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Institut Maklumat dan Analisis Pasaran Buruh (ILMIA)

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Contents

Executive Summary iii

1 Introduction 11.1 Background 11.2 ObjectivesoftheNER2016Survey 11.3 ScopeandCoverage 11.4 SurveyMethodology 21.5 ConceptsandInterpretationofResults 21.6 ReportContent 3

2 Profile of Employers 52.1 SpatialandSectoralDistribution 52.2 OwnershipandEquity 72.3 EstablishmentSize 9

3 Profile of Employees 113.1 EmploymentSize 113.2 SpatialandSectoralDistribution 113.3 OccupationalStructure 123.4 Gender 14

4 Salary and Compensations 174.1 Introduction 174.2 MinimumandMaximumBasicSalaryof MalaysianEmployees 17

4.2.1 JobCategoryMASCO2Digit 184.2.2 Sector 23

4.3 CurrentBasicSalaryTrendsandPatterns 244.3.1 TrendsandPatterns 244.3.2 Sector 264.3.3 Nationality 274.3.4 Gender 284.3.5 JobCategoryMASCO2Digit 28

National Employment Returns Report 2016

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4.4 OtherCashCompensation 304.4.1 CashAllowance 304.4.2 Bonus 324.4.3 Incentives 344.4.4 OvertimePayments 35

5 Components of Compensation and Productivity-linked Wage System 37

5.1 Introduction 375.2 ComponentsofCompensation 37

5.2.1 Allowance 375.2.2 Benefits 375.2.3 Productivity-linkedWageSystem 38

6 Education and Skills 416.1 Introduction 416.2 EducationLevel 416.3 RequiredSkills 416.4 Training 42

7 Recruitment and Vacancies 477.1 Turnoverrate 477.2 Vacancies 48

7.2.1 VacancyRate 497.2.2 Hard-to-fillVacancies 49

8 Minimum Wage 538.1 Introduction 538.2 ImplementationofMinimumWagePolicy 538.3 ImpactsofMinimumWagePolicy 53

Appendix – Technical Notes 55

Survey Methodology 55


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The availability of sufficient detailed data to generate labour market informationis vital for a proper analysis of theeffective functioningof the labourmarket and toprovidetheevidencetosupportpolicieswhichenhancetheworkforceandworkplaceenvironment.Amongotheruses,statisticsfromthelabourmarketwillallowthelinkingof the education system and worker training programmes to industry demand forthediversecategoriesof skilledworkers indifferenteconomicsectors in thecountry.Timelyprovisionofinformationwillcontributetothepromotionofhighvaluedaddedinvestmentscreatinghighlyskilledoccupationsandincreasingproductivitytoattainthehighincomeaspirationsofthenationaleconomictransformationprogramme

The Institute of LabourMarket Information and Analysis (ILMIA),Ministry of HumanResources (KSM) has been conducting theNational Employment Returns (NER) since2002. The NERs collect key statistical information on the labour market and theworkforce from surveys of selected economic establishments covering the whole ofMalaysia,includingdatatoidentifyemergingtrendsinsalaryandwagesinthecountryto contribute tonational policy review,planning andhuman resourcesdevelopment.TheNER2016surveysustainsthegenerationoftheseriesoflabourmarketinformationwithprofilesonthecharacteristicsoftheworkforcebyoccupations,economicsectors,geographicallocationswithdetailsonqualificationsandeducationalattainment.Overall,theNERsurveyrepresentedsome206,000privateestablishmentsthroughoutMalaysiaandcoveredabout6millionemployees.

MENTERI SUMBER MANUSIA MALAYSIAMinister of Human Resources Malaysia

FOREWORD


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Iwouldliketoexpressmyappreciationfor thecooperationofalltheprivateenterprisesthatrespondedtotheNER2016surveyandto ILMIAandallagenciesunderKSMwhichhaveworkedtogethertomakeNER2016a success.ThesupportofthemanagementandstaffofHRDFdeservesspecialmention. IhopethefindingsfromtheNERwillcontinue to beamajorreferencefor labourmarketanalysisandtheformulationofpoliciesfor humanresourcesdevelopmentinlinewithKSM’svisionastheleaderinhumanresourcesmanagement.

Dato’SriRichardRiotAnakJaemMinister of Human Resources Malaysia


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EXECUTIVE SUMMARY

TheMinistryofHumanResources(MOHR)hascarriedoutaseriesofemployersurveystoprofileemployers,employees,andtheirwageandsalarylevelssince2002.The2016SurveyofNationalEmploymentReturns(NER),thelatestintheseries,isthefifthoftheNERsurveys.Previoussurveyswereconductedin2007,2009,2011and2013.

TheNERscollectinformationonthelabourmarketandtheworkforceinMalaysia.Italsoidentifiesemergingtrends insalaryandwagesinthecountrytoaid innationalpolicyreview, planning and human resources development. TheMOHR intends to use theinformationfromtheNERstobuildacompleteandcurrentlabourmarketdatabasethatcanbeusedbyallsegmentsofthesociety,particularlybythegovernment,industry,theprivatesector,peoplelookingforwork,researchers,andothers.

The main objectives of the NER 2016 survey are: (a) to collect information on theworkforcewiththeaimtoupdatethelabourmarketinformationdatabase;(b)toprofiletheworkforcestructure,i.e.localandforeign,professional,semi-professionalandothercategoryofemployees;(c)toanalysethecharacteristicsofemployees,especiallywages,education levels, TVET, and skills by industry, economic corridors/states; (d) providedataforanalysisofthe2016workforceaswellastrendsovertime;and(e)tocarryoutprojectionsofthelabourmarketforpolicypurposes.

TheNER2016SurveyusedtheEstablishmentandEnterprise(EE)frametogenerateasampleofestablishmentsforthesurvey.TheEEframewasestablishedandismaintainedbytheDepartmentofStatistics(DOSM)andithasanationalcoverageofestablishments.TheEEframehasbeenusedforallnationalestablishmentsurveystogeneratelabourforcestatisticsthathasservedasinputstosocialandeconomicplanning.Inusingthisframe,theNER2016surveydatacanbeprojectedtothenationaleconomy.Thus,theNER2016surveycanalsobecomparedwithnationalsurveys,suchasthe2016EconomicCensus,andthuscreatesaricherplatformforfurtheranalysisandresearch.

With respect to the NER 2016 results, 77% of the establishments surveyed are inPeninsularMalaysia,9.9%inSabahandW.P.Labuan,and13.1%inSarawak.Theshareof SMEs (Small andMedium Enterprises) is 93.9% of all establishments inMalaysia.The largestsector isServices,at77.3%ofallestablishments inthesurvey;thissectorcompriseofWholesaleandRetailTrade(WRT),Accommodation,Foodserviceactivitiesandotherserviceindustries.Bystatus,about46.4%oftheestablishmentsareprivatelimited companies, while 31.5% of the establishments are sole proprietors. In terms


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ofownership,almosttwo-thirdsoftheestablishmentsregisteredareNon-Bumiputeraowned(62.6%),whichistwicetheproportionofBumiputera-ownedcompanieswhichonlycomprise30%.

TheworkforceintheNER2016Surveyconsistof82.9%Malaysianemployees,and17.1%foreignemployees.MalaysianemployeesareemployedintheServicesandManufacturingsectorsandbothcomprisethelargestsectoralshareat73.9%and17.2%respectively.ForeignemployeesalsoareconcentratedinthetwosamesectorswithManufacturingandServicesaccountingfor40.1%and30.5%respectivelyofallforeignworkers.

The ratio of foreign to local employees is most significant in the Agriculture sectorwherethereare197foreignemployeesforevery100localemployees.MostMalaysiansemployeesareintheserviceandsalesoccupationalcategory,whereasforeignemployeesaremainlyfoundintheelementaryoccupations.

In terms of gender distribution, theoccupationswith thehighestmale-female ratiosare in the skilled agricultural, forestry, livestock and fishery category: 470males forevery100females.Thisisfollowedbycraftandrelatedtradeworkers,with457malesforevery100females.Ontheotherhand,theoccupationswithproportionatelymorefemalesthanmalesareinclericalsupport,59malesper100females,andprofessionalworkers, 92males for every100 females.Generally,maleemployeesarepaidhighermediansalariesthanfemaleemployees:inthecraft&relatedtradesandalsotheplantandmachineoperatorswheremaleemployeesarepaid45%and40%higherthantheirfemalecounterpartsrespectively.

Inthisreport, For median monthly salaries at the major occupation level, thestartingsalaryof managers isRM4,000,while theirmaximumsalary isRM5,210, i.e. showingaprogressionbetween their startingand theirmaximumpay.Forprofessionals, theirmediansalariesstartatRM2,800andtheirmaximumisRM5,000.Fortechniciansandassociated professionals, themedian starting salary is RM2,000 and themaximum isRM3,600.Fortheelementaryoccupations,thestartingpayisRM900andthemaximumisRM1,350.

Foroccupationsat MASCO 2 Digit level, the median monthly salariesofmanagersintheInformation&CommunicationsTechnology(ICT)industryreceiveRM7,000,whichisthehighestmedianmaximummonthlybasic salaryamongallmanagers.Formanagers intheservicessector,theirmaximumsalaryofRM4,000permonthisthelowestmaximummediansalaryofthesixmanagersthatwererecordedatthe2digitlevel.


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As for other job categories,professionals in thehealth sectorwerepaid thehigheststartingsalaryofRM4,331withamaximumofRM7,000.TheteachingprofessionalswerethelowestpaidwithastartingsalaryofRM1,993andreachamaximumofRM3,000.

Among the technicians and associate professionals’ category, health associateprofessionalsreceivethelowestsalary:RM1,397startingsalaryandRM2,629maximumsalary. The regulatory government associate professionals enjoy the highest startingsalaryofRM2,600andRM4,532maximumsalary.

Inthecraft and related trade workers’category,thefoodprocessingandrelatedworkersarepaidthelowestbasicsalaryofRM1,650andalsoloweststartingsalary(RM1,005).ThebuildingandrelatedtradesworkersarepaidaroundRM1,500,withthemaximummonthly basic salary at RM2,750. Among the plant and machine operators and assemblers,thestartingsalariesofstationaryplantandmachineoperatorsisrecordedatRM1000,whereastheirmaximumsalaryisRM2,300permonth.

Thestartingsalariesoftheclerical supportcategoryrangefromRM1,250toRM1,500,andtheirmaximumsalariesrangefromRM2,000toRM2,500.Fortheservice and sales category, salesworkers, their starting salaries range from 938 to RM1,100 and theirmaximumsalaryfrom1,500toRM2,000.Amongthisgroup,the education and social services workers receive the lowest salaries:startingsalaryofRM1,000andamaximumofRM1,500.

Forthethreecategoryofworkers in the Agricultural sector,theirstartingsalariesrangefromRM1,000toRM1,300,andthemaximumsalariesarefromRM1,900toRM2,460.

ItcanbeseenthattheMinimumWagepolicyhastakeneffect,asthemedianstartingmonthlybasicsalaryforelementary occupationsrangefromRM900toRM1,000,higherthan in NER 2011 survey where the starting salary ranged from RM600 to RM904.Approximately 60% of the companies reported that the salaries of their lowest paidworkers have increased to theminimumwage level. Concomitantly, their profits haddecreasedsincetheminimumwagepolicywasimplemented.

In terms of starting salary by occupation forNER2016,theaverageforallmanagersisRM4,000butthemanagersintheICTandFinancesectorstoppedthelist,similartotheNER2011survey,atRM5,500.Amongtheprofessionals,theaveragestartingsalary isRM2,800andthehumanhealthsectorpaidthehighestfortheirprofessionalsatRM5,000


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(secondismining).TheaveragestartingsalaryfortechniciansandassociateprofessionalsisRM2,000andthesectorthatpaidthehighestforthisoccupationalcategoryismining(RM2,550) followedbyfinance (RM2,473). For clerical supportworker, theaverage isRM1,300andtheICTindustrypaythehighestatRM1,800.Forsalesandserviceworkers,theaverageisRM1,000andthesectorthatpaidthehighestisagainMiningatRM1,900.Amongtheelementaryworkers,theaveragestartingsalaryisRM900andthemaximumpayisbythefinancialsectoratRM1,057.

Whatisclearandconsistentovertheyearsisthatlarge variation of pay is seen among the higher occupational categories.Therangeofpayofthemanagersareverymuchgreaterthanfortheloweroccupationalcategories(elementaryworkers).Itlikelyreflectstherangeofthequalityofemployees:thegreatertherange,thegreaterthequalityoftheworkersintheoccupationalcategory.

In NER 2016, foreign-local salary ratio are tabulated. Expatriate managers are paidRM10,000asthemedianbasicmonthlysalary,50%morethanlocalmanagers.Atthetopthreeoccupational levels,themedianmonthlybasicsalaryforforeignexpatriatesarehigherthanforMalaysiansforthesameoccupationalcategory.Fortherestoftheoccupational categories,Malaysians arepaidmore than foreigners. Furthermore, thesecondbiggestmediansalarygapbetweenlocalandforeignemployeesarefoundamongtheplant&machineoperatorsandassemblers’category.Malaysianplantandmachineryoperatorsarepaid34.3%morethantheforeignemployeesinthesamecategoryofwork.

The education attainment of workers in the NER 2016 indicates that 91% of theMalaysianworkershaveatleastasecondaryeducation,with9%haveprimaryeducationor below. Approximately 3.2% of Malaysian employees have vocational diploma /advanceddiploma,whichareconsideredaspartofTVETprogrammes.Around22.5%oftheestablishmentsprovidein-housetraining,and20.4%providepublictraining.Thetop2skillareasrequiredbymostofthesectorsareaccountingorfinanceandadministrationorclericalskills.

In termsof responses to the Productivity-LinkedWage System (PLWS) sectionof thesurvey, only 19.7% of the companies reported themselves as being aware of PLWS.However, all employers reward their employees based on individual employee’sperformance/productivity throughbonusesand salary increments, regardlessof theirawarenesstoPLWS.


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Theturnover rateinNER2016surveyshowthatmorethanhalf(51%)oftheestablishmentshadnoemployeeturnoverin2015.Additionally,thehighestvacancyrateforNER2016is in thesalesandservice industrycategory,at9.7%.Therewereseveralservicesub-sectorsthatreportedhard-to-fillvacancies(i.e.remainedunfilledafter3months):76.2%ofthevacanciesin2016werehardtofill.

Inconclusion,anupdatedpictureoftheworkforceandtheirsalaries/wageswasobtainedin2015(thereferenceyearoftheNER2016survey).Afterweightingthedata,thesurveyis representative of about 206,000 establishments inMalaysia, and they account forabove6millionemployees. Themedian startingandmaximummonthly salaries thatwere reported show slightly low levelswhich is likely reflectiveof the characteristicsof the firms (mainly SMEs), and the occupations that they use for undertaking theirbusinesses.


