Survey: Salaries expected to rise in 2021 despite Covid-19
Salaries are still expected to see a projected increment of around 4.5 percent in 2021, despite the economic downturn amid the Covid-19 pandemic, according to human resources consulting firm Mercer Malaysia’s Total Remuneration Survey (TRS) 2020.
Mercer Malaysia consulting leader Koay Gim Soon said the data was provided through annual subscriptions of their clients, which they then analysed and published.
Although salary increments are still expected for 2021, it is still at a reduced rate than usual, Koay said.
“Traditionally for the past three to five years, the increment value has been quite stable, hovering around five percent.
“The projection for businesses in 2020 and 2021 was also quite stable, initial projection by the TRS also estimated it to be around five percent between April and June this year.
“But then the pandemic hit us at the end of the first quarter… so the actual incremental value has actually lowered to 4.7 percent (for the period between April and June this year).
“In the most recent survey we have conducted, it was actually projected that next year, the salary incremental value on average would hover at 4.5 percent. This is the first time in five years that it is dipping below five percent,” Koay explained at a media briefing on the TRS 2020.
The survey was conducted between April and June this year, with additional surveys conducted in July and August.
Businesses taking a 'wait-and-see' approach
Mercer Malaysia’s acting CEO Godelieve van Dooren said businesses may be cautiously optimistic as the economy is expected to rebound in the range of 5.5 percent to eight percent in 2021.
Businesses are taking a “wait-and-see” approach on their compensation strategy, she said, depending on the court of the pandemic.
“This is like welcome news for employees as slowing inflation will give real-wage increases a boost.
“On the other hand, due to this uncertainty, companies may decide to delay the increase in salaries or lower the budget even further, depending on the industry segment of the company.
“After all, affordability remains a key criterion for deciding salary budgets,” van Dooren said.
While salary increments have remained fairly stable for the high-tech, consumer goods, life sciences and chemical industries, Koay noted that the biggest dip in salary increases was reported in the retail, manufacturing and logistics industry.
The high-tech industry, for example, has a stable salary increment because there is a growth in demand for technology, due in part to the massive shift to remote working and related digital transformation of businesses, he said.
On the other hand, it is not surprising that lifestyle retail recorded a drop as consumer consumption patterns have changed, he said, due to lower spending capacities and reduced leisure activities as a result of the Covid-19 pandemic.
“However, it is important to note that the impact, even within industries, may be uneven. In consumer goods, for example, consumer durables, as well as beverages like alcohol have come under immense pressure, which may impact salary increments in harder-hit sectors,” Koay added.
