「"About the Human Resources Market in Malaysia ~From the Issues of wage increase~"」



 When a Japanese companies operate a company in overseas, they are always facing issues of human resources. Although the challenges that each country faces are vary, but I think that it is not too much to say that there is no business development without solving human resources issues. In managing the company, you have to understanding the characteristics of the human resources market in the country and region, and also ①Appropriate recruitment ② Designing a Fair, defined the human resources system (evaluation, career plan etc) ③ Attractive education for employees is necessary. In this article, we will focus on "Hiring" which is a particular issue. In total all 6 parts, I will explain about Malaysia’s human resource market from various angles.

 In the questionnaire (2017) conducted by The Japanese Chamber of Trade and Industry, Malaysia (JACTIM) / JETRO for Japanese companies in Malaysia, approximately 70% of companies answered that “Increasing wages is an issue” in the question of "Labor Policy / Employment Environment issues”. Even if it goes back to the past 2014, it is the most serious issue in the past four consecutive years. Malaysia has been maintaining a salary increase rate of around 5 to 6% over the past several years. Furthermore, as the salary increase rate forecast for 2018 is also 4.8% in the JACTIM survey, 5.53% in managerial positions and 5.42% in non-managerial positions in the Malaysian Management Federation, therefore a salary increase rate of around 5% is expected.
 For Japanese, it is enviable that a salary rate raise more than 5% every year, but how about looking at the neighboring ASEAN countries? In Vietnam, which is now rapidly growing, 9.6% in FY2006, 8.4% in FY2017, Furthermore, in Indonesia is 10.1% in FY2016 and 8.2% in FY2017, it is change at an incredibly high level. As mentioned above, the raise rate increase in developing countries is a problem faced in every country, and it must be recognized as a numerical value that continues to rise with economic development.

 But here is a big pitfall. The problem of 'Comprehensive wage increase' can’t be seen only with the numerical values mentioned until now. The statistical of the salary increase rate is only a numerical value that showing the base of the salary increase rate. If a company follows this figure and raise the salary of all the employees every year, if you look around in five years, more than half of the talent will be replaced. We must also think about "strategic increase in salary" to strengthen the organization and further expand the business. Under "strategic raise", company need to clearly clarify to which talent, based on what kind of evaluation standards, and how much raise is made within a certain budget? As a result, it will become a big point to raise employee motivation and to remain excellent talent.

 In the next column, I will explain about this "strategic increase in salary".

Pasona HR Malaysia Sdn Bhd details as below:
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