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1 INTRODUCTION

1.1 Background

The first National Employment Returns (NER) survey1 was carried out in 2007.SubsequentNERsurveyswereconductedin2009,2011and2013.Thecurrentoneisthe2016NationalEmploymentReturnsSurvey(NER2016)whichwasconductedundertheprovisionsofSection3oftheEmploymentInformationAct1953,similartotheprevioussurveyscarriedoutinthisseries.

1.2 ObjectivesoftheNER2016Survey

TheobjectivesoftheNER2016surveyareasfollows:• Tocollectinformationontheworkforcewiththeaimtoupdatethedatabase;• Toobtaininformationpertainingtoprofessionalandforeignemployees,TVET,critical

skills;• TocollectthedataassourcetobeusedintheLMIDWforfurtheranalysis;• Tocollectinformationsuchasemployers’particulars,employees’wages,education

levels,andskillsbyindustry,economiccorridors/states;and• ToanalyseandcarryoutprojectionsonthelabourmarketforfutureILMIAstudies.

1.3 ScopeandCoverage

TheobjectiveofusingasamplingapproachforNER2016surveywastoconductasurveythatisrepresentativeofthenationallabourmarketsituationinsofarasthesamplingframewasrepresentativeofthenation’seconomy.ItisimportanttonotethatthesurveyelementsoftheNERsurveysaretheestablishments(orfirms)whosetotalcompositioncoversallsectorsoftheeconomy.ThemethodologyofthesamplesurveyisdescribedintheAppendix–TechnicalNotes.

TheNER2016SurveywasconductednationwidecoveringPeninsularMalaysia,SabahandSarawak,acrossall21industrialsectorsandjobcategoriesaccordingtotheMalaysianStandardIndustrialClassification(MSIC),2008.TheoccupationswerecodedusingtheMalaysianStandardClassificationofOccupation(MASCO),2013.

1 The2002SurveywascalledtheAnnualEmploymentReturnswhichwasthestartofthisseriesofsurveys.


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ThesamplingframefromtheDepartmentofStatisticsMalaysia(DOSM)isdeemedtocontainacomprehensivelistofestablishmentsandenterprises(EEframe)coveringallsectorsoftheeconomy.ThedecisiontousetheEEframeisalsotoensuretheestimatesobtainedfromthissurveyareinlinewithandcomparabletootherestablishmentsurveysconductedbyDOSMsuchastheEconomicCensus2015.

TheNER 2016 survey collects data on awide range of topics covering the profile ofemployersandemployeesaswellastheirsalariesandwages.Dataonthetypeofjobs,educationlevels,minimumwageandproductivity-linkedwagesystemarealsocollected.

1.4 SurveyMethodology

TheNER2016surveyresultshavebeenweightedaccordingtoweightsprovidedbytheDOSM.TheTechnicalNotesintheAppendixprovidethedetails.

1.5 ConceptsandInterpretationofResults

Priorto2016,thevariousNERsurveysuseddifferentdefinitionsofwagesandsalaries.

In the 2002 Annual Employment Returns (AER), the compensation data comprisedmonthlybasicwage,monthlytotalwages(basicwagepluscashallowances)andovertimepaymentseparately.TheNER2007surveyalsousedthetermwages,tospecifymonthlywage,andbrokendownintomonthlybasicwage,totalcashallowancesandovertimewages.

Then, fortheNER2009survey, thetermsalarywasusedbut itaddedtobasicsalaryseveral other fixed and variable components. These components – namely, cashallowances,incentivesandbenefits–werereportedinoneconsolidatedamountwithnobreakdowns.Therewasdataonlyontheprevalencebutnotthequantumofthesecomponents.

The NER 2011 survey used a standard definition of wages and separated the basicwage/salaryfromperformance-basedpayaswellascashallowancesthatweregiveninadditiontobasicsalary.

InthisNER2016,thefollowingconceptsareused:

a) Basic Salary/ Basic Wage


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• MonthlyBasicSalary• Entrylevelmonthlysalary/wage

b) Incentive/ Variable Pay and Overtime• IncentivePay• Bonus• OvertimePay•

c) Allowances• ShiftAllowance• AttendanceAllowance• FoodAllowance• TransportationAllowance• HousingAllowance• LaundryAllowance• CostOfLivingAllowance• CriticalAllowance• ServicesAllowance• OutstationAllowance• EntertainmentAllowance• TelephoneAllowance

1.6 ReportContent

Thisreportisdividedinto8chapters.Thischapterprovidesthebackgroundofthesurvey,scopeandcoverage,methodologyandapproachtakenandtheconceptsusedaswellasinterpretationofthesurveyresults.Chapter2focusesontheprofileoftheemployers,highlightingthespatialandsectoraldistributionoftheestablishments,ownershipandequityandtheirsize(accordingtoemployment).

Chapter 3 describes the profile of the employees, including its spatial and sectoraldistribution,genderandnationalityaswellastheoccupationalcategoriestheyfall in.Following this, the salary and compensation administration practices, including thedifferenttypesofcompensationpaidtoemployeesarediscussedinChapter4.Chapter5focusesoncomponentsofcompensationaswellasdiscussionpertainingtoProductivity-linkedWageSystem(PLWS).AsforChapter6,detailsincludingtheeducationlevelandskillsoftheemployeesareprovided.Chapter7outlinestherecruitmentaswellasthe


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vacancies. Lastly,Chapter8highlightsabrief survey regardingminimumwagepolicy.Chapter8providesadiscussionofminimumwagesasanalysedfromthesurvey.

Inaddition,thereisatechnicalappendixwhichprovidesinformationaboutthesurveythatwouldbeusefulforanin-depthunderstandingoftheconceptsandproceduresused.


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2 PROFILE OF EMPLOYERS

This chapterdescribes the characteristicsof employers and their establishments thatparticipatedintheNER2016Survey.Whiletheterm‘Employer’iscommonlyused,thetermestablishment ismoreappropriate in the contextof this survey. Establishmentsdenotebusinessentities thatemployworkers;employers couldoperateoneormorebusinesses/establishmentsandfromoneorseverallocations.Theestablishmentisaunitofanalysis:itreferstoaproductiveactivityoperatinginonelocation.Itisselectedfromasampleframeinaccordancewithstandardisedsamplingprocedures.

According to the System of National Accounts, an establishment is defined as anenterprise,orpartof anenterprise, that is situated ina single locationand inwhichonlyasingle(non-ancillary)productiveactivity iscarriedoutor inwhichtheprincipalproductive activity accounts formost of the value added. An establishmentmay beeitheranoperationsoffice,abranchoreventhebusinessentity’sheadquarters.

TheunitofanalysisinthisNERsurveyistheestablishment.Itsrespondentsaredrawnfromtheestablishmentsandenterprises(EE)frame,maintainedbytheDepartmentofStatisticsMalaysia.TheEE framewasalsoused inNER2011andNER2013,whereasearlierNERsusedtheLabourMarketDatabase(LMD),alistofcompaniesmaintainedbytheMinistryofHumanResources.Whereverpossible,comparisonswithdatafromthepreviousNERsurveysaremade.

2.1 SpatialandSectoralDistribution

TheNER2016showsthat77%oftheestablishmentssurveyedareinPeninsularMalaysia,9.9% inSabahandW.P. Labuanand13.1% inSarawak.Table 2.1 shows the samplingdistributionoftheresponsesbyregions.ThesametablealsocomparesNER2016withthepreviousLMD-basedNERsurveyin2009andtheDOSM-basedsurveyconductedin20112. Figure 2.1showsthedistributionofestablishmentsbyregionin2016.

2 NER2013wasexcludedfromthecomparisonduetotheunweighteddata.


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Figure2.1:DistributionofEstablishmentsbyRegion,Malaysia,2016

PeninsularMalaysia77.0%

Sarawak13.1%

Sabah9.9%

Table2.1:DistributionofEstablishmentsbyRegion,Malaysia,2009-2016

2009 2011 2016

No. Percent No. Percent No. Percent

Peninsular Malaysia 193,596 83.3% 360,863 79.2% 158,514 77.0%

Sabah & W.P Labuan 19,367 8.3% 43,032 9.4% 20,335 9.9%

Sarawak 19,475 8.4% 48,700 10.7% 26,963 13.1%

Malaysia 232,437 100.0% 455,594 99.3% 205,812 100.0%

Table 2.2 shows that the Services sector is the largest sector in the NER 2016. ItcomprisesWholesaleandRetailTrade(WRT),Accommodation,FoodService,andotherserviceindustries:thissectoraccountsfor77.3%ofallestablishments.Thenextlargestproportion of establishments is from theManufacturing sector (10.7%), followed byMiningandQuarrying(9.1%).


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Table2.2:Distributionofestablishmentsbysector,Malaysia,2009-2016

Sector 2009 2011 2016

Number of Establishments

Agriculture 12,929 6,771 5,357

Mining & Quarrying 482 315 18,775

Manufacturing 19,621 25,145 21,928

Construction 12,906 29,025 593

Services 174,303 394,319 159,154Others 12,197 19 7

Total 232,437 455,594 205,814

Percentage Distribution

Agriculture 5.6% 1.5% 2.6%

Mining & Quarrying 0.2% 0.1% 9.1%

Manufacturing 8.4% 5.5% 10.7%

Construction 5.6% 6.4% 0.3%

Services 75.0% 86.6% 77.3%

Others 5.2% 0.0% 0.0%

Total 100.0% 100.0% 100.0%

Note: NER2009: Malaysia Standard Industrial Classification 2000; NER2011-2016:MalaysiaStandardIndustrialClassification2008

Table 2.3 shows further breakdown of the sector in 2016. The largest proportion ofestablishments is from thewholesaleand retail trade sector accounting for38.2%ofallestablishmentsinthesurvey.ThenextlargestshareisfromtheAccommodationandFood sectorwhichaccounts for18.9%.This is followedbyConstruction sectorwhichaccountsfor10.7%.

Table2.3:DistributionofEstablishmentsbySectorandRegion,2016

Sector

Peninsular Malaysia

Sabah and WP. Labuan Sarawak Malaysia

No Percent No Percent No Percent No Percent

Agriculture,forestry&fishing 3,619 2.3% 870 4.3% 867 3.2% 5,356 2.6%


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Sector

Peninsular Malaysia



Mining&quarrying 460 0.3% 32 0.2% 101 0.4% 593 0.3%

Manufacturing 15,346 9.7% 1,301 6.4% 2,128 7.9% 18,775 9.1%

Electricity,gas,steam&airconditioningsupply

105 0.1% 34 0.2% 30 0.1% 169 0.1%

Watersupply,sewerage,wastemanagement&remediationactivities

219 0.1% 26 0.1% 46 0.2% 291 0.1%

Construction 16,880 10.6% 2,359 11.6% 2,689 10.0% 21,928 10.7%

Wholesale&retailtrade,repairofmotorvehicles&motorcycles

63,017 39.8% 6,591 32.4% 9,016 33.4% 78,624 38.2%

Transportation&storage 3,256 2.1% 559 2.7% 1,076 4.0% 4,891 2.4%

Accommodation&foodserviceactivities

26,640 16.8% 5,844 28.7% 6,369 23.6% 38,853 18.9%

Information&communication 1,963 1.2% 36 0.2% 107 0.4% 2,106 1.0%

Financial&insurance/takafulactivities

2,490 1.6% 173 0.9% 388 1.4% 3,051 1.5%

Realestateactivities 1,253 0.8% 125 0.6% 180 0.7% 1,558 0.8%

Professional,scientific&technicalactivities

8,967 5.7% 621 3.1% 1,320 4.9% 10,908 5.3%

Administrative&supportserviceactivities

3,820 2.4% 503 2.5% 751 2.8% 5,074 2.5%

Publicadministration&defence,compulsorysocialsecurity

153 0.1% 22 0.1% 36 0.1% 211 0.1%

Education 1,431 0.9% 166 0.8% 283 1.0% 1,880 0.9%


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Sector

Peninsular Malaysia



Humanhealth&socialworkactivities 3,975 2.5% 354 1.7% 466 1.7% 4,795 2.3%

Arts,entertainment&recreation 1,169 0.7% 153 0.8% 222 0.8% 1,544 0.8%

Otherserviceactivities 3,745 2.4% 565 2.8% 889 3.3% 5,199 2.5%

Activitiesofhouseholdsasemployers;undifferentiatedgoods-&services-producingactivitiesofhouseholdsforownuse

7 0.0% - - - - 7 0.0%

Total 158,515 100.0% 20,334 100.0% 26,964 100.0% 205,813 100.0%

2.2 OwnershipandEquity

ThissectiondiscussestheownershipandshareholdingstatusoftheestablishmentsintheNER2016.Fortypeoforganisation,Figure 2.2showsthat71.7%areindependententities,while17.4%areheadquarters,followedbybranches/operationsoffices(10.1%)andfranchises(1.4%).

Figure2.2:DistributionofEstablishmentsbyTypeofOrganisation,2016

71.1%

Independententity

Headquarters

Branch/OperationsOffice

Franchise

17.4%

10.1%

1.4%


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As shown in Table 2.4, 46.4% are private limited companies while 31.5% of theestablishmentsaresoleproprietors.Another17.4%arepartnerships.

Table2.4:DistributionofEstablishmentsbyTypeofOwnership,2016

No. Percent

Private limited company 95,455 46.4%

Individual proprietorship 64,806 31.5%

Partnership 35,746 17.4%

Public limited company 2,604 1.3%

Others 1,648 0.8%

Co-operative 1,468 0.7%

Association 1,269 0.6%

Government-linked company (GLC) 1,053 0.5%

Private non-profit making organisation 954 0.5%

Limited liabilities partnership 810 0.4%

Private limited company 205,813 100.0%

The highest percentage of the establishments are non-Bumiputera owned (62.6%),whichdoublesthatofBumiputera-ownedcompanies(30%).DetailsofequityownershipareshowninFigure 2.3.

Figure2.3:DistributionofEstablishmentsbyEquityOwnership,2016

62.6%

30.0%

4.4%1.8% 1.2%

Non-bumiputera

Bumiputera

Partnershipbetweenbumiputera&non-bumiputeraForeign

Jointventureofforeignandlocalinvestment


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AsshowninTable 2.5,theprivatelimitedcompanyisthemostcommonformofownership.Forinstance,theprivatelimitedcompanyaccountsforthehighestpercentagefornon-Bumiputeraownedestablishments(49.4%).Asforjoint-ownershipsbyBumiputeraandnon-Bumiputera,thetwomostcommonformofownershipareprivatelimitedcompany(72.5%)andpartnership (18.8%). Similarly, for foreign-ownedestablishments,almost90%of themareprivate limitedcompanies. Lastly, for joint venturebetween foreignandlocalinvestments,theprivatelimitedcompanyisalsotheclearfavourite(87.7%).However, 45.6% of Bumiputera-owned establishments are individual proprietorshipwhileprivatelimitedcompanyaccountsforonly31.9%.

