PETALING JAYA: A survey conducted by a human resources consultancy firm has shown that while employees can still expect salary increases in 2021 despite the impact of the Covid-19 pandemic on businesses, it will likely hit a five-year low.
Findings from the Mercer Malaysia Total Remuneration Survey 2020 project a 4.5% increment for 2021, lower than the 4.7% this year. This year’s average increment already represented the first time the figure dropped below 5% since 2015.
Mercer Malaysia consulting leader Koay Gim Soon said companies included in the survey were offering “conservative projections” as they continue to grapple with the pandemic’s effect on their bottom line, with 20% reporting they had not offered salary increases this year.
“We are also seeing 84% of organisations implementing hiring freezes,” he told a webinar, adding that “most reported they would only resume hiring when they are back to a more stable business outlook”.
The survey also showed that end-of-year bonus payments were likely to be down in most sectors because of this year’s slow performance. “The majority of organisations will either not be paying out bonuses or revising their bonuses to a conservative figure.”
Mercer Malaysia’s acting CEO, Godelieve van Dooren, said this reflected the wider trend across the Asian region.
“We have seen that a number of organisations had to resort to some form of labour cost containment measures,” she said.
She said companies across the region were implementing these efforts to avoid more severe outcomes for their employees, and provide a blueprint for local companies to follow.
“Companies have been freezing hiring to protect their employee base and that has been working really well, so harsh measures like reductions in force or furloughs could be prevented in Malaysia as well.”
Koay said while these numbers were representative of the overall landscape, companies that have benefitted from the pandemic such as glove makers might have been insulated from these negative outcomes. – FMT