCO than normal work arrangement.

“More than half of respondent companies adopted hiring freeze of executives and non-executives in 2020. Their reasons for doing so was to cope with the impact of the Covid-19 pandemic. Approximately 38% of the companies maintained their recruitment practices.

“About 36% of the respondent companies have yet to decide on their 2021 recruitment policy. Their indecision is based on uncertain economic outlook due to the Covid -19 pandemic. 31.8% of the companies will maintain their new hiring policy. Approximately 20% of the companies will adopt hiring freeze policy in 2021,” he said.

In addition to the salary surveys, Dato’ Dr Syed Hussain also announced two other new publications – the ‘MEF Fringe Benefits Survey 2020’ and the ‘MEF Analysis of Collective Agreements and Awards on Terms and Conditions of Employment 2019’.  The MEF Fringe Benefits Survey attracted 199 participants.

Companies only follow rules in MCO

Dato’ Dr Syed Hussain highlighted that the top reasons for employees being required to work from home during the MCO were because companies were required or encouraged by the authorities to do so (98.6%), followed by business survivability (58.8%). Other reasons were taking care of young kids at home. Their work allowed them to do so remotely. A new strategy to sustain the business as WFH becomes a new norm. And finally, the organization’s diversification.

Dato’ Dr Syed Hussain highlighted further that in 2019 there were 294 collective agreements concluded and 61 Industrial Court Awards on terms and conditions handed down by the Industrial Court.

Of the 281 collective agreements that granted across-the-board salary adjustment, 171 collective agreements provided for across-the-board salary adjustment at an average of 6.1% as compared to 6.2 % in 2018. The average amount of contractual bonus granted in 2019 was 1.6 months.

Visit the link here to see the results of the survey.

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