Table2.5:DistributionofEstablishmentsbyTypeofOwnershipandEquity,2016

Ownership Type

Establishments by Equity Ownership (%)

Bumiputera Non-bumiputera

Partnership between

bumiputera & non-

bumiputera

Joint venture

of foreign and local

investment

Foreign Total

Individual proprietorship 45.6% 28.3% 1.2% 0.0% 1.8% 31.5%

Private limited company 31.9% 49.4% 72.5% 87.7% 89.9% 46.4%

Partnership 15.1% 19.1% 18.8% 3.4% 0.6% 17.4%

Co-operative 2.0% 0.1% 1.7% 0.0% 0.3% 0.7%

Government-linked company (GLC)

1.4% 0.1% 0.3% 0.8% 0.1% 0.5%

Association 1.2% 0.4% 0.6% 0.0% 0.0% 0.6%

Public limited company 1.2% 0.9% 3.8% 6.7% 5.5% 1.3%

Others 0.9% 0.7% 0.6% 1.0% 1.5% 0.8%

Private non-profit making organisation

0.6% 0.4% 0.3% 0.2% 0.1% 0.5%

Limited liabilities partnership 0.1% 0.5% 0.3% 0.2% 0.2% 0.4%


24

Ownership Type

Establishments by Equity Ownership (%)

Bumiputera Non-bumiputera

Partnership between

bumiputera & non-

bumiputera

Joint venture

of foreign and local

investment

Foreign Total

No. of Establishments (n)

61,670 128,877 9,117 2,417 3,736 205,817

EstablishmentSize

Oftheestablishmentssurveyedin2016,86%ofthemaremicroandsmallfirms,asshowninFigure 2.4below.Figure 2.4alsohighlightsthatabout7.9%oftheestablishmentsaremedium-sized,and6.2%arelarge-sized.

Figure2.4:DistributionofEstablishmentsbySize,2016

Figure 2.5showsthatthetopthreelargeestablishments(75employeesandabove)arefrom theAgriculture, Forestry& Fishing; Electricity, Gas, Steam andAir ConditioningSupply; and Public Administration&Defence, compulsory Social Security sectors.Ontheotherhand,establishmentswith lessthan30workersaredominatedbyactivitiesofhouseholdsasemployers:undifferentiatedgoods-&services-producingactivitiesofhouseholdsforownuse;Humanhealth&socialworkactivities;andAccommodation&foodserviceactivities.

86.0%

7.9%

6.2%

MicroandSmall

Medium

Large


25

61%

69%

82%

64%

69%

87%

86%

76%

92%

73%

80%

84%

91%

83%

77%

67%

94%

81%

91%

MicroandSmall Medium Large

100%

14%

21%

11%

19%

22%

9%

7%

14%

5%

16%

10%

10%

6%

9%

9%

20%

3%

9%

9%

24%

9%

7%

17%

10%

4%

6%

10%

3%

11%

10%

5%

2%

8%

14%

13%

2%

10%

3%

0%

Figure2.5:DistributionofEstablishmentsbySizeandIndustry,2016

Note:Manufacturing:MicroandSmall-Lessthan75employees,Medium-75-200employees,Large-morethan200employeesNon-manufacturing: Micro and Small - Less than 30 employees, Medium – 30-75employees,Large-morethan75employees

Agriculture,forestry&fishing

Mining&quarrying

Manufacturing


Watersupply,sewerage,wastemanagement&...

Construction

Wholesale&retailtrade,repairofmotorvechiles&..

Transportation&storage


Information&communication


Realestateactivities

Profesional,scientific&technicalactivities


Publicadministration&defence,compulsorysocial..

Education

Humanhealth&socialworkactivities

Arts,entertainment&recreation

Otherserviceactivities

Activitiesofhouseholdasemployers;undifferentiated..


27

3 Profile of Employees

ThischapteranalysestheprofileoftheemployeesintheNER2016survey.Someofthekeydemographiccharacteristicssuchasgender,nationalityandoccupationalcategoryarediscussedinthischapter.

3.1 EmploymentSize

From the NER 2016 Survey, the surveyed workforce consists of 82.9% Malaysianemployees,and17.1%foreignemployees.ThiscompositionisalmostsimilartotheNER2011survey(pleaseseeFigure 3.1).

Figure3.1:DistributionofEmployeesbyCitizenship,2016

17.1%

82.9%

Malaysian

Foreign

3.2 SpatialandSectoralDistribution

PeninsularMalaysia,comprising11statesandtheFederalTerritoriesofKualaLumpurandPutrajayahasthelargestconcentrationofemployeesofthethreeregions.Accountingfor 81.7%of the total employees by region, PeninsularMalaysia also has the largestnumberofemployeesinMalaysia.Sarawakhas12.7%ofallemployees.ThisisfollowedbySabahandtheFederalTerritoryofLabuan(5.6%).Table 3.1showsthedistributionofMalaysianandforeignemployeesbyregion.


28

Table3.1:DistributionofEmployeesbyRegion,2016

RegionMalaysians Foreigners Total Employees

no. percent no. percent no. percentPeninsular Malaysia 4,125,744 81.7% 830,193 79.6% 4,955,938 81.4%

Sabah and WP. Labuan 281,203 5.6% 95,181 9.1% 376,384 6.2%

Sarawak 640,206 12.7% 117,682 11.3% 757,888 12.4%

Total 5,047,153 100.0% 1,043,057 100.0% 6,090,210 100.0%

Table 3.2outlinesthedistributionofemployeesbynationalityandbysector.Amongthelocalemployees,theServicessectoraccountsforthelargestshareat73.9%,followedbytheManufacturingSectorat17.2%.

ForeignemployeesareconcentratedintheManufacturingandServicessectorsat40.1%and30.5%respectively.

TheratioofforeigntolocalemployeesishighestintheAgriculturesectorwherethereare197foreignemployeesforevery100localemployees.

Table3.2:DistributionofEmployeesbySector,2016

SectorMalaysian Foreign Total Employees Foreign/

Local ratio (Local=100)no. percent no. percent no. percent

Agriculture 120,382 2.4% 236,585 22.7% 356,967 5.9% 197

Manufacturing 867,309 17.2% 418,252 40.1% 1,285,561 21.1% 48

Construction 311,725 6.2% 69,052 6.6% 380,777 6.3% 22

Mining 16,757 0.3% 1,554 0.1% 18,311 0.3% 9

Services 3,730,921 73.9% 317,614 30.5% 4,048,535 66.5% 9

Other Industry 60 0.0% 60 0.0% 0

Total 5,047,153 100.0% 1,043,057 100.0% 6,090,210 100.0% 21


29

11.5%

2.0% 10

.4%

2.3% 7.2

%

0.7%

18.4%

0.9%

23.1%

8.0%

0.5% 4.9

%5.3% 7.3

% 10.1%

26.3%

13.6%

47.7%

Malaysian

Managers Professionals Technicials&AssociateProfessional

ClericalSupportWorkers

ServiceandSalesworkers

SkilledAgricultural,Forestry,Livestock&FisherWorkers

Craft&RelatedTradesWorkers

Plant&Machine

Operations,&Assemblers

ElementaryOccupations

Foreign

3.3 OccupationalStructure

The occupational distribution of Malaysian and foreign employees are noticeablydifferentbyjobcategory.Employeesintheserviceandsalescategory(23.1%)formthelargestgroupamongtheMalaysianemployees.Thenextlargestgroupcomprisesthosein the categoryof clerical supportworkers at 18.4% (seeFigure 3.2).Figure 3.2 alsoshowsthatforeignemployeesaremainlyfoundintheelementaryoccupations(47.7%),andtheplant&machineoperatorsandassemblers(26.3%)categories.

Figure3.2:DistributionofMalaysianandForeignEmployeesbyJobCategory,2016

Table 3.3 shows that the labour-intensive industrieshavea larger shareof the loweroccupational categories. For example, in the Agriculture, Forestry and Fishing sector,66.6%ofworkersareholdingElementaryoccupations.About45.1%oftheemployeesintheWholesale&RetailTrade,RepairofMotorVehicles&Motorcyclesareserviceandsalesworkerswhile46%oftheemployeesintheElectricity,Gas,Steam&AirConditioningSupplysectorareclericalsupportworkers.

The Education; Financial & Insurance/Takaful Activities; and Human Health & SocialWorkActivitiessectorshavethehighestproportionofhighly-skilledemployees inthemanager,professionalandtechnician&associateprofessionalcategoriesthataccountfor69.9%,58.6%and52.7%,respectively.


30

Table3.3:DistributionofEmployeesbySectorandJobCategory,2016

Sector

Distribution of workers (per cent)

Total

Managers ProfessionalsTechnician

& Associate Professionals

Clerical Support Workers

Service & Sales Workers

Skilled Agricultural,

Forestry & Fishery Workers

Craft & Related Trade

Workers

Plant & Machine

Operator & Assemblers

Elementary Occupations

Agriculture,forestry&fishing 3.2% 0.7% 0.8% 5.7% 1.0% 15.5% 1.4% 5.0% 66.6% 100.0%

Mining&quarrying 10.7% 8.3% 5.7% 12.8% 4.0% 0.7% 8.3% 26.5% 23.1% 100.0%

Manufacturing 7.4% 6.6% 8.8% 7.1% 1.9% 0.2% 8.4% 41.9% 17.8% 100.0%


2.2% 8.9% 12.5% 46.0% 21.0% - 1.8% 4.4% 3.4% 100.0%


5.2% 10.0% 16.9% 20.0% 2.6% - 6.3% 23.3% 15.7% 100.0%

Construction 11.4% 6.7% 7.8% 28.6% 2.3% 0.5% 15.9% 7.2% 19.4% 100.0%


10.4% 5.6% 2.5% 15.7% 45.1% 0.4% 3.5% 4.2% 12.5% 100.0%

Transportation,storage 9.7% 12.3% 4.5% 23.2% 7.4% 0.1% 4.0% 19.9% 19.1% 100.0%


10.6% 7.1% 1.5% 15.2% 17.4% 0.2% 9.5% 4.0% 34.6% 100.0%

Information&communication 20.7% 30.1% 20.8% 15.7% 8.6% - 0.8% 2.0% 1.3% 100.0%


17.1% 23.6% 17.8% 22.4% 11.8% - 0.1% 0.4% 6.6% 100.0%

Realestateactivities 19.9% 10.6% 9.3% 19.8% 10.1% 0.3% 6.3% 3.0% 20.6% 100.0%


11.2% 20.2% 10.4% 34.4% 2.6% 2.3% 2.9% 3.6% 12.5% 100.0%


7.2% 16.6% 3.4% 11.7% 15.2% - 5.6% 7.1% 33.2% 100.0%


6.0% 5.2% 10.8% 41.0% 15.1% 4.3% 3.9% 2.4% 11.3% 100.0%

Education 14.0% 50.1% 5.8% 14.1% 7.5% 0.1% 1.7% 1.5% 5.4% 100.0%


8.4% 19.6% 24.8% 16.9% 17.9% 0.3% 1.4% 0.8% 10.0% 100.0%


10.5% 5.5% 8.1% 13.5% 15.1% 0.5% 9.9% 15.3% 21.6% 100.0%

Otherserviceactivities 12.1% 14.3% 4.9% 14.8% 13.7% 0.7% 9.5% 13.0% 16.9% 100.0%

Householdsasemployer 8.8% - - 11.8% - - 17.6% 8.8% 52.9% 100.0%

Total 9.9% 9.0% 6.1% 15.4% 20.5% 1.2% 5.6% 12.9% 19.4% 100.0%


31

3.4 Gender

The gender distribution of employees is not evenly distributed. Some occupationshavemoremaleswhile others havemore female employees. The female dominatedoccupations are the clerical supportworkers and among the professionals. Table 3.4shows59malesper100femalesintheclericalsupportworkerscategoryand92malesfor every 100 females in the professionals category. In the latter, it is likely that thelargenumbersofwomenintheteachingandnursingprofessionscouldhavetippedthebalance.

Thehighestmaledominatedoccupationsarethoseintheskilledagricultural,forestry,livestockandfisheryworkerscategorywith470malesforevery100females.

Table3.4:SexRatioofEmployeesbyJobCategory,2016

Male Female Sex Ratio(per 100 Females)

Managers 376,909 224,066 168

Professionals 262,767 287,143 92

Technicians&AssociateProfessionals 240,044 128,884 186

ClericalSupportWorkers 347,231 591,526 59

ServiceandSalesWorkers 738,778 509,048 145

SkilledAgricultural,Forestry,Livestock&FisheryWorkers 62,380 13,271 470

Craft&RelatedTradesWorkers 280,214 61,328 457

Plant&MachineOperators,&Assemblers 572,542 212,832 269

ElementaryOccupations 910,337 271,254 336

Total 3,791,202 2,299,352 165

Table 3.5showsthedominanceofmaleemployeesinallsectorsexceptfortheHumanHealthandSocialWorkActivities;Education;andFinancial&Insurance/TakafulActivitiessectors.TheMiningandQuarryingsectorhasthehighestgenderdisparitywith488maleper100femaleemployees.


32

Table3.5:SexRatioofEmployeesbySector,2016

SectorNumber of Employees Sex Ratio

(per 100 Females)Male Female

Agriculture,forestry&fishing 281,781 75,185 375

Mining&quarrying 15,200 3,112 488

Manufacturing 845,928 439,633 192

Electricity,gas,steam&airconditioningsupply 23,952 10,341 232

Watersupply,sewerage,wastemanagement&remediationactivities 20,312 5,354 379

Construction 306,820 73,957 415

Wholesale&retailtrade,repairofmotorvehicles&motorcycles 1,301,406 873,164 149

Transportation&storage 130,533 52,526 249

Accommodation&foodserviceactivities 290,261 216,473 134

Information&communication 57,192 41,244 139

Financial&insurance/takafulactivities 144,372 161,519 89

Realestateactivities 20,417 13,691 149

Professional,scientific&technicalactivities 117,867 98,373 120

Administrative&supportserviceactivities 102,719 68,340 150

Publicadministration&defence,compulsorysocialsecurity 8,049 4,180 193

Education 39,969 47,989 83

Humanhealth&socialworkactivities 24,394 67,967 36

Arts,entertainment&recreation 31,461 18,343 172

Otherserviceactivities 28,546 27,923 102


23 37 62

Total 3,791,202 2,299,352 165


33

4 Salary and Compensations

4.1 Introduction

Companiespaytheiremployeesindifferentways.Abasicsalaryorwageistheagreedpricethatanemployerwouldpayhisemployeetoworkunderspecificconditionsandresponsibilities.

