Talent shortage to drive wage premium to RM10.08 billion

KOTA KINABALU: A potential shortage of 94,000 highly-skilled employees by 2030 will drive total annual wage premium to RM10.08 billion, according to a salary survey.

Wage premiums are amounts employers could be forced to pay employees, over and above normal inflation increases.

Results from global organisational consulting firm Korn Ferry’s Salary Surge study found that annual wage premiums for highly-skilled talent in the finance, insurance, real estate and business services sector in Malaysia will total RM1.89 billion by 2030.

The technology, media and telecommunications sector’s total is expected to reach RM744 million and that of the manufacturing sector could reach RM540 million.

“This new normal of scarcity in abundance, plenty of people, but not enough with the skills organisations needed to compete, will be further amplified by an accelerating brain drain of talent moving to higher income economies with

This new normal of scarcity in abundance, plenty of people, but not enough with the skills organisations needed to compete, will be further amplified by an accelerating brain drain of talent moving to higher income economies with considerable talent scarcity and wage premiums. Mary Chua, Korn Ferry Malaysia Senior Client Partner

considerable talent scarcity and wage premiums,” said Korn Ferry Malaysia Senior Client Partner Mary Chua said in a statement yesterday.

She added that these higher income markets also tend to have an ageing population and there were examples of nations already proactively reviewing their immigration policies to augment talent supply in their country.

“Given the advancement of technology, the most sought-after talent may not even need to relocate to take on lucrative assignments in today’s borderless digital economy,” Chua added.

Malaysia is not alone in this region as large economies like China will see an additional wage premium bill of more than US$342 billion (US$1 = RM4.02) by 2030, and US$468 billion for Japan.

However, smaller markets like Singapore, are likely to feel the most pressure, with the nation state expected to face a wage premium equivalent of about 10 per cent of its 2017’s economy. The salary survey opined Malaysian companies must focus on engaging, re-skilling and driving employee retention.

“By 2030, the country will have a surplus of 17.3 per cent Level B (midskilled) and 28.2 per cent Level C (low-skilled) labour that can be effectively re-skilled and re-deployed to meet organisational needs,” Korn Ferry said.