According to the latest survey, Malaysian employers said they expect salaries to increase about 2.8% in 2022. Salary increment in 2022 are projected to be higher than in 2021 among the responded employers in Malaysia, as these companies are going through extensive planning this year and will be experimenting with hybrid work models, which better fit employees’ lifestyles and may result in long-term business savings.
The buyout economy, long-term savings from hybrid work models and a booming job market have all led to forecasts for higher 2022 salary increases, as 80 per cent of the respondents said salaries are expected to grow next year.
Additionally, recruitment has also exploded in recent months. Of the respondents, 52 per cent indicated their rate of recruitment currently far outpaces their 2020 efforts. It also found organizations that stalled hiring last year are now starting to actively and aggressively recruit. If demand for talent remains high and supply growth is sluggish, employers would need to expect organizations to feel the pressure to increase compensation to attract the employees they need.
Malaysian companies salary increases in 2022 will higher than 2021 and will be surpassed forecasts. Most of the company respondents believe they are able to give higher than forecasted salary increases next year, largely due to lower operating costs and an economy that has been better insulated than expected. And our survey found many of the respondents are awarding high salary increases to acknowledge and reward their employees’ resilience throughout the coronavirus pandemic.
Indeed, 62 per cent of companies surveyed in Malaysia are reporting better than expected performance in 2021. As a result, the survey noted the higher salaries were partially attributable to fewer of the respondents freezing pay increases compared to in 2020. Last year, an unprecedented 30% of companies cancelled salary reviews, whereas in 2021 the figure returned to historic levels at 10%.