Apart from basic salary, there are other forms of payment, such as performancebonuseswhichareincentivestoincreaseproductivityorallowancestosupplementtheemployees’salaryduetojobrequirement.(Notethattherearealsonon-cashpaymentsuchasleave,insurance,training,etc.)

Thischapterreportsontheminimumandmaximumbasicsalary,currentbasicsalaryandvariouscomponentsofpaypracticesbytheestablishments.Amongthecomponentsdescribedarebasicsalarydifferentialbyregion,jobcategoryandgender.

Theanalysis also includes current salariesby job category,which reflects the currentsituationofthelabourmarket.

WiththelatestreviewoftheminimumwagepolicythatcameintoeffectJuly2016,theminimumwageisRM1,000inPeninsularMalaysia,andRM920inSabahandSarawak.

4.2 MinimumandMaximumBasicSalaryofMalaysianEmployees

InMalaysia,thesalarystructurehasshiftedupwards,possiblyduetotheimpactfrombothMinimumWagepolicyaswellastheEconomicTransformationProgramme(ETP).Inthissection,weshallreportthemediansalary,andalsobasicsalaryandtotalsalary(whichincludesperformancepayaswellasbenefitsandfixedallowances).Themedianis the salarywhere 50%of thefirms that respondpay less than this salary and50%paymorethanit.Ifthereareextremevaluesinthesalariesreported,thenthemedianprovidesthehalf-waypointandisNOTinfluencedbytheextremes.Anillustrationmaybehelpful.Letussaythereare3managersandtheirsalariesare:RM2,000,RM3,000andRM10,000.ThemeansalarywouldbeRM5,000(whichisthesumofallthreesalariesdivided by 3). Themedian salary is the 50%point,which is RM3,000.Note that themediansalaryisnotaffectedbythelow(RM2,000)andhighvalue(RM10,000),unlikethemean.Theimportantpointhereisthatthemediansalaryisthemid-pointofsalariespaidbyfirms,butitisnotthemeanofsalariesforaparticularoccupation.


34

Figure 4.1showsthebasicsalaryrangepaidbyfirmsfordifferentjobsoroccupationalcategories. Salaryrangeistherangeofwagespaidbyemployers,fromthelowesttothehighestforaparticularjoboroccupation,oralternatively,astarting(i.e.minimum)andamaximumbasicsalary.

ThemedianstartingsalaryformanagersisRM4,000(i.e.50%offirmspaidtheirmanagersa startingsalary less thanRM4,000and50%offirmspaid theirmanagersmore thanRM4,000)whilethemedianmaximumsalaryisRM5,210.Forprofessionals,thestartingandmaximummedianbasicsalaryrangesfromRM2,800toRM5,000.

Forloweroccupationalgroups,themaximumbasicsalaryforserviceandsalesworkers,skilledagricultural,forestry,livestockandfisheryworkersandplant&machineoperators,andassemblersissimilar,whichisRM2,000.

Forthosewhoareundertheelementaryoccupationscategory,theirmaximummedianbasicsalaryatRM1,350,whichisthelowestamongalloccupationalcategories.

Figure4.1:StartingandMaximumMedianBasicSalaryofFirmsforMalaysianEmployeesbyJobCategory

5,210

0

1,000

2,000

3,000

4,000

5,000

6,000

5,210

4,000

4,000

2,000

2,000

2,000

2,000

2,000

2,000

2,000

2,000

1,350

1,350

900

900

2,800

2,800

3,600

3,600

2,100

2,100

2,410

2,410

1,300

1,300

1,000

1,000

1,100

1,100

1,200

1,200

1,200

1,200

5,000

5,000

Managers

MaximumSalary

Startin

gan

dMaxim

umM

onthlyBasic

Salary(R

M)

StartingSalary

ProfessionalsTechnicials&AssociateProfessional





Plant&Machine

Operations,&

Assemblers



35

4.2.1 JobCategoryMASCO2Digit

4.2.1.1Managers

TheNER2016collectedoccupationaldataattheMASCO2Digitlevel.Figure 4.2showsthemedianstartingmonthlybasicsalaryforvarioustypesofmanagers.

Information& Communications TechnologyManagers receive RM7,000,which is thehighest medianmaximummonthly basic salary. However, the starting salary for ICTManagers at RM4,680, which is lower than the starting salary for Chief Executives,SeniorOfficials&Legislators,(RM5,000).ThemaximumsalaryforservicesmanagersatRM4,000permonthanditisthelowestmaximummediansalaryforallmanagersintheNER2016.

Figure4.2:MedianStartingandMaximumMonthlyBasicSalaryofFirmsforManagersbyMASCO2D

4.2.1.2Professionals

Themedian startingmonthly basic salary paidbyfirms for professionals is notmorethanRM3,000,exceptforhealthprofessionals,whoreceiveRM4,331(seeFigure 4.3).Thehealthprofessionalsalsoenjoythehighestmaximummonthlybasicsalary,whichisRM7,000.

TeachingprofessionalsreceiveonlyRM3,000astheirmedianmaximummonthlybasicsalary,whichisthelowestamongallprofessionals,enumeratedintheNER2016.

5,000

5,000

6,000

6,000

7,000

7,000

5,250

5,250

5,500

5,500

4,200

4,200

3,000

3,000

3,000

3,000

4,000

4,000

4,000

4,000

4,680

4,680

3,600

3,600MaximumSalary

Startin

gan

dMaxim

umM

onthlyBasic

Salary(R

M)

StartingSalary

11Chiefexecutives,seniorofficials&

legislators

12Administrative&commercialmanagers

13Production&manufacturing

mangers

14Hospitality,retail&otherservices

manager

15Information&communications

technologymanagers

16Servicesmanagers

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000


36

The median maximum salaries paid by firms for professionals in business andadministration,social&culturalandregulatorygovernmentcategoriesrangebetweenRM4,500andRM4,750.

Figure4.3:MedianStartingandMaximumMonthlyBasicSalaryofFirmsforProfessionalsbyMASCO2D

4.2.1.3TechniciansandAssociateProfessionals

The starting salary paid by firms for associate professionals is above RM1,300. ThemedianstartingmonthlybasicsalarypaidbyfirmsforRegulatoryGovernmentAssociateProfessionals is RM2,600. As shown in Figure 4.4, associate professionals in Healthcategoryreceivetheloweststartingsalary(RM1,397),followedbythoseinsocialandculturalcategory(RM1,638).

Figure 4.4 also shows that the RegulatoryGovernmentAssociate Professionals enjoythe highest maximum monthly basic salary (RM4,532), followed by Legal associateprofessionals(RM4,310)andScienceandEngineeringassociateprofessionals(RM3,950).

5,775

5,775

7,000

7,000

4,331

4,331

3,000

3,000

3,000

3,000

5,000

5,000

3,500

3,500

4,500

4,500

2,600

2,600

4,600

4,600

2,850

2,850

2,000

2,000

1,993

1,993

4,750

4,750

2,594

2,594

5,590

5,590

2,940

2,940

2,900

2,900MaximumSalary

Startin

gan

dMaxim

umM

onthlyBasic

Salary(R

M)

StartingSalary

01,0002,0003,0004,0005,0006,0007,0008,000

21Scienceandengineeringprofessionals

22Healthprofessionals

23Teachingprofessionals

24Business&administrationprofessionals

26Legalprofessionals

27Hospitality&relatedservices

professionals

28Social&cultural

professionals

29Regulatorygovernmentprofessionals

25Information&communica

tionstechnologyprofessionals


37

Figure4.4:MedianStartingandMaximumMonthlyBasicSalaryofFirmsforTechniciansandAssociateProfessionalsbyMASCO2D

4.2.1.4ClericalSupportWorkers

Themedianstartingbasic salaryoffirms forclerical supportworkers isRM1,500andbelow(seeFigure 4.5).Thestartingsalaryfornumerical&materialrecordingclerksisRM1,500whileforofficeclerksandcustomerservicesclerks,itisRM1,300.

The clerical support workers category’s highest maximummonthly salary of firms isRM2,500 fornumericalandmaterial recordingclerks, followedbyRM2,140 forofficeclerksandRM2,000forcustomerserviceclerksandotherclericalsupportworkers.

Figure 4.5:Median Starting andMaximumMonthly Basic Salary of Firms for ClericalSupportWorkersbyMASCO2D

3,950

3,950

2,629

2,629

1,397

1,397

3,800

3,800

2,000

2,000

4,310

4,310

2,500

2,500

3,000

3,000

1,800

1,800

3,500

3,500

1,638

1,638

4,532

4,532

2,600

2,600

1,900

2,140

2,140

2,000

2,000

2,000

2,000

2,500

2,500

1,900

1,900

1,300

1,300

1,500

1,500

1,250

1,250

1,900MaximumSalary

MaximumSalary

Startin

gan

dMaxim

umM

onthlyBasic

Salary(R

M)

Startin

gan

dMaxim

umM

onthlyBasic

Salary(R

M)

StartingSalary

StartingSalary

0

0

500

500

1,000

1,000

1,500

1,500

2,000

2,000

2,500

2,500

3,000

3,000

3,5004,0004,5005,000

31Science&engineeringassociate

professionals

41Officeclerks 42Customerservicesclerks

43Numerical&materialrecordingclerks

44Otherclericalsupportworkers

32Healthassociate

professionals

33Business&administration

associateprofessionals

34Legalassociate

professionals

35Information&communications

technicians

36Social,cultural&relatedassociate

professionals

37Regulatorygovernmentassociate

professionals


38

4.2.1.5ServiceandSalesWorkers

Figure 4.6showsthatfirmspaytheirserviceandsalesworkersamedianofRM1,000astheirstartingbasicmonthlysalary,exceptforprotectiveservicesworkerswhoreceiveonlyRM938.

Figure 4.6alsoindicatesthattheceilingmedianmaximummonthlysalarypaidbyfirmsforthisjobcategoryisRM2,000.

Figure4.6:MedianStartingandMaximumMonthlyBasicSalaryofFirmsforServiceandSalesWorkersbyMASCO2D

4.2.1.6SkilledAgricultural,Forestry,LivestockandFisheryWorkers

BasedondatashowninFigure 4.7,firmspaytheSkilledAgricultural,Forestry,Livestockand Fishery workers RM1,000 and above as their median starting monthly basicsalary. Themarket-oriented skilled forestry, fishery andhuntingworkers arepaid thehighestmedianstartingandmaximummonthlybasicsalaryofRM1,300andRM2,460respectively.

2,000

2,000

2,000

2,000

1,500

1,500

1,770

1,770

938

938

1,000

1,000

1,048

1,048

1,100

1,100

MaximumSalary

Startin

gan

dMaxim

umM

onthlyBasic

Salary(R

M)

StartingSalary

0

500

1,000

1,500

2,000

2,500

51Personalservicesworkers

52Salesworkers 53Education&socialservicesworkers

54Protectiveservicesworkers


39

Figure 4.7:Median Starting andMaximumMonthly Basic Salary of Firms for SkilledAgricultural,Forestry,LivestockandFisheryWorkersbyMASCO2D

4.2.1.7CraftandRelatedTradesWorkers

Figure 4.8showsthatthemedianstartingmonthlybasicsalarypaidbyfirmsforCraftandRelatedTradesworkersrangefromRM1,000toRM1,500.Thehandicraft&printingworkersarepaidthelowestmedianstartingsalaryofRM1,000.TheBuilding&RelatedTradesworkers(excludingelectricians)arepaidthehighestmaximumsalary(RM2,750),followedbyMetal,Machinery&RelatedTradesworkers(RM2,722).

Figure4.8:MedianStartingandMaximumMonthlyBasicSalaryofFirmsforCraftandRelatedTradesWorkersbyMASCO2D

2,000

2,000

2,460

2,460

1,300

1,300

1,900

1,900

1,100

1,100

1,000

2,750

2,750

2,722

2,722

2,520

2,520

2,100

2,100

1,500

1,500

1,200

1,200

1,800

1,800

1,650

1,650

1,005

1,005

1,200

1,200

1,000

1,000

1,300

1,300

1,000MaximumSalary

MaximumSalary

Startin

gan

dMaxim

umM

onthlyBasic

Salary(R

M)

Startin

gan

dMaxim

umM

onthlyBasic

Salary(R

M)

StartingSalary

StartingSalary

0

0

500

500

1,000

1,000

1,500

1,500

2,000

2,000

2,500

2,500

3,000

3,000

61Market-orientedskilledagricultural&livestockworkers

71Builiding&relatedtrades

workers(excludingelectricians)

72Metal,machinery&relatedtrades

workers

73Handicraft&printingworkers

74Electrical&electronictrades

workers

75Foodprocessing&

relatedworkers

76Othercraftworkers

62Market-orientedskilledforestry,fishery&huntingworkers

63Subsistencefarmers,fishermen,hunters&gatherers


40

4.2.1.8PlantandMachineOperatorandAssemblers

ThemedianstartingmonthlybasicsalaryrangebyfirmsforplantandmachineoperatorsandassemblersisfromRM1,000toRM1,295.ThestationaryplantandmachineoperatorsarepaidthehighestmaximummonthlybasicsalaryofRM2,300permonth(seeFigure 4.9).

Figure4.9:MedianStartingandMaximumMonthlyBasicSalaryofFirmsforPlantandMachineOperatorandAssemblersbyMASCO2D

4.2.1.9ElementaryOccupations

AsshowninFigure 4.10,themedianstartingmonthlybasicsalarypaidbyfirmsfortheelementaryoccupations category range fromRM900 toRM1000,which is just abovetheMalaysianMinimumWagePolicy.Elementaryoccupationemployeesinthemining,construction,manufacturingandtransportsectorsarepaidmedianstartingsalariesofRM1,000.

Asforthemaximummonthlybasicsalary,themining,construction,manufacturingandtransport labourers,aswellasagricultural, forestry, farmingandfishery labourersarepaidhigheramountscomparedtoothercategories.

