Kuala Lumpur, May 26, 2015 – Despite recent global economic uncertainties including oil price volatility, companies in Malaysia are optimistic about business outlook projections for 2015 with half of the companies indicating no change, and around 40% indicating a positive outlook, according to the 2015 General Industry Pulse Survey findings released by Towers Watson (NASDAQ: TW), a leading global professional services company. This is further corroborated by companies reporting projected revenue increases ranging from 5% to 10%, thus suggesting a positive growth outlook amidst global economic uncertainties.

However, companies in Malaysia continue to experience challenges attracting and retaining the right talent. Most of the companies surveyed indicated that talent shortage was due to lack of “employable” workforce and brain drain. Worryingly, slightly more than half (52%) of the companies rated their fresh graduate’s work quality as average, and none of the companies have rated the performance of their fresh graduates as excellent. The findings also indicated that the top concerns while hiring fresh graduates are inadequate communications skills, low aptitude and in many cases, limited English competency, and all this compounded with a perceived lack of commitment.

But companies are willing to train and provide opportunities for fresh graduates and those who are going to graduate. The survey findings revealed that 63% of companies have i an internship program in place, with the median duration of three months and a median monthly base salary of RM 800 for interns.

Sulaxmi Prasad, Global Data Services Practice Leader for Towers Watson Malaysia said: “To attract and engage the right talent, companies are moving towards implementing comprehensive talent management frameworks to drive better performance, competitive rewards, employee recognition, succession planning and build an internal talent pipeline. Many organisations are also implementing flexible work arrangements to retain female employees and providing work–life balance”.

In terms of hiring approaches, there is an increasing prevalence of outsourcing recruitment process which has provided access to highly skilled individuals and significantly reduced the time to hire. Amongst the 88% of the surveyed companies that intend to hire within the next 12 months, the most prevalent hiring approaches are job advertising websites (31%) and hiring through third- party agency (25%), followed by direct hiring (20%). It is important to note that hiring via social media is gaining momentum across the globe and can be expected to increase over the next few years.

For 2015’s general salary increase by employee category (as % of base salary), the survey result indicated that employees in the professional / supervisory category are set to receive the highest rise in pay (5.9%), followed by those in the technical / business support category at 5.8% and the rest at an average of 5.7% pay rise.

Attrition rate in Malaysia is still high with an average of 14.5% attrition for non-sales employees in general and 15.1% for sales staff across all employee categories. According to the survey results, better career opportunities (30%) and better pay opportunities (30%) are the most popular causes of attrition.

“It is unsurprising that better career opportunities and career development is a priority for employees in Malaysia where growth prospects are brighter. These employees feel that there is a need to move to a new position in another company to command a pay raise. As the working population expands, many young employees are demonstrating a strong desire to build a successful career in line with their aspirations to achieve a better quality of life. Employers should also recognise that while pay is still an important element in the equation, the key is to be able to design a comprehensive employee value proposition that balances different drivers and motivators of performance. Besides it is also important to have good managers who can engage, motivate and retain key talent in the company.” said Sulaxmi Prasad.

About the survey

The 2015 General Industry Pulse Survey for Malaysia tracks opinions of business and HR leaders on the business outlook of Malaysia and current HR trends and challenges in Malaysia. Over 80 companies participated in this survey which was fielded from February to March 2015.

About Towers Watson

Towers Watson (NASDAQ: TW) is a leading global professional services company that helps organisations improve performance through effective people, risk and financial management. With 15,000 associates around the world, the company offers consulting, technology and solutions in the areas of benefits, talent management, rewards, and risk and capital management. Learn more at towerswatson.com.