Smaller increments for many. So, bad for everybody?

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It’s year end again. Increments coming soon. Bonuses too. Are you getting one from your boss? Question. When over 90 percent of employers are giving increments, is this considered bad news or good news? As someone who has worked for the past 20 years, there were a few years where I received no increments and a few where there were no bonuses or the bonus was just a small token. What about a bonus of 2 months then? If you were to ask me, when over 90 percent of all employers are giving increments and the bonus is 2 months, it’s definitely good news. Imagine a company suffering from losses, would it provide increments and bonuses?

This was an article in TheEdgeMarkets.com about the Malaysian Employers Federation’s (MEF) Salary Surveys for Executives and Non-Executives. The article says that the forecast is a ‘BLEAK’ one. Then, it went on to quote MEF president Tan Sri Azman Shah Haron as saying that 92.4% of the respondents granted salary increases to executives compared with 94.3% in 2017, while it was 92.7% for non-executives (2017 — 94.6%). “The overall average forecast salary increase for executives in 2019 is 4.86% compared with 4.88% in 2018, while it is 4.89% in 2019 (4.88% — 2018) for non-executives.

78.2% of the respondent companies will grant bonus to all executives as compared to 77.7% in 2017, and for non-executives it is 78.7% compared to 76.9% in 2017.” The average forecast bonus for 2019 also dipped for executives at 2.06 months compared with 2.18 months in 2018 but the bonus for non-executive increased to 1.97 months compared with 1.95 months of actual bonus in 2018. Three reasons for this would be due to the global economic slowdown, increasing social costs and political uncertainties following 14th general election were among factors influencing the employers’ cautious attitude.Article in TheEdgeMarkets.com here for reference. 

Okay, if you are getting a 5 percent increment, that means you are above most of everyone in Malaysia. Anyone getting a bonus of 2.5 months is also above most of everyone in Malaysia. Remember to spend these ‘extra’ money wisely yeah. If the economy is really not doing well as per what the article implied, then more savings would be better than lesser savings. Don’t save everything inside Fixed Deposits yeah. Read a bit more about the potential opportunities in the property market or even the share market. This may just be a good time to enter after 5 years of slowdown in transactions for the property market and many undervalued stocks in the BURSA. Happy taking action!

written on 2 Dec 2018

Next suggested article:  2018: Average increment is 5-6 percent. 

 

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