2,300

2,300

2,060

2,060

2,000

2,000

1,000

1,000

1,150

1,150

1,295

1,295MaximumSalary

Startin

gan

dMaxim

umM

onthlyBasic

Salary(R

M)

StartingSalary

0

500

1,000

1,500

2,000

2,500

81Stationaryplant&machineoperators 82Assemblers 83Drivers&mobileplant

operators


41

Managers ProfessionalsTechnicians&AssociateProfessionals


ServiceandSalesWorkers

SkilledAgricultural,Forestry,Livestock&FisheryWorkers


Plant&Machine

Operators,&Assemblers

ElementaryOccupations Total

StartingMonthlyBasicSalary(RM)

Agriculture,forestry&fishing 3,250 2,500 1,700 1,185 1,000 1,000 1,000 1,000 900 1,250

Mining&quarrying 4,000 3,344 2,550 1,250 1,900 1,500 1,215 944 1,786

Manufacturing 4,300 2,500 1,800 1,300 1,300 969 1,200 1,000 900 1,690

Electricity,gas,steam&airconditioningsupply 3,200 3,000 1,500 1,200 980 1,525 900 800 1,300

Watersupply,sewerage,wastemanagement&

remediationactivities

4,680 2,421 1,800 1,121 1,250 1,277 1,000 900 1,500

Construction 3,500 2,900 2,000 1,400 1,700 1,100 1,500 1,500 1,000 2,000


4,000 3,000 2,000 1,400 1,000 1,100 1,200 1,300 1,000 1,700

Figure4.10:MedianStartingandMaximumMonthlyBasicSalaryofFirmsforElementaryOccupationsbyMASCO2D

4.2.2 Sector

Table 4.1showsthatthemedianstartingsalariesofemployeesvarybysector.Managersin the Information& Communication and Finance& Insurance industry are paid thehighest starting salary of RM5,500 and RM5,498 respectively. On the other hand,ManagersintheAccommodationandFoodServicessectorarepaidtheloweststartingsalaryofRM2,500amonth.ProfessionalsintheHumanHealth&SocialWorksectorarepaidthehighestmedianstartingsalary(RM5,000).

Table4.1:MedianStartingSalariesofFirmsforMalaysianEmployeesbyJobCategoryandSector,2016

1,180

1,180

1,500

1,500

1,000

1,000

1,200

1,200

1,300

1,300

1,500

1,500

2,000

2,000

900

900

900

900

900

900

900

900

920

920MaximumSalary

Startin

gan

dMaxim

umM

onthlyBasic

Salary(R

M)

StartingSalary

0

500

1,000

1,500

2,000

2,500

91Cleaners&helpers

92Agricultural,forestry,farming&fishery

labourers

93Mining,construction,manufacturing&transportlabourers

94Foodpreparationassistants

95street&relatedsales&

serviceworkers

96Refuseworkers&other

elementaryworkers


42

4.3 CurrentBasicSalaryTrendsandPatterns

4.3.1 TrendsandPatterns

Table 4.2showsthemedianbasicsalarytrendofMalaysiansbythethreemainregionsfrom2009to2016.In2011,themediansalariesformanagersinSabaharesignificantlyhigher than those in PeninsularMalaysia and Sarawak.Half of the establishments inSabahpaytheirmanagersamonthlybasicsalaryofRM3,000.However,managers’salaryinSabahhasnotincreasedonaparwiththatinPeninsularMalaysia and Sarawak. In 2016 themedian basic salary formanagers in SabahwasRM3,250comparedwithRM5,063inPeninsularMalaysiaandRM4,000inSarawak.

EmployeesintheelementaryoccupationscategoryinPeninsularMalaysiaarethehighestpaidamongtheregionswithmediansalaryofRM1,126.Employeesinthiselementary






Plant&Machine



StartingMonthlyBasicSalary(RM)

Transportation&storage 3,600 2,605 2,000 1,200 1,200 1,050 1,000 900 1,600

Accommodation&foodserviceactivities 2,500 2,000 2,000 1,200 1,000 1,100 1,095 1,000 900 1,200

Information&communication 5,500 2,900 2,400 1,800 1,800 1,300 1,280 1,000 2,800

Financial&insurance/takafulactivities 5,498 3,000 2,473 1,370 1,500 821 1,584 1,700 1,057 2,450

Realestateactivities 5,000 3,300 2,200 1,500 1,500 1,600 1,630 1,500 920 2,100

Professional,scientific&technicalactivities 5,000 3,000 2,000 1,400 1,500 1,200 1,400 1,500 1,000 2,200

Administrative&supportservice

activities3,500 2,450 1,896 1,200 1,318 1,100 1,300 1,000 900 1,600

Publicadministration&defence,compulsory

socialsecurity3,245 2,131 1,750 1,260 1,200 1,280 1,000 900 1,500

Education 3,587 2,100 1,700 1,200 1,100 1,200 1,426 1,090 900 1,600

Humanhealth&socialworkactivities 3,000 5,000 1,200 1,000 900 1,000 1,150 1,200 900 1,350

Arts,entertainment&recreation 3,235 2,200 1,600 1,000 950 1,200 1,000 1,053 900 1,200

Otherserviceactivities 3,000 2,500 1,750 1,200 1,000 1,000 1,100 1,370 920 1,500

Activitiesofhouseholdsasemployers;

undifferentiatedgoods-&services-

producingactivitiesofhouseholdsforownuse

4,250 2,500

Total 4,000 2,800 2,000 1,300 1,000 1,100 1,200 1,200 900 1,650


43

occupationcategoryarepaidtheleastinSabahatRM850permonth,attheminimumwagelevel.

Table 4.2: Median Monthly Basic Salary of Firms for Malaysian Employees by JobCategoryandRegion,2009-2016

Managers Professionals Technician&Associate

ClericalSupport

Service&Sales

SkilledAgricultural,Forestry&Fishery

Craft&RelatedTrades

Plant&MachineOperator/Assemblers


MedianMonthlyBasicSalary(RM)

Malaysia

2009 2,750 2,916 1,750 1,250 850 850 1,162 1,132 737 1,527

2011 2,500 2,700 1,700 1,200 992 1,200 1,200 1,168 800 1,500

2016 5,000 3,653 2,581 1,750 1,488 1,500 1,700 1,530 1,025 2,157

PeninsularMalaysia

2009 2,750 2,969 1,750 1,250 850 850 1,250 1,175 850 1,560

2011 2,500 3,000 1,700 1,246 1,037 1,100 1,300 1,150 904 1,500

2016 5,063 3,796 2,667 1,875 1,624 1,576 1,812 1,603 1,126 2,372

Sabah&W.PLabuan

2009 3,375 2,750 1,750 1,050 611 850 850 850 592 1,370

2011 3,000 2,000 1,500 900 701 600 1,000 865 600 1,050

2016 3,250 3,025 1,908 1,350 950 1,308 1,288 1,200 850 1,450

Sarawak

2009 2,750 2,750 1,750 1,050 712 1,250 1,050 1,050 625 1,327

2011 2,600 2,313 1,700 1,200 800 1,236 1,150 1,300 700 1,317

2016 4,000 3,164 2,117 1,450 1,175 1,347 1,482 1,347 913 1,680

MediansalarylevelsforMalaysiain2016ashighlightedinFigure 4.11 showthatthereisahighervariationof(median)salariesatthehigherjobcategoriesthanatthelowerendjobsforMalaysianemployees,i.e.thegapishighestamongmanagersandlowestamongtheelementaryoccupations.

BasedontheNER2016survey,themediansalaryformanagersisaboutRM5,000permonth.Thetop25%(P75)oftheestablishmentspaytheirmanagersamedianmonthlysalaryofRM9,433orabovewhilethebottom25%(P25)paytheirmanagersRM2,800orbelow.Professionalshaveatendencytodrawalowermediansalary(RM3,653permonth) compared to managers. The top 25% (P75) of the establishments pay theirprofessionalsamedianofRM6,000ormore.

At the other end of the spectrum, i.e. the lowest job category, employees in theelementaryoccupationscategoryarepaidamediansalaryofRM1,025permonth.ThemedianmonthlysalaryforcraftandtradeworkersisRM1,700;skilledagriculture,fishing&forestryworkersarepaidRM1,500monthly;whilemachineoperatorsandassemblers


44

are paid RM1,530 amonth. This trend - ofmedian salary that is above RM1,000, isprobablyduetothelatestrevisionoftheminimumwagepolicy.

Figure4.11:CurrentMedianMonthlyBasicSalaryofFirmsforMalaysianEmployeesbyJobCategory,2016

4.3.2 Sector

In the Information and Communications industry, themanagers are paid the highestmedian salaries in2016 (seeTable 4.3).Managers in this sectorarepaid67%higherthanthenationalmediansalarywhileprofessionalsandtechniciansinthisindustryarepaid20%and27%higherrespectively.

The industry which includes activities of households as employers; undifferentiatedgoods&services,producingactivitiesofhouseholdsforownuseisreportedtopaylowersalariesthanthenationalmedian.Theirmanagersearn50%belowthenationalmedian.

ManagersintheAccommodation&FoodServiceActivitiessectorearnabout40%belowthenationalmedian.

Managers ProfessionalsTechnicials&AssociateProfessional





Plant&Machine

Operations,&

Assemblers


P25

P25

Median

2,800 2,500 1,781 1,200 980 1,000 1,125 1,096 820

5,000 3,653 2,581 1,750 1,488 1,500 1,700 1,530 1,025

9,433 6,000 3,800 2,600 2,636 2,700 2,667 2,181 1,514

Median

P75

P75

Mon

thlyBasicSalary(RM)

0

500

500

1,000

1,000

1,500

1,500

2,000

2,000

2,500

2,500


45

Table4.3:MedianMonthlyBasicSalaryDifferentialofFirmsbyJobCategoryandSector,2016



Serviceand SalesWorkers



Plant&MachineOperators,&Assemblers


Index to Malaysian Employees (Malaysia = 100)

Agriculture,forestry&fishing 90 89 88 89 81 100 91 90 90 86

Mining&quarrying 111 115 129 93 134 36 105 98 103 95

Manufacturing 110 99 100 100 134 81 101 96 101 102


100 127 92 90 63 - 112 67 89 83


120 109 106 91 141 - 100 93 93 104

Construction 100 94 115 99 134 - 105 118 101 116


100 104 94 103 101 113 103 101 119 101

Transportation&storage 100 101 107 100 134 - 99 97 103 104


60 71 79 86 70 61 79 96 90 68

Information&communication 167 120 127 127 186 - 118 118 131 197


165 126 149 115 164 181 133 124 145 167

Realestateactivities 140 105 133 116 133 150 129 105 102 139


122 115 121 114 140 68 120 122 117 140


83 98 94 90 115 - 95 103 95 97


80 90 86 88 134 - 103 100 117 93

Education 94 71 97 86 101 80 107 97 94 96


80 139 63 77 73 100 88 88 98 82


46



Serviceand SalesWorkers





Index to Malaysian Employees (Malaysia = 100)


88 94 85 85 80 102 93 91 99 82

Otherserviceactivities 80 87 81 97 90 133 84 100 106 93


50 - - - - - - 111 88 79

Malaysia-MedianSalary(RM)

5,000 3,653 2,581 1,750 1,488 1,500 1,700 1,530 1,025 2,157

4.3.3 Nationality

Figure 4.12 compares themedian salary levels ofMalaysian and foreign employees.Foreignmanagers,i.e.expatriates,arepaidmedianmonthlysalariesof50%morethanlocalmanagers.TheestablishmentspayRM10,000asthemedianbasicmonthlysalaryforforeignmanagers.Furtherresearchintothepaylevelsofforeignemployeescomparedtolocalworkersinhigherjoblevelsshowthatthereisabigrangeinmedianmonthlysalaries.Foreignemployeeswhoaremanagers,professionals,techniciansandassociateprofessionalsarepaidamediansalaryofupto29%higher.

Local employees in the lower levels, namely in all positions other than managers,professionalsandtechnicians&associateprofessionalsarepaidhighermediansalariescompared with their foreign counterparts. The biggest median salary gap betweenlocalandforeignemployeeshappensintheplant&machineoperatorsandassemblerscategory. Local employees in this category are paid 34.3% more than the foreignemployees. The job category with the second biggest gap is the skilled agricultural,forestry,livestockandfisherywherelocalemployeesarepaid33.3%higherthanforeignemployees. The elementary occupation category do not see much difference in themediancurrentsalariesoflocalandforeignemployees.Localemployeesareonlypaid5.3%higherthantheforeigncounterparts.


47

Figure4.12:MedianMonthlyBasicSalaryofFirmsbyJobCategoryandNationality

5,000

5,167

4,713

3,850

3,500

2,600

2,550

1,742

1,767

1,600

1,300 1,4

501,472 1,7

57

1,215 1,5

60

1,114

1,112

938

3,653

5,056

2,581 3,6

50

1,750

1,440

1,488

1,000

1,000

1,006

1,025

9701,7

00

1,165 1,5

301,500

10,000

Malaysian

Male

Foreign

Female

4.3.4 Gender

Generally,maleemployeesarepaidhighermediansalariesthanfemaleemployees,asshowninFigure 4.13.Employerspaytheirmalemanagersandprofessionalsabout9.6%and10%higherthantheir femalepeersrespectively.Thehighestgenderwagegap infavourofmaleemployeesareinthecraft&relatedtradesandtheplantandmachineoperatorscategorieswheremaleemployeesarepaid45%and40%higher than theirfemalecounterpartsrespectively.

Figure4.13:MedianMonthlyBasicSalaryofFirmsbyJobCategoryandGender,2016Note:ThebasicsalarybygenderaskedinNER2016onlyforMalaysianemployees.

Managers

Managers

Professionals

Professionals

Technicials&AssociateProfessional






SkilledAgricultural,Forestry,

Livestock&FisherWorkers





Plant&Machine


Plant&Machine





48

4.3.5 JobCategoryMASCO2Digit

Figure 4.14showstheMedianMonthlyBasicSalarybyJobCategoryatMASCO2Digit.Managers in the information and communication technology industry receive thehighestmedianmonthlybasicsalary- RM6,205.Intheprofessionalscategory,healthprofessionalsreceivethehighestmedianmonthlybasicsalary-RM5,672.

Cleaners, helpers and agriculture, forestry, farming and fishery labourers receive thelowestmedianmonthlybasicsalaryofRM978andRM977respectively.

Figure4.14:MedianMonthlyBasicSalaryofFirmsbyJobCategoryMASCO2Digit

6,0004,100

5,672

2,522

3,567

3,879

4,657

2,450

2,945

4,537

Managers

Technicians and Associate Professionals Clerical Support Workers

Professionals

5,000

5,000

3,5000

6,205

3,550

2,662

1,690

2,874

1,775

1,628

1,620

1,9633,700

2,300

2,185

2,411

11Chiefexecutives,seniorofficials&legislators

12Administrative&commercialmanagers

13Production&manufacturingmangers

14Hospitality,retail&otherservicesmanager

15Information&communicationstechnologymanagers

16Servicesmanagers

21Scienceandengineeringprofessionals

22Healthprofessionals

23Teachingprofessionals

24Business&administrationprofessionals

26Legalprofessionals

27Hospitality&relatedservicesprofessionals

28Social&culturalprofessionals

29Regulatorygovernmentprofessionals

25Information&communicationstechnologyprofessionals

31Science&engineeringassociateprofessionals

32Healthassociateprofessionals

33Business&administrationassociateprofessionals

34Legalassociateprofessionals

35Information&communicationstechnicians

36Social,cultural&relatedassociateprofessionals

37Regulatorygovernmentassociateprofessionals

41Officeclerks

42Customerservicesclerks

43Numerical&materialrecordingclerks

44Otherclericalsupportworkers


49

4.4 OtherCashCompensation

Thissectiondiscussestheothercashcompensationgiventoemployeesapartfromthebasicsalary.Thecashcomponentsandthebasicsalaryformthetotalcashcompensationfor employees and is usually the total take-home income before any deductions forstatutory contributions suchasEPFandSOCSO.Asabove, themedian is the statisticusedherealso.

