According to new survey data from the 2022 BrioHR SME Employer Sentiment Survey, Malaysian SMEs are paying more than the minimum wage for entry-level employees and maintaining hybrid working arrangements post-pandemic.
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Key Findings:
- A Robust Hybrid Model: Nearly half of Malaysian SMEs are currently adopting a hybrid working arrangements. 44 per cent have returned to work full-time. Nine per cent are completely working from home.
- More than Minimum Wage: 41 per cent pay significantly more than the minimum wage, 46 per cent pay slightly more, and 13 per cent pay the minimum wage for entry-level employees.
- No Visible Impact on Minimum Wage Increase: 61 per cent said the recent RM1,500 minimum wage had no effect on their business operations.
- A Healthy Work Culture: 74 per cent believe that creating a healthy work culture is the best way to retain talent and foster a better office environment.
The findings are based on the BrioHR SME Employer Sentiment Survey, which polled over 1,000 industry leaders from various SME sectors in Malaysia from June to July 2022.
The New Normal – A Robust Hybrid Working Environment
“The global labour market and job landscape have been significantly impacted by the COVID-19 crisis. As a result, it’s not surprising that nearly half of Malaysian SMEs now prefer a hybrid work model over having their entire team in the office every day. Many people were surprised by the abrupt shift to remote working, but today we see widespread support for hybrid working as the new normal,” said Benjamin Croc, co-founder and CEO of Southeast Asia’s fastest-growing end-to-end HR platform, BrioHR.
He also stated that beginning 1 January 2023, the new Employment Act will reduce the weekly maximum number of hours worked from 48 to 45. Aside from that, the Amendment Act now allows employees to request flexible work arrangements from their employers.
He added that while employers used to be able to frame their cultural values and hang them on the walls for employees to see, this no longer works today because employees are spending less time in the office than before the pandemic. As a result, developing a healthy work culture is critical for retaining and attracting talent while building a dynamic and synergistic team.
Raising of Minimum Wages Had No Visible Impact
Croc also stated that the new RM1,500 monthly minimum wage, which went into effect on May 1st, 2022, had no impact on Malaysian SMEs, as more than 60 per cent of those polled said the change had no effect on their business. Over 80 per cent are paying more than the minimum wage for entry-level employees already.
The most recent minimum-wage increase occurred in early 2020, which was two years ago. The current monthly minimum wage for non-urban areas and rural towns is RM1,100. It was interesting to note that the SME sector is already paying above the required minimum wage for entry-level employees. These SMEs recognise that compensation must not only reflect and attract these skills but also retain them among their workforces.
According to Trading Economics’ global macro models and analyst forecasts, wages in Malaysia are expected to reach RM3,840.00 per month by the end of 2022. Malaysia’s average monthly wage in 2020 was expected to be around RM2,900. Malaysian wages will be around RM3,922.00 per month in 2023, according to their econometric models.
“In Malaysia, the average monthly salary varies greatly depending on education level, employment sector, and especially between urban and rural areas. In today’s rapidly changing economy, business compensation must be competitive in order to retain key talent and attract new talent,” said Croc.
The Outlook
Croc went on to say that businesses are fundamentally changing as a result of new business models, technologies, and shifting workforce expectations. It is rapidly changing how we live and work, necessitating rapid business adaptation.
“At BrioHR, our top priority is to help businesses develop and implement a talent strategy that propels rather than stifles corporate growth. This presents an unprecedented opportunity for human resources to play a new and critical role in shaping how businesses compete, access talent, and show up in the communities in which they operate. SMEs can compete – and succeed – by transforming entire business models in product and service development, sales, production, leadership teams, and back office operations,” Croc concluded.
Source: BrioHR
