The global advisory, broking and solutions company stated in its compensations survey that although the projected salary increase for this year was slightly lower than the 5.6% in 2023, the average salary increase continued to rise steadily in the last few years.
Similar trends are observed across various industries in the country this year, WTW said.
It added that Inflationary pressures and concerns over a tight labour market continue to be influencing factors.
“Although inflation is slowing down from the heights of recent years, Malaysia’s labour market is shifting,” said WTW head of work and rewards for Southeast Asia and Malaysia Tan Juan Jim.
Voluntary turnover and attrition reached a high of 18.5% in 2023 versus 16.5% in 2022 and the trend looks set to continue in 2024, he said.
Tan added that employers in Malaysia will continue to face significant talent challenges including the attraction and retention of key talents.
They will need to balance the entire rewards package, both monetary and non-monetary, to remain competitive and aligned with employees’ needs and wants, he said.
The WTW survey discovered that millennials and Gen Z will form more than 70% of the workforce by 2025.
Industries such as banking, insurance, tech, media and gaming, as well as shared services and outsourcing, hired the most millennials and Gen Z last year.
It noted that the Gen Z workforce in Malaysia grew 50% year-on-year as a percentage of the total workforce since 2020.
It has been projected that millennials and Gen Z will form more than 70% of the workforce by 2025.
Tan said employees have options in the gig and passion economy, which is built around creators with a purpose and which provides alternative ways of making money.
“Job security is no longer the primary focus, but understanding the emerging group of Gen Z employees becomes paramount.
“Organisations that provide greater work flexibility, including a choice of remote, onsite, or hybrid working, will attract and retain more talent,” it added.
It said that this trend of working offers Gen Z more options to have multiple side hustles while maintaining their traditional economy jobs.
More than 600 companies participated in the Malaysia total compensation survey conducted in October 2023.