4.4.1 CashAllowance

Table 4.4showstherangeof(median)cashallowancesfordifferentjobcategories.ThemonthlymediancashallowancesreceivedbymanagersisaboutRM600.Employeesinother jobcategoriesarepaidmedianallowancesrangingfromRM150forelementaryoccupationstoRM321forprofessionals.Atthethirdquartile(P75),managerscanreceiveasmuchasRM1,802intermsofcashallowancespermonth.Thisis,usuallyattributedtocarallowancesand/orhousingallowancesgivenbytheestablishments.

1,757

978

1,850

977

1,500

1,195

1,600

1,000

1,173

1,167

1,617

1,046

Service and Sales Workers

Craft and Related Trades Workers

Skilled Agricultural, Forestry, Livestock and Fishery Workers

Plant and Machine Operator and Assemblers

Plant and Machine Operator and Assemblers

1,4771,249

1,284

1,4671,346

1,361

1,200

1,3001,000

1,550

51Personalservicesworkers

52Salesworkers

53Education&socialservicesworkers

54Protectiveservicesworkers

61Market-orientedskilledagricultural&livestockworkers

62Market-orientedskilledforestry,fishery&huntingworkers

63Subsistencefarmers,fishermen,hunters&gatherers

71Builiding&relatedtradesworkers(excludingelectricians)

72Metal,machinery&relatedtradesworkers

73Handicraft&printingworkers

74Electrical&electronictradesworkers

75Foodprocessing&relatedworkers

76Othercraftworkers

81Stationaryplant&machineoperators

82Assemblers

83Drivers&mobileplantoperators

91Cleaners&helpers

92Agricultural,forestry,farming&fisherylabourers

93Mining,construction,manufacturing&transportlabourers

94Foodpreparationassistants

95street&relatedsales&serviceworkers

96Refuseworkers&otherelementaryworkers


50

Table4.4:CashAllowancesofFirmsforMalaysianEmployeesbyJobCategory,2016


&Associate

ClericalSupport

Service&Sales

SkilledAgricultural,Forestry&Fishery

Craft&RelatedTrades

Plant&MachineOperator/Assemblers


TotalCashAllowance(RM)

P25 243 125 100 85 84 50 100 79 53 100

Median 600 321 271 200 250 175 200 198 150 283

P75 1,802 800 610 565 720 310 527 500 400 850

Table 4.5 illustratesthemediantotalcashallowancesbysectorandjobcategory.TheFinance and Insurance sector provides relatively high cash allowances - an medianaverageofRM400permonth. Managers intheFinanceandInsurancesectoraretherecipientsofthehighestcashallowancescomparedwiththeirpeersintheothersectors.ProfessionalsinthePublicAdministration&Defence,CompulsorySocialSecurityindustryranksecondwithamedianofRM817permonth.

Table4.5:CashAllowancesofFirmsforMalaysianEmployeesbySectorandJobCategory,2016






Plant&Machine



MedianTotalCashAllowance(RM)

Agriculture,forestry&fishing 620 450 250 178 203 203 150 177 84 220

Mining&quarrying 500 306 327 200 230 133 179 220 107 250

Manufacturing 607 266 200 151 347 150 185 166 133 237


800 94 100 150 40 248 119 22 187


500 233 190 100 524 100 200 85 217

Construction 925 433 400 250 300 132 273 270 200 383


546 286 219 200 220 17 205 176 150 260

Transportation&storage 700 310 300 238 388 290 350 200 338


380 396 127 200 168 171 300 200 250

Information&communication 800 300 279 200 300 300 116 257 388


1,170 400 179 300 205 300 300 300 300 400

Realestateactivities 701 491 300 200 234 497 300 211 200 340


700 375 316 240 620 180 200 200 279 350


600 334 290 250 350 250 253 101 320


768 817 200 175 378 225 278 150 300


51






Plant&Machine



MedianTotalCashAllowance(RM)

Education 730 281 320 188 225 205 150 225 148 287


500 402 215 190 133 150 165 150 230

Arts,entertainment&recreation 614 310 191 167 189 152 150 177 123 230

Otherserviceactivities 826 370 315 300 515 230 252 125 375


800 350 300 325

Total 600 321 271 200 250 175 200 198 150 283

4.4.2 Bonus

Bonuspayouts inMalaysiaare typically calculatedasamultipleof themonthlybasicsalaryandareusuallygivenoutattheendofthecalendarorfinancialyear.TheoverallmedianbonusforMalaysianemployeesisshowninTable 4.6,anditisabout1monthofthebasicsalary.Thisamounttranslatestoabout8%oftheannualbasicsalary.Thetop25%ofemployerspayabout1.9monthbonus,whilethebottom25%payatleast0.5monthbonus.

Managers,professionals,techniciansandskilledagricultural,forestryandfisheryworkersarereportedtoreceiveamarginallyhighermedianbonuspayoutwhencomparedtotheotherjobcategories.

TheNER2016resultsshowthatSkilledworkersarepaidhigherbonusescomparedtomanagers.

Table4.6:BonusPayoutofFirmsbyJobCategoryforMalaysianEmployees,2016


& Associate

Clerical Support

Service & Sales

Skilled Agricultural, Forestry &

Fishery

Craft & Related Trades

Plant & Machine


Elementary Occupations Total

Bonus (Number of months of basic salary)

P25 0.7 0.7 0.6 0.5 0.4 0.7 0.5 0.4 0.4 0.5Median 1.2 1.1 1.2 1.0 1.0 1.5 1.0 0.9 0.9 1.0P75 2.4 2.0 2.0 1.8 1.5 2.9 1.7 1.5 1.4 1.9


52

AsdepictedinTable 4.7,employersinPeninsularMalaysiapayhigherbonusesthantheircounterpartsinSabah,W.P.LabuanandSarawakwiththeexceptionofskilledagricultural,forestryandfisheryworkersinSarawak(1.8months).

Table4.7:BonusPayoutofFirmsbyJobCategoryandRegionforMalaysianEmployees,2016

Region Managers ProfessionalsTechnician

& Associate

Clerical Support



Fishery


Plant & Machine




Peninsular Malaysia 1.2 1.1 1.2 1.0 1.0 1.5 1.0 1.0 0.9 1.0Sabah & W.P Labuan 1.0 1.0 1.0 1.0 1.0 0.9 1.0 0.8 0.5 1.0Sarawak 1.1 1.3 1.1 1.0 0.9 1.8 1.0 0.9 0.8 1.0Malaysia 1.2 1.1 1.2 1.0 1.0 1.5 1.0 0.9 0.9 1.0

FurtheranalysisshowsthatthehighestmedianbonuspayoutsaretoprofessionalsandmanagersintheWaterSupply,Sewerage,WasteManagement&Remediationactivities,i.e.2.4monthsand2.1monthsrespectively(seeTable 4.8).

Managers intheFinanceandInsurance industryrankthird,receivingamedianbonuspayoutof2months.ThelowestpayingindustryistheEducationindustrywithslightlylessthanonemonthbonuspayout.

Table4.8:BonusPayoutofFirmsbyJobCategoryandSectorforMalaysianEmployees,2016

Managers ProfessionalsTechnicians & Associate

Professionals




Forestry, Livestock & Fishery Workers


Workers

Plant & Machine

Operators, &

Assemblers


Bonus (Number of months of basic salary)Agriculture, forestry & fishing 1.8 1.8 1.7 1.5 0.9 1.6 1.0 0.8 0.7 1.3

Mining & quarrying 1.6 1.3 1.1 1.3 1.6 - 1.8 1.0 1.0 1.3Manufacturing 1.2 1.3 1.2 1.0 1.0 1.0 1.0 0.9 0.8 1.0Electricity, gas, steam & air conditioning supply

1.8 1.7 1.5 1.1 0.7 - 1.4 0.7 0.6 1.1

Water supply, sewerage, waste management & remediation activities

2.1 2.4 1.9 1.5 0.7 - 1.9 1.5 1.2 1.6

Construction 1.2 1.0 1.0 1.0 1.0 - 1.0 0.8 0.8 1.0Wholesale & retail trade, repair of motor vehicles & motorcycles

1.2 1.1 1.3 1.0 1.0 1.0 1.0 1.0 1.0 1.0

Transportation & storage 1.0 1.2 1.0 1.0 1.0 1.0 1.0 0.6 0.8 1.0


53

Managers ProfessionalsTechnicians & Associate

Professionals




Forestry, Livestock & Fishery Workers


Workers

Plant & Machine

Operators, &

Assemblers



Accommodation & food service activities 1.0 1.2 1.5 1.0 0.8 - 0.9 0.9 0.7 1.0

Information & communication 1.0 1.0 1.0 1.0 1.0 - 1.0 0.9 0.8 1.0

Financial & insurance/takaful activities 2.0 1.8 1.8 1.5 1.3 - 1.4 1.5 1.9 1.8

Real estate activities 1.8 1.9 1.8 1.3 1.0 1.4 1.4 1.0 1.0 1.4

Professional, scientific & technical activities 1.3 1.0 1.2 1.0 1.0 - 1.0 1.0 1.1 1.0

Administrative & support service activities

1.2 1.3 1.0 1.0 0.8 2.6 1.0 0.7 0.7 1.0

Public administration & defence, compulsory social security

1.4 1.7 1.2 1.1 1.0 - 0.2 1.1 0.4 1.1

Education 1.0 0.9 1.0 0.9 0.8 1.5 0.9 1.0 0.7 0.9

Human health & social work activities 1.0 0.8 1.0 1.0 0.9 4.9 1.0 0.9 1.0 1.0

Arts, entertainment & recreation 1.0 1.1 1.4 1.0 1.0 1.0 1.0 1.2 0.8 1.0

Other service activities 1.3 1.0 1.0 1.0 0.9 - 1.0 0.9 1.0 1.0

Total 1.2 1.1 1.2 1.0 1.0 1.5 1.0 0.9 0.9 1.0

4.4.3 Incentives

Thissectionbrieflyhighlightstheotherincentives,apartfrombonus,giventoemployees.Theseincentivesaretypically linkedtoperformanceorproductivity,andincludesalescommission,profitsharingandproductivityincentives.

Table 4.9showsthatemployeesinserviceandsalesjobsaregivenhigherincentivesthanemployeesinotheroccupations.Themedianincentiveforthisjobcategoryis33%ofthemonthlybasicsalary.Theincentivesforthisjobcategorycangoupto100%inthethirdquartile.


54

Table4.9:IncentivesofFirmsbyJobCategoryforMalaysianEmployees,2016

Managers Professionals Technician & Associate

Clerical Support



Fishery


Plant & Machine



Incentives (% of basic salary)

P25 6% 4% 4% 6% 8% 6% 5% 4% 4% 6%Median 21% 13% 13% 14% 33% 16% 14% 13% 14% 18%P75 87% 45% 57% 50% 100% 50% 42% 52% 56% 63%

Although all industries provide some form of incentives to their employees, theConstructionindustryprovidesthehighestincentives-35%ofthebasicsalaryacrossalljobcategories.

Employees in the clerical support category in the Water Supply; Sewerage, WasteManagementandRemediationActivitiessectorreceivethehighestincentives-109%oftheirbasicsalary(seeTable 4.10).Similarly,theprofessionalsinthisindustryreceiveupto101%oftheirbasicsalary.

Table4.10:IncentivesofFirmsbyJobCategoryandIndustryforMalaysianEmployees,2016

Industry Managers ProfessionalsTechnician

& Associate

Clerical Support



Fishery


Plant & Machine



Incentives (percentage of basic salary)

Agriculture, Forestry and Fishing 16% 11% 15% 16% 16% 16% 20% 25% 15% 16%

Mining and Quarrying 17% 4% 19% 13% 12% - 19% 27% 15% 16%

Manufacturing 16% 8% 8% 10% 27% 14% 9% 8% 9% 11%Electricity, Gas, Steam and Air Conditioning Supply

34% 18% 17% 18% 59% - - 94% 5% 18%

Water Supply; Sewerage, Waste Management and Remediation Activities

34% 101% 3% 109% 41% - - 23% 8% 21%

Construction 54% 35% 49% 25% 87% - 22% 43% 15% 35%

Wholesale and Retail Trade; Repair of Motor Vehicles and Motorcycles

25% 12% 13% 14% 34% - 19% 13% 11% 19%

Transportation and Storage 33% 9% 31% 13% 19% - 44% 37% 16% 20%

Accommodation and Food Service Activities 12% 23% 68% 26% 30% - 28% 79% 42% 28%

Information and Communication 16% 19% 6% 8% 21% - 19% 17% 6% 14%

Financial and Insurance/Takaful Activities 17% 8% 11% 6% 29% - 16% 9% 14% 11%

Real Estate Activities 30% 14% 15% 27% 31% 28% 13% 5% 11% 19%

Professional, Scientific and Technical Activities 35% 34% 15% 19% 44% - 11% 22% 5% 24%


55

Industry Managers ProfessionalsTechnician

& Associate

Clerical Support



Fishery


Plant & Machine



Incentives (percentage of basic salary)

Administrative and Support Service Activities 16% 9% 10% 35% 19% - 18% 11% 11% 17%

Public Administration and Defence; Compulsory Social Security

39% - 8% 13% 14% - 28% 4% - 12%

Education 17% 16% 24% 28% 34% 74% 3% 21% 20% 20%

Human Health and Social Work Activities 25% 17% 12% 11% 12% - 50% 4% 12% 15%

Arts, Entertainment and Recreation 17% 16% 25% 9% 19% 15% 7% 94% 8% 14%

Other Service Activities 23% 29% 26% 17% 75% - 20% 10% 10% 26%

Malaysia 21% 13% 13% 14% 33% 16% 14% 13% 14% 18%

4.4.4 OvertimePayments

ThemedianhourlyovertimepayrateisshowninTable 4.11.TheNER2016reportsthatthemedianovertimepayisRM15perhourformanagersandprofessionalswhileskilledagriculture,forestryandfishingworkersandthoseinelementaryoccupationsarepaidthelowest(RM8perhour).Thedatacollectedfromthissurveyconsistentlyshowsthattheupperoccupationalcategoriesarepaidhigherovetimeratethanthoseintheloveroccupationalcategories

Table4.11:OvertimePayofFirmsforMalaysianEmployeesbyJobCategory,2016


& Associate Professionals




Forestry & Fishery Workers


Workers

Plant & Machine



Overtime payment per hour (RM)P25 11 10 11 9 7 7 9 9 7 8Median 15 15 15 12 10 8 12 11 9 11P75 24 24 21 16 15 12 17 15 12 16


57

5 Components of Compensation and Productivity-linked Wage System

5.1 Introduction

Wage and salary administration revolves around the design and management ofemployeecompensation.Ingeneral,companiespaytheiremployeesindifferentways.Apart from giving a basic salary orwage as per contract between the employer andemployee,therearealsootherformsofpaymentsuchasperformancebonuseswhichare incentives to increase productivity or allowances to supplement the employee’ssalarydue to job requirement.This sectiondescribes thevarious componentsofpaypracticesbytheestablishments.Amongthecomponentsdescribedinthissectionaresalaryincrement,bonusesandincentives,allowances,andbenefits.

