EVEN though many companies barely survived the economic ravages of Covid-19, a recent survey showed that 90% of Malaysia’s small and medium enterprises (SMEs) could still afford to pay their workers a bonus or at least an ang pow for Chinese New Year.

Manufacturers of pharmaceuticals, medical equipment and personal protective equipment (PPE) could reward their workers with at least two months’ pay after a year of roaring business.

On the other hand, employers in the hardest-hit industries like tourism and entertainment would find it hard to cough up the money.

Associated Chinese Chambers of Commerce and Industry of Malaysia SMEs committee chairman Koong Lin Loong said a survey showed 70% of small and medium companies still faced cash flow problems and companies with a large workforce tended to find it more difficult to pay bonuses.

He said the pandemic has had a far more severe impact on economies than the 1998 Asian financial crisis and the 2009 global financial meltdown.

Even though the pandemic broke out in 2020, companies paid workers bonuses at the end of the year after doing well the year before.

Koong said the companies felt the crunch in 2021

“Companies that were unable to pay a bonus to their employees were giving other forms of financial reward to recognise performance.

“In 2020 many companies thought that the epidemic would be over by 2021 but it dragged on for another 22 months.”

Malaysian Employees Federation (MEF) president Syed Hussain Syed Husman said a salary survey in 2021 forecasted that senior executives of profit-making companies could get a bonus of 1.82 months while the quantum for non-executives was 1.66 months.

Syed Hussain said the main concerns for employers this year were sustaining their business and staying agile and responsive to the uncertainty arising from new coronavirus variants and floods.

He said this was especially true for micro SMEs that were still struggling to recover.

“Employers will incur a lot of costs to restoring businesses that suffered during the lockdowns and were also affected by the floods.”

He said to keep their business afloat, employers must negotiate with financial institutions to defer loan repayments.

SME Association of Malaysia president Ding Hong Sing said member companies that were not badly affected by the enforced shutdowns or reduced working hours could afford to reward their employees.

“Some businesses that were allowed to operate, like the food retail sector, could consider paying employees a bonus of two to three months of their pay.

He said SMEs were generally greatly affected by the pandemic and saw profits dropping as much as 40%.

“They face problems hiring workers. They could not bring in foreign workers. Local workers are expensive because they demand higher salaries than foreign workers.”

As for the micro SMEs, Ding said 90% of them had no money to pay their workers anything extra.

Federation of Malaysian Manufacturers president Soh Thian Lai said despite the many health rules the factories had now to comply with, they could still afford to pay bonuses.

Soh said an FMM-Malaysia Economic Research Institute survey showed that the bonuses could receive range from half a month to one and a half months’ pay.

Profitable sector

Another sector that made money during the pandemic and therefore hand bonuses to their workers is the cargo and freight shipping sector.

Global cargo transport has been busy in past two years.

Shipping Association Malaysia (SAM) president Ooi Lean Hin, told The Malaysian Insight that workers in the freight sector could get as much as a two-month bonus.

He said the amount varied from one company to another depending on their performance.

Selangor Freight Forwarders and Logistics Association president Tony Chia Han Teun agreed the logistics sector had performed well during the pandemic and he expected companies would reward their workers with at least a month’s pay.

Prior to the pandemic, the standard bonus was one and a half months, he said.

He said the bonus could be lower as freight forwarders in the last two years have also grappled with container shortages, high shipping costs and port congestion. – January 15, 2022.