Aon predicts that wages in Malaysia will plateau by 2024. This multinational professional services organization has announced the worldwide and regional results of its 2023 Salary Increase and Turnover Study.
The study, based on data gathered in the third quarter of 2023 from 950 organizations across six South-East Asian countries, predicted that salaries in Malaysia and Singapore would remain flat at 5% and 4%, respectively. On the other hand, by 2024, the typical salary is expected to rise 6.5% in Indonesia, 5.5% in the Philippines, 4.9% in Thailand, and 8% in Vietnam.
Despite fears about Malaysia’s economic slowdown, compensation rises are projected to remain consistent as firms grapple with talent reduction. Attrition rates in Malaysia increased to 16.2% in 2023 from 14.9% in 2022, owing to shifting talent strategies and a continuous talent supply and demand gap.
The report also indicated that businesses in South-East Asia are cautiously hopeful about hiring, with 40% reporting no changes to their recruitment levels and 40% experiencing hiring constraints. Despite a surge in layoffs early in 2023, workforce numbers across industries remained greater than pre-pandemic levels, with layoffs primarily occurring in non-core/expansion sections of the organization, while other business lines were still hiring.
Rachel Jayaprakash, Market Leader of Talent Solutions for Aon in Malaysia, said that Malaysia’s economy used to be separate from global trends, but now the country is seeing slower growth due to higher living costs and a falling ringgit. She also said that 2024 should be similar, with moderate growth and normal levels of consumption.
Organizations, she said, must make informed decisions based on insights and robust market data to establish a holistic employee value proposition that ensures a competitive wage package while also building a resilient workforce.