5.2 ComponentsofCompensation

5.2.1 Allowance

Figure 5.1 showsthattransportationallowanceisthemostcommontypeofallowance,22.6%ofthefirmssurveyedprovidedtransportationallowancetotheemployees.Thisisfollowedbyfood(19.1%)andtelephone(16.2%)allowances.Outstationallowanceandattendanceallowancearealsoconsideredascommontypesofallowances(both11.6%).

Figure5.1:TypesofCashAllowancesProvidedtoEmployees,2016

22.6%

19.1%

16.2%

11.6%

11.6%

6.8%

4.4%

4.2%

3.5%

2.6%

1.4%

0.9%

3.9%

Transportationallowance

Foodallowance

Telephoneallowance

Outstationallowance

Attendanceallowance

Shiftallowance

Housingallowance

Servicesallowance

Entertainmentallowance

Costoflivingallowance

Laundryallowance

Criticalallowance

Otherallowances


58

5.2.3 Productivity-linkedWageSystem

The Productivity-LinkedWage System (PLWS) was introduced by the Government in1996to linkwageswithproductivity.Theobjectivesof introducingthePLWSweretoenhance competitiveness and to ensure job stability. PLWS provides a more flexiblewagestructure,andenablescompaniestostreamlinepoliciestomeetcurrenteconomicneeds.Taking into considerationPLWS’s importance inmotivatingworkers toachievepeakperformanceandtoincreasejobsatisfaction,dataonPLWSwascollectedtoprovideaninsightonitsimpactsandeffectivenessincompanies.

AnalysisonthePLWSshowsthatonly19.7%ofthecompaniesintheNER2016areawareofPLWS(seeFigure 5.3).

5.2.2 Benefits

On the type of benefits provided to employees, the analysis shows that outpatientmedicaltreatmentisthemostcommontypeofbenefit.Figure 5.2highlightstheothercommontypesofbenefits,whichincludegroupinsurance,hospitalisation,companycarandhousingaccommodation.

Figure5.2TypesofBenefitsProvidedtoEmployees,2016

28.5%

18.8%

16.6%

16.4%

16.4%

8.1%

6.5%

5.0%

4.4%

1.0%

Outpatientmedicaltreatment

Groupinsurance

Hospitalisation

Companycar

Housingaccomodation

Utilitiessupplies

Dentaltreatment

Sportandrecreation

Subsidisedloans

Nursery/childcare


59

80.3%

19.7% Yes

No

Figure5.3:AwarenessofPLWS

5.2.3.1 Incentives

Salary increment is not deemed as a ‘must’ in compensation practice amongestablishments.Only37.9%oftheestablishmentsgivesalaryincrement(seeFigure 5.4).Thepracticeofgivingoutbonusesasaresultofperformanceisprovidedby41.2%oftheestablishments.Salescommission isalsorewarded(8.7%)aspartof the incentivestothosewhoachievesalestargetandshowpromisingsalesgrowth.

Figure5.4TypesofIncentivesGiventoEmployees,2016

41.2%

8.7%

5.0%

1.1%

0.9%

0.8%

0.5%

Bonus

Salaryincrements

Salescomission

Attendanceincentive

Skillallowance

Servicecharge

Piecerate

Coaching/teachingallowance


60

5.2.3.2 SalaryIncrementandBonusbyPerformance

Althoughmorethan80%oftheemployerssurveyedinNER2016arenotawareofthePLWS, they pay bonus and give salary increments to their employees based on theindividualemployee’sperformance/productivity(seeFigure 5.5).

Thesurveyanalysisshowsthatemployershaveatendencytofocusontheaggregationofindividualemployee’sperformance/productivityandcompany’sprofitandperformanceas the criteria for rewarding bonuses and salary increment. However, the individualemployee’s performance and productivity is still the main consideration for salaryincrementandbonus.Company’sprofitandperformanceisthesecondmostimportantcriteriausedbyemployerstogiveoutincentives.

Figure5.5SalaryIncrementsandbonusbyperformance

Figure 5.6 indicatesthatalthoughmostoftheestablishmentsarenotawareofPLWS,themajority of the employers still contribute salary increment and bonus payout totheir employees. For example, an average of 65%of employerswho are unaware ofPLWSgivesalaryincrementandbonusbasedonindividualemployee’sperformanceandproductivity.

87.1% 80.2%

56.0% 51.6%

9.3% 8.6%

6.8% 6.2%

Employeeperformance/productivity

Companyprofit/performance

Team/departmentperformance

Contractualbonus

Salary increments Bonus payouts


61

Figure5.6:SalaryIncrementsandBonusPayoutsbyAwarenessofPLWSoftheEmployers,2016

30.2% 31

.6% 34.5% 35

.4%

30.9%

31.7%

37.3%

28.9%

69.8%

68.4%

65.5%

64.6% 69

.1%68.3%

62.7%

71.1%


AwareofPLWS NotawareofPLWS


Companyprofit/

performance

Companyprofit/

performance



Contractualbonus

Contractualbonus


63

6 Education and Skills

6.1 Introduction

Employeesarerequiredtohaveacombinationofskillsetstobeabletoperformtheir jobsproficiently.Certain jobsrequiregreateremphasisontechnicalskillswhileothersplacemore importanceon soft skills. Skills requirementdependonthelevelandtypeofoccupationaswellastheindustry.Therightskillsetwillenableanemployeetocarryouthisorhertaskswiththeminimumamountoftime,energy,orboth.Anemployeecanachievetherightlevelofskillsthrougheducationor training.Fromtheemployer’sperspective,havingtherightskills,knowledge,attitudeandcommercialunderstandingwillenable theemployeestobecompetentandmakeproductivecontributionstoorganisationalobjectives.Thischapterdiscussesandhighlightstheeducationlevelandthecurrentskillsetsthatare requiredofemployees inMalaysiaacross thedifferent jobcategoriesandindustries.

6.2 EducationLevel

Almost half of the Malaysian employees (47.6%) have secondary school education.Bachelordegreeholdersaccountfor14.8%anddiplomaholdersaccountfor14.1%oftheMalaysianemployees.Approximately3.2%oftheemployeeshavevocationaldiploma/advanceddiploma,1.9%haveamaster’sdegreeand9.4%haveacertificate.(seeFigure 6.1).

Figure6.1:PercentageofMalaysianEmployeesbyEducationalLevel,2016

Primary,5.7%

Noformaleducation,3.3%MasterDegreeandabove,1.9%

Degree,14.8%

Certificate,9.4%

Diploma,14.1%

Secondary,47.6%SKM3,Diploma,MalaysianSkills

AdvancedDiploma,3.2%


64

6.3 RequiredSkills

Basicskillsarenecessarytoperform,maintain,doajobproficiently.Thesebasicskillsdefinetheemployabilityofaworkerandaregenericinnature.Basicskillsaretransferabletoallindustries,businesses,andjoblevelsfromtheentry-levelemployeetothemostsenior-levelemployee.

According to Table 6.1, most of the establishments require their managers to haveproblem-solving skills and the ability to work independently. Employers also requiretheirmanagerstobewellroundedinalltheskills,evensoftskills,andtheymustbegoodteamplayers.However,fortheprofessionalandtechnicalemployees,theestablishmentsdonotrequirethesameskillsetsasfortheirmanagers. Interestingly,clericalsupportworkersarerequiredtohavemorebasicskills thanforprofessionalsandtechnicians.ThismaybeduetothefactthatforSMEs,theclericalsupportemployeesareessentiallydeputymanagersandruntheoperationsofthefirmwhenthemanagersarenotaround.Forthelowerjobcategories,thedemandforskillsismuchless.

Table6.1:SkillsRequirementbyJobCategory,2016

PercentageofEstablishment

Numeracy Communi-cationskills

Creative/criticalthinking

Problem-solvingskills

Abilitytoworkindependently

Teamwork

Managers 59.1% 65.2% 60.7% 65.8% 64.7% 63.1%

Professionals 25.6% 28.8% 27.8% 29.0% 29.1% 28.7%

Technicians&AssociateProfessionals

15.3% 18.1% 16.6% 20.5% 20.8% 21.1%

ClericalSupportWorkers 44.6% 50.0% 32.1% 42.4% 52.8% 52.1%

ServiceandSalesWorkers 28.2% 38.6% 24.2% 30.6% 35.6% 36.8%


3.4% 4.3% 3.8% 4.6% 5.7% 6.3%

Craft&RelatedTradesWorkers 7.2% 9.2% 8.4% 10.9% 12.6% 13.1%


7.5% 9.9% 7.3% 11.1% 14.6% 15.6%

ElementaryOccupations 14.4% 20.6% 10.8% 15.6% 25.9% 29.1%


65

6.4 Training

Thefindings fromthis surveyshowthatnotallemployeesaresent for training,evenfor theestablishments thathavea trainingpolicyorplan inplace. Employershaveatendencytouseoutside(publicorprivate)trainingproviders.

Of theestablishments thatprovide training,27.7%of themprovide in-house trainingto91%ormoreoftheiremployees(seeTable 6.2).About42.5%oftheestablishmentsprovidepublictrainingto10%oftheiremployees.

Table6.2:DistributionofEstablishmentsbyPercentageofEmployeesTrained in2015andTypeofTraining

PercentageofWorkersTrainedPercentageofEstablishments

InHousetraining PublicTraining

10%andbelow 23.5% 42.5%

11%-30% 15.4% 22.2%

31%-50% 13.8% 14.6%

51%-70% 10.1% 6.0%

71%-90% 9.5% 4.3%

91%andabove 27.7% 10.4%

Total 100.0% 100.0%

Percentageofestablishmentsprovidingtraining 22.5% 20.4%

Figure 6.2showstheproportionofemployeestrainedin2015bytypeoftraining.Almosthalfoftheclericalsupportworkers(48.5%)receivedin-housetraining.About42.6%ofprofessionals and 42.5%of technicians and associate professionals category receivedin-housetraining.

About23.4%,18.9%and11.8%oftheemployerssenttheirmanagersprofessionals,andtechniciansandassociateprofessionals,respectivelyforpublictraining.


66

Figure6.2:ProportionofEmployeesTrainedin2015byTypeofTraining

InthisNER2016survey,theemployerswereaskedto indicatethetop15criticalskillareas or training required by their employees. Figure 6.3 shows that most of theemployerswanttheirworkerstobeequippedwithaccountingorfinanceskills,followedbyadministrationorclericalskillsaswellasmarketingandsalesskills.

Less than3%of theestablishments require their employees tohavemaintenanceorsystemandcontrolskills.

Theestablishmentsindicatedthataccountingorfinanceandadministrationorclericalskillsaremostneededformanagers.Thesameskillsetsarealsorequiredforprofessionals;techniciansandassociateprofessionals;andclericalsupportworkers(seeTable 6.3).

31.1%

42.6%

18.9%

42.5%

11.8%

45.8%

11.1%

40.2%

11.0%

29.4%

41.6%

39.8%

4.3%

38.7%

5.3%

40.6%

10.9%

2.4%

9.6%

23.4%







Plant&Machine



Total

InHousetraining PublicTraining


67

Figure6.3:Top15CriticalAreaofSkills/TrainingNeeded

13.4%

9.2%

6.9%

5.6%

5.3%

5.2%

5.0%

4.6%

4.5%

4.2%

4.1%

3.8%

3.4%

3.1%

2.8%

Table6.3:Top5CriticalAreaofSkills/TrainingNeededbyJobCategory

Top5TrainingsNeeded

1 2 3 4 5

Managers 01-AccountingorFinance(14.0%)

03-AdministrationorClerical(8.9%)

21-MarketingandSales(7.2%)

19-ManagementorStrategic

Management(6.8%)

14-HumanResources(6.1%)

Professionals 01-AccountingorFinance(14.6%)




Management(6.2%)


Technicians & Associate Professionals

01-AccountingorFinance(11.5%)


11-Engineering(7.4%)

31-SafetyandHealth(6.4%)

34-Supervisory5.8%)







Management(5.2%)





34-Supervisory(5.7%)

12-FoodandBeverages(5.6%)

Skilled Agricultural, Forestry, Livestock & Fishery Workers




35-TeamBuildingorMotivation(6.6%)


Craft & Related Trades Workers



28-QualityandProductivity(6.5%)



Plant & Machine Operators, & Assemblers

20-ManufacturingorProduction(9.8%)




18-MaintenanceorSystemandControl

(6.4%)

Elementary Occupations





35-TeamBuildingorMotivation

(6.0%)

01-AccountingorFinance

03-AdministrationorClerical

21-MarketingandSales

19-ManagementorStrategicManagement

14-HumanResources

34-Supervisory

31-SafetyandHealth

28-QualityandProductivity

35-TeamBuildingorMotivation

07-ComputerorInformationandTechnology

04-AuditorTax

11-Engineering

12-FoodandBeverages

20-ManufacturingorProduction

18-MaintenanceorSystemandControl


68

Table 6.4outlinesthetop5criticalskillareasortrainingneedsbysector.Thetop2skillareasrequiredbymostofthesectorsareaccountingorfinanceandadministrationorclericalskills.Theestablishmentsalsoindicatedrelevantspecialisedskillsarerequiredfordifferentsectors.Theyincludemanufacturingorproductionskillsforthemanufacturingsector;foodandbeverageskillsfortheaccommodationandfoodserviceactivities;andeducationortrainingskillsfortheeducationsector.

