PETALING JAYA: A 5% pay rise is unlikely to significantly alleviate the financial burden of employees, particularly those in the lower-paying sectors. Instead, more comprehensive measures like targeted support for low- and middle-income earners would better address their needs, said unions.
While welcoming survey findings that companies across diverse sectors are willing to increase salaries by 5% next year due to ongoing investments and growth opportunities, the unions said this does not tally with the current economic scenario.
Two independent surveys, the first by Mercer, a global human resources consulting firm, and another by the Malaysian Employers Federation (MEF) involving nearly 1,000 companies, predicted 5%-8% increments.
However, Malaysian Trades Union Congress president Mohd Effendy Abdul Ghani said the projected salary adjustments, while signalling progress, fell short of addressing the challenges of financial stability and equitable growth.
“Many workers may hope for more enhanced benefits, improved job security and targeted support for low- and middle- income earners.
“The rising cost of living continues to erode purchasing power, with inflation affecting everyday expenses such as food, transportation and housing. This often outpaces wage adjustments,” he said in response to the surveys.
On companies intending to maintain their current workforce rather than hiring, Mohd Effendy cautioned that this could lead to increased workloads for existing employees without proportional increases in compensation, further fuelling dissatisfaction.
On non-monetary benefits such as flexi hours and working from home, he said it can help provide employees with a sense of stability, personal growth and balance.
“Many workers now prioritise work-life balance and value the ability to manage personal as well as professional responsibilities more effectively.
“But job security remains a major concern, particularly in industries experiencing rapid changes or economic uncertainties.
Workers are looking for stability in employment, fair treatment and opportunities for career advancement,” he said. Malaysian Council of International Trade Union Network president Datuk Mohamed Shafie BP Mammal felt that a 10% raise, rather than just 5%, was more reasonable especially for the lower income group.
He said for someone earningRM10,000, a 5% increment would have more value than for someone earning below RM5,000 “With the continuous increase in prices of goods and others, 5% is still low, so I cannot say it is all good.”
Mohamed Shafie said the implementation of non-monetary benefits such as flexi hours and work-from-home policies were also vague.
These benefits vary from company to company, with different compliance levels. “For example, those working from home question the benefits they are entitled to if they fall or injure themselves, so many things are unclear.
“Ideally with the implementation of new rules, a task force or a committee could be formed to streamline the framework. Now it is just ad hoc,” he added. Mercer, in its annual Total Remuneration Survey, said salaries in Malaysia are projected to increase by 5% across all industries in 2025, with almost a quarter of companies planning to raise headcount next year.
Industries like energy and shared services are leading in base salary offerings while certain job roles will also see a “notable shift” in demand and pay.
The survey, conducted between April and June, involved more than 680 companies in Malaysia, in industries including technology, consumer goods, manufacturing, retail, chemical, life sciences, retail and wholesale, energy and shared services.
The data covers multinational corporations, and the actual salary increase or premiums are influenced by the companies, team and individual performance.
Meanwhile, the MEF survey involved 12,882 executives and 25,871 non-executives from 236 companies from the manufacturing and non-manufacturing sectors.
They have forecast a 5.5% salary increase for executives and 5.41% for non-executives next year.
It also indicated that employers’ performance was the primary criterion for granting a salary increase in more than 90% of surveyed companies.
