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Salaries aren’t enough to draw talent back

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Not only are starting salaries in Malaysia around S$1,700 less (RM4,250) than their counterparts in Singapore, it also takes a total of 3.8 Malaysians to complete the same task one Singaporean employee can do.

When it comes to both salary and productivity, Malaysia – despite being on its way to becoming a high-income economy – remains behind places like Singapore and Hong Kong in terms of its ability to encourage overseas talent home.

Melissa Norman, managing director of Kelly Services, told The Star that salaries in the mid-tier management in Malaysia are about 10% to 30% lower than their APAC counterparts.

When it comes to C-suite executives, the difference in overseas salaries could be double that of Malaysia’s.

Norman said fresh graduates in Singapore can command a starting salary of around S$2,500 (RM6,250), while Malaysian graduates are “still hovering between RM1,800 (S$721) and RM2,000”.

The reason for the difference, she says, is the quality of the students. Singaporean students come from “cream of the crop” universities and, while Malaysia also produces top graduates, many are snapped up by big firms and MNC’s before they graduate. This leaves a pool of students with fewer skills, who go overseas and find it difficult to return.

Shamsuddin Bardan, executive director of the Malaysian Employers Federation (MEF), also told The Star that when it comes to salaries, productivity also has to be considered.

“According to the MPC’s (Malaysia Productivity Corporation) 2012 report, Malaysia’s productivity is 3.8 times lower than Singapore’s productivity,” he said.

“In simple terms, what takes one employee to do in Singapore, takes 3.8 employees here to accomplish the same task.”

According to the report, Malaysia’s employee productivity value stands at US$14,217 (S$17,400; RM43,600), lower than Hong Kong at US$65,174 (S$80,000; RM200,000) and Singapore at US$55,702 (S$68,300; RM171,000).

“To look at wages on its own… would not be fair. Sure, Malaysia is moving towards a high-income economy, but if the wages go up and productivity remains the same, it would be a recipe for disaster,” Shamsuddin said.

To entice talent back to Malaysia, Norman said the top three factors are total package (salary and compensation and benefits), the type of role the talent will come back to in Malaysia and the policies that are involved.

She adds that in attempting to attract talent back, the “rewards and the opportunities must be fairly presented so there’s a nudge for people to make that move”.

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