Table6.4:Top5CriticalAreaofSkills/TrainingNeededbySector

Top 5 Trainings Needed

1 2 3 4 5

Agriculture, forestry & fishing




19-ManagementorStrategicManagement(8.1%)


Mining & quarrying






Manufacturing






Electricity, gas, steam & air conditioning supply






Water supply, sewerage, waste management & remediation activities






Construction 01-AccountingorFinance(15.7%)





Wholesale & retail trade, repair of motor vehicles & motorcycles





30-RetailorMerchandising(5.1%)

Transportation & storage






Accommodation & food service activities




13-HotelorTourism(5.7%)


Information & communication

07-ComputerorInformationandTechnology(16.0%)






69

Top 5 Trainings Needed

1 2 3 4 5

Financial & insurance/takaful activities




04-AuditorTax(7.5%)


Real estate activities






Professional, scientific & technical activities


04-AuditorTax(10.1%)




Administrative & support service activities






Public administration & defence, compulsory social security






Education 10-EducationorTraining(18.4%)





Human health & social work activities

22-MedicalorHealthcare(20.0%)



26-PublicRelationsorCustomerService(7.4%)

10-EducationorTraining(5.5%)

Arts, entertainment & recreation





26-PublicRelationsorCustomerService(6.0%)

Other service activities







71

7 Recruitment and Vacancies

Theoverallprocessofrecruitment(i.e.,attracting,selectingandappointing)ofsuitablecandidatesforjobsorpositionswithinanorganisation,eitherpermanentortemporary,needstomeetthejobrequirementsandtheorganisation’sobjectives.Staffrecruitmentcan be from the openmarket or done internally within the organisation whereby acandidateisselectedtofillajobasapromotionorcareerdevelopmentopportunity.Thetaskistypicallytomatchtheattributesofthejobwiththesuitabilityofthecandidate.

This chapter discusses the employee turnover rate, views and importance that anemployerplacesinselectingcandidatesforrecruitmentorpromotionbasedonselectedattributes that are commonlyused. It alsodiscusses the vacancies and future labourrequirements.

7.1 Turnoverrate

Figure 7.1showsemployeeturnoverratein2015.Generally,theemployeeturnoverrateislow.Morethanhalf(51%)oftheestablishmentsexperiencedzeroemployeeturnoverrate.Ontheotherhand,11%oftheestablishmentshadtodealwithemployeeturnoverratesof50%andabove.

Figure7.1:EmployeeTurnoverRatesin2015

51%

7%

12%

9%

5%

4%

11%

0%

Lessthan10%

10-19%

20-29%

30-39%

40-49%

50%andabove


72

The analysis of employee turnover rate covers all sectors. According to Figure 7.2,60%oftheestablishments inhumanhealthandsocialworkandaccommodationandfood service sectors experienced zero employee turnover rate. However, 13% of theestablishmentsinaccommodationandfoodservicesectorreportedemployeeturnoverratesof50%andabove.About13%oftheestablishmentsinpublicadministrationanddefence,compulsorysocialsecuritysectorexperiencedemployeeturnoverrateof50%ormore.

Figure7.2:StaffTurnoverRatein2015bySector

50%

37%

37%

43%

44%

57%

51%

45%

60%

38%

48%

50%

50%

49%

50%

41%

60%

52%

60%

25%

0% Lessthan10% 10-19% 20-29% 30-39% 40-49% 50%andabove

51%

7% 12%

9% 5% 4% 11%

25%

25%

25%

4% 9% 8% 4% 5% 10%

7% 11%

13%

6% 3% 9%

4% 11%

10%4% 4% 8%

17%

16%

12%

4% 3% 6%

6% 13%

15%2% 13

%8% 12

%11%

4% 5% 12%

7% 15%

10%

5% 4% 9%

11%

15%

8% 4% 3% 8%

11%

17%

10%

5% 4% 6%

9% 16%

11%

10%

5% 12%

4% 7% 7% 5% 4% 13%

11%

15%

10%

6% 4% 10%

7% 11%

11%

12%

10%7% 6%

6%

4%

4%

9%

17%

13%

9% 9% 3% 7%

19%

13%

9% 5% 5%

5%

6%

14%

18%

13%

6% 4% 8%

15%

13%

13%

5% 7% 11%

15%

15%

5%8% 3% 4%Agriculture,forestry&fishing

Mining&quarrying

Manufacturing


Watersupply,sewerage,wastemanagement&...

Construction

Wholesale&retailtrade,repairofmotorvechiles&..

Transportation&storage


Information&communication


Realestateactivities

Profesional,scientific&technicalactivities


Publicadministration&defence,compulsorysocial..

Education



Otherserviceactivities

Activitiesofhouseholdasemployers;undifferentiated..

Total


73

7.2 Vacancies

The labourmarket isdynamic,flexibleandeverchanging. Vacancies inorganisationsoccur because of resignations, retirement, dismissals and promotions. It can also bedue to the formationofaneworganisation,anewdepartmentoranewunitwhereadditionalemployeesarerequired.Itcanalsobeduetochangesinworkproceduresorequipmentwhichmaycreatenewopeningsforindividualswithspecificskills.

When there is a tight labourmarket, it takes longer and is more difficult to fill thevacancies.Thereisinevitablysomedegreeofamismatchbetweensupplyanddemand.Skillsshortagesmakeitharderforcompaniestohireandthemajorityofthemwouldfind itdifficult tohirehighly-skilledand technicalworkers.On theotherhand,at thelowerendofthejobstructure,manyshyawayfromjobsthatareconsideredasdirty,dangerousanddemeaningordifficult.

This section of the report looks into the job vacancy rate and reasons behind whyvacanciesaredifficulttofillbasedoninformationcollectedfromtheNER2016survey.

7.2.1 VacancyRate

TheNER2016 results show that sales and serviceworkers categoryhas thehighestvacancyrateof9.7%(seeFigure 7.3).This is followedbyskilledagricultural, forestry,livestock&fisheryworkersandplantandmachineoperatorsandassemblerscategoriesat8.9%and8.4%respectively.Intermsofdistributionofcurrentvacancies,thehighestshareisfoundintheplant&machineoperatorsandassemblersjobcategory(24,636),followed by elementary workers (18,657) category. It appears that there are labourshortagesinspecificjobsandperhapsincertainlocations.


74

Figure7.3:DistributionofCurrentVacanciesandVacancyRatebyJobCategory,2016

7.2.2 Hard-to-fillVacancies

Hard-to-fillvacanciesaredefinedasvacanciesthathaveyettobefilledafter3monthsor longerdespite recruitmentefforts. TheNER2016 survey reported thatmore thanhalf of the vacancieshad remainunfilled (52.6%). This situation ismost acute in theotherserviceactivitiessector,whichreportedthat76.2%ofthevacanciesin2016hasremainedunfilled for 3monthsor longer. The activitiesof households as employers;undifferentiated goods-& services-producing activities of households for own useindustryreportedthat69.2%of theirvacanciesarehardtofill.The industrywiththeleastissueingettingtheirvacanciesfilledistheElectricity,Gas,Steam&AirConditioningSupply industry with only 12.7% claiming that they have hard-to-fill vacancies. (seeFigure 7.4).






Plant&Machine

Operations,&

Assemblers


Total

Vacancies Vacancyrate

2.8%

0

10

20

30

40

50

60

70

80Thou

sand

s 90

5.6%

6.6%

3.6%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

9.7%

8.9%

4.5%

8.4%

6.6%


75

Figure7.4:PercentageofVacanciesthatareHardtoFillbyIndustry,2016

Employersalsoclaimedthatvacanciesthatarehardtofillareinthecraftandrelatedtradesworkers (69.7%), elementary occupations (69.3%), skilled agricultural, forestryand fisheryworkers (62.5%) and plant&machine operators and assemblers (56.7%)categories.Figure 7.5showstheshareofhard-to-fillvacanciesagainstthetotalvacanciesreportedbyjobcategory.

Figure7.5:PercentageofHard-to-FillVacanciesbyJobCategory,2016

Managers

Professionals






Plant&MachineOperations,&Assemblers


68.7%

39.5%

54.6%

12.7%

22.6%

55.9%

50.0%

30.3%

68.7%

41.1%

16.0%

49.5%

44.9%

53.8%

22.5%

33.4%

42.3%

51.0%

76.2%

69.2%

52.6%

42.4%

40.5%

38.1%

32.0%

49.1%

62.5%

69.7%

56.7%

56.7%

52.6%

Agriculture,forestry&fishingMining&quarrying

ManufacturingElectricity,gas,steam&airconditioning...

Watersupply,sewerage,waste...Construction

Wholesale&retailtrade,repairofmotor..Transportation&storage

Accommodation&foodserviceactivitiesInformation&communication

Financial&insurance/takafulactivitiesRealestateactivities

Profesional,scientific&technicalactivitiesAdministrative&supportserviceactivities

Publicadministration&defence,..Education

Humanhealth&socialworkactivitiesArts,entertainment&recreation

OtherserviceactivitiesActivitiesofhouseholdasemployers;..

Total

Total


76

The employers also shared some of the reasons that contribute to the hard-to-fillvacancies. For managers and professionals categories, the main reason is that theapplicants do not have sufficient work experience. For the elementary occupationscategory, including Plant &Machine Operators, & Assemblers and other ElementaryOccupations,thedemandforworkersexceedthesupply.

Table7.2:ReasonsforHardtoFillVacancies

Not enough

applicants

Applicants not meeting requirement in Company not able to meet the salary/

benefits requested by

applicants

Qualification (education/ certification)

Competency or skill level

Working experience

Managers 41.9% 26.7% 52.8% 60.6% 51.0%

Professionals 41.1% 29.7% 55.1% 58.2% 50.2%

Technicians & Associate Professionals

39.8% 28.6% 60.2% 57.9% 42.3%

Clerical Support Workers 38.4% 23.9% 51.0% 52.3% 39.9%

Service and Sales Workers 51.9% 15.3% 51.9% 50.5% 39.3%

Skilled Agricultural, Forestry, Livestock & Fishery Workers

47.9% 15.1% 43.0% 39.0% 32.7%

Craft & Related Trades Workers 46.9% 18.2% 65.6% 57.0% 32.2%

Plant & Machine Operators, & Assemblers

58.3% 14.2% 50.6% 45.6% 32.2%

Elementary Occupations 59.1% 10.1% 34.5% 36.6% 33.4%


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8 Minimum Wage

8.1 Introduction

TheminimumwagepolicyinMalaysiahasbeenimplementedsinceJanuary2013,fixedatRM900amonthforthoseinPeninsularMalaysiaandRM800forthoseinSabahandSarawak.Thepolicywasreviewedin2016andtheminimumwageforPeninsularMalaysiawasrevisedtoRM1,000amonthwhiletheminimumwageforSabahandSarawakwasrevisedtoRM920.TheNER2013hadincludedadiscussionofminimumwagestoanalysetheirimpactonfirms.ThisNER2016continuestocollectdatarelatingtominimumwage.

8.2 ImplementationofMinimumWagePolicy

AsshowninFigure 8.1,76.3%oftheestablishmentssurveyedstatedthattheminimumwagepolicyhasnot resulted inan increase in labour cost for their companies,while23.7%oftheestablishmentsexperiencedincreaseinlabourcost.

Figure8.1:IncrementinLabourCostduetoMinimumWagePolicy,2016

76.3%

Yes

No

23.7%


78

8.3 ImpactsofMinimumWagePolicy

Figure 8.2 presentsthetypeofimpactsexperiencedbyemployersduetotheminimumwage policy. About 60.8% of the companies stated that their profits had decreasedsincetheimplementationofminimumwagepolicywhile36.5%oftheestablishmentsstatedthattheyreducedtheirworkforceduetothepolicy.Thereductioninprofitsandworkforceindicatethattheseestablishmentsrelyonalow-costlabourstrategy.Hence,with the implementationofminimumwages, their profitsweredirectly affectedandsomeofthemhadtoreducetheirworkforcetolowercost.

Figure8.2:Impactsofimplementationofminimumwagepolicy

60.8%Decreasedprofit

Reducedworkforce

Increasedproductivity

Increasedcompetitiveness

Reducedthebenefitsofworkers(allowancesandbonus)

Recruitedmorequalifiedworkers

Switchedtopart-timeemployees

Switchedtoforeignworkers

Indreasedoutsourcingofwork

36.5%

17.4%

18.0%

17.7%

14.2%

11.2%

7.0%

5.1%


79

Appendix – Technical Notes

SurveyMethodology

Thesurveymethodologyusedforthe2016NERsurveywasthesinglestagestratifieddesign. The sampling unit was the establishments (also known as employers). Thestratificationvariablewasemploymentsize.Ateachofthe1-digitsampledindustries,a cut-offpointwasdetermined. Establishments above the cut-offpoint constitutedastratumthatwascompletelyenumerated,i.e.,acensusstratum.Establishmentsbelowthecut-offpointweresubjectedtosamplingaccordingtothedeterminedsamplingrates.

The employee group strata are based on the classification of small and mediumenterprises(SME)asshowninTable A.1.

TableA.1:Criteriaforstratificationofsample

Sector Strata No. of Employees Approach

ManufacturingSector

Strata1 200andabove Census(FullCoverage)

Strata2 75-200 Sample

Strata3 5-74 Sample

Non-Manufacturing

Sector

Strata1 76andabove Census(FullCoverage)

Strata2 30-75 Sample

Strata3 5-29 Sample

Atotalsampleof66,950establishmentswasselected.ThedistributionofthesamplebystrataisshowninTable A.2.

TableA.2:SampleEstablishmentbyStrata

Strata No. of Sample Establishments

1 10,137

2 4,726

3 52,087

Total 66,950

Uponcompletionofthesurvey,theweightswerereadjustedforestimatingtheoverallpopulationduetonon-responsefactorssuchaschangeofaddress,notinoperation,notlocated,dormantandduplication.Theseadjustedweightswereappliedtothesampleresultstoobtaintheestimationofthetotalsattheindustrylevel.


80

ACKNOWLEDGEMENTS

ILMIAexpressesdeepappreciationforthecontributionsoftheNER2016SurveyTeam.Thehardwork,supportandcollaborationofmembersoftheteamwereindispensablein ensuring that the survey was effected successfully. In particular the tireless anddeterminedeffortsof the team in thedistributionof thequestionnaires, interactionswithrespondentsandthetimelyretrievalofthecompletedsurveyformsensuredthattheprimaryphaseofNER2016waspositivelysurpassed.TheNER2016SurveyTeamcommitteemembersincludedrepresentativesfromthe:

1. HumanResourcesDevelopmentFund

2. DepartmentofLabour,PeninsularMalaysia

3. DepartmentofLabour,Sarawak

4. DepartmentofLabour,Sabah

5. DepartmentofOccupationalSafetyandHealth

6. SocialSecurityOrganization

7. DepartmentofIndustrialRelations

ILMIAisgratefulforthecollegialcooperationandtheconstructivefeedbackreceivedfromthemembersoftheteamthroughouttheNER2016developmentprocess,aswellasinthepreparationofthereportonthefindingsofthesurvey.Welookforwardtocontinuepartnershipwiththedepartmentsandagenciesinfutureendeavours,particularlyinthenextNERsurvey.

ILMIA also extends special gratitude to the management and staff of the HumanResourcesDevelopmentFundforthefinancialsupportprovidedtoenableNER2016tobeundertaken.

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