20% of employers are unlikely to give out increments to their employees this year. <small> Cover image via Business Insider Berita Harian </small>
With the latest political development in Malaysia, our economy has been affected
Following Tun Dr Mahathir Mohamad's resignation as Prime Minister on 24 February, Malaysia's stock market dropped by 2.69%, the lowest since April 2018.
Prior to the political manoeuvre, Malaysia’s economic growth had already showed signs of slowdown due to the coronavirus (COVID-19) outbreak. Now with the recent change of government, economists are still waiting to see how our economy and job market will be affected in the long run.
While a majority of working Malaysians are expecting a pay raise this year, up to 20% of employers are unlikely to give out increments to their employees
A survey by recruitment firm Hays Asia discovered that while 76% of Malaysians are hopeful of getting a raise of 3% and above, not all employers will be that generous. In fact, the likelihood of companies not giving increments to their employees has more than tripled from 6% in 2017 to 20% this year.<br></br></p>
With that, we took a look at recent economic trends in Malaysia, and how they’re affecting our jobs. Here’s what you should know:
1. Technology and digital economy is set to drive Malaysia’s economy
Earlier this year, the government launched e-Tunai Rakyat in a bid to push for cashless transactions. Just a week after the campaign launch, over 3.5 million Malaysians had signed up and spent RM105 million using their e-wallet stimulus.
This year, we are also expecting the arrival of 5G in Malaysia, which would pave the way for faster Internet and smart technology. All in all, the digital economy is expected to make up 20% of our country’s economy this year.
Key Takeaway: Be willing to embrace e-payments and new tech in 2020, and look forward to more job openings in the digital industry.
2. COVID-19 has taken a toll on tourism, but should have a limited impact on GDP growth
Due to the coronavirus (COVID-19) outbreak, many foreign tourists have postponed their holidays indefinitely. In Melaka, thousands of hotel bookings and tourism subscriptions were cancelled by Chinese tourists, who make up 11% of Malaysia's annual visitors. Resort World Genting also cancelled all tour bookings from China in February.
Airlines, hotels, and physical retail sectors would be affected the most, but RHB Research projects the economic impact of COVID-19 to be limited in the long-run.
Key Takeaway: Now is the best time for Malaysians to travel locally for holidays, as prices for air flights and hotels are lower.
3. Brands are placing an emphasis on becoming green and sustainable
Since July 2019, F&B outlets in Selangor have stopped providing plastic straws at the counter. Most of them have opted for paper straws or gone completely strawless. Tealive, for instance, recently introduced Malaysia's first strawless reusable bubble tea cup, which has an inner compartment for toppings.
There has also been an increased push for sustainable energy like solar energy, with more companies adopting green technology. This trend will become even more apparent as consumers and employees lean in favour towards sustainable brands.
Key Takeaway: Businesses should take small steps to promote sustainability at work.
4. There is a growing mismatch between jobs and workers
In recent years, many companies have been forced to downsize due to budget cuts, automation, change in markets, and other external factors. On top of that, many graduates are entering a workforce that just doesn't have enough jobs to accommodate them.
According to a report by Bank Negara Malaysia, an average of 173,457 diploma and degree graduates enter the workforce annually, but only 98,514 high-skilled jobs are created at the same period of time.
Key Takeaways: For Malaysians to equip themselves with skillsets that are on-demand in the workplace.
5. This, in turn, has pushed people to take up second jobs, mostly in the gig economy
To help make ends meet, Malaysians have opted to take up freelance gigs or even multiple side jobs. In fact, almost 4 in 10 Malaysians plan to leave their full-time jobs to join the gig economy, which includes becoming a freelance worker, independent contractor, or online platform worker like an e-hailing driver.
That’s why companies are intentionally taking measures to protect gig workers. E-hailing service Grab recently introduced their Personal Accident Plus insurance. EPF, on the other hand, encourages gig workers and self-employed Malaysians to save with i-Saraan, which offers high annual dividends and 15% government contribution of up to RM250 each year.
Key Takeaways: Expect more and more Malaysians to embrace the gig economy.
Previously, Dr Mahathir was supposed to announce an economic stimulus package on 27 February 2020 to mitigate the impact of the COVID-19 outbreak
However, with the recent political uncertainty, the announcement will likely be pushed to a later date. So far, Bank Negara Malaysia has played its role by cutting the interest rate in January, with another possible round of overnight policy rate cut in March or May.<br></br>
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