EMPLOYEES have been warned: bonuses and increments this year won’t be up to expectations because of the weak economy.

The warning came from employers’ associations, which told The Malaysian Insight that since the economy is sluggish, bonuses for 2018 are expected to be lower. 

The average should be about half to one month.

“The only companies that may pay two months’ bonus are those in the export business that have benefited from the weaker ringgit,” said SME Malaysia president Michael Kang.

Most of the small- and medium-sized companies have experienced a decline in performance last year, he said.

“Some of their annual results have fallen by 20%-30%. But even if the economy worsens, an average company will still pay half to one-month bonus ahead of the Chinese New Year next month,” said Kang.

Employees, however, can expect to get around 5% in salary increments, he said.

“The average wage increase was 10% last year. It would be good if a company can raise wages by between 3%-5%. 

“Industries, such as construction, are slow as some contractors have even asked their employees to take pay cuts.”

Federation of Malaysian Chinese Guild Association president Lum Kim Soong said the outlook on wages and salary hikes is still positive.

The economy in the first half of 2018 was still good although it suffered a dip after the change in government. 

“Most industries should still be able to pay a bonus although it will be lower than the previous year,” said Lum.

The salary hike, however, is not expected to exceed 10%, said Lum.

The Malaysian Employers’ Federation also predicts that executive salaries and wage hikes will be lower in 2019, although non-executive wages will increase slightly.

In its Report on Salary Survey of Executive and Non-Executives 2018, MEF said executives are expected to receive an average of 2.14 months of bonuses in 2018, 0.05% higher than the previous year.

Non-executive staff can expect 2.02 months of bonus compared with 1.81 in 2017.

The survey said the average executive pay will increase by 4.86% in 2019, slightly lower than the 4.88% received the previous year.

Non-executive wage increase in 2019 is expected to be around 4.89% compared with 4.88% the previous year. – January 10, 2019.