Pikom’s Malaysian Economic and Digital Job Market Outlook Shows Meagre Growth in 2021, better outlook in 2022
National IT Association of Malaysia’s (Pikom) and Digital Job Market Outlook
- Acceleration in digital adoption via impetus from MyDigital & 5G deployment
- Jobstreet sees greater future need for ‘digital first’ skills & expertise in market
National IT Association of Malaysia’s (Pikom) key research publication this year is renamed “Economic and Digital Job Market Outlook” focusing towards an analysis of the economy, offering a critical review of the digital economy, annual local salary trends for 2021 & 2022, and a regional salary outlook.
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Pikom’s Malaysian Economic & Digital Job Market Outlook: Meagre Growth in 2021 but Better Outlook in 2022
At the launch of report today, Pikom Chairman Danny Lee said, “This year’s publication is all the more poignant and has multiple insights for readers, not only on local digital job salary trends but are also benchmarked against eleven economies.”
“The important report provides valuable information for our members and industry at large. Such information offers a critical guide to challenges and opportunities for digital industry players, planners and policy makers in government as we transform to the next stage of the new normal.”
The report, presented by Research Chair Woon Tai Hai, revealed that there are aspects of the market that have grown leaps and bounds e.g. eCommerce, online connectivity infrastructure, digital adoption, digital payment platforms, and certainly in digitalisation of certain services oriented sectors.
“The use of ‘transformation’ for some is perhaps obsolete and instead ‘acceleration’ is more appropriate. Whilst the digital economic contribution to the national economy may have reached the 20% target, set from many years ago, we are of the opinion that this digital journey may be further accelerated and will potentially ‘reshape’ the landscape of the digital industry. Also, MyDigital Blueprint and 5G deployment initiatives will be another set of impetus in driving the industry further,” says Woon.
Pikom has forecasted a GDP growth for 2021 and 2022, albeit a lower growth of 2% to 2.5% for 2021 and a 4.5% to 5% for 2022. It has also reported its outlook on fiscal debt, currency, inflation, interest rates, unemployment rate and commodity prices including the impact to the overall economy.
In terms of salaries, based on data from JobStreet and analysis and estimates by Pikom, there is a clear downward growth trend as early as 2019 to 2020 for the local salary outlook. Salary growth in 2020 was on average 2.2% and the forecast for 2021 is only 0.1% and for 2022 at 2.0% as a direct impact of the pandemic including MCO periods, economic uncertainties and job losses.
In spite of that, the number of jobs advertised remained high, reaching 135,451 in 2020 and 97,909 in 2021 (up to June), according to JobStreet, Malaysia’s leading employment platform and Pikom’s strategic partner in the publication.
JobStreet managing director Vic Sithasanan advised employees to continuously upskill and reskill in order to stay relevant. “JobStreet foresees that percentages for ‘digital first’ skills and expertise would increase even more due to rising demand for digital tools and processes. Hence, there is an urgent need for people to upskill themselves with knowledge of digital technologies coupled with digital literacy and transferable skills,” he said.
On the regional and global front comparing Malaysian technology salaries with our peers, Malaysia continues to slide with Thailand with a multiple of 1.21 times, Singapore of 1.98 times and USA of 2.10 times. These figures have been adjusted for purchasing power parity (PPP).
Apart from MDEC and JobStreet, other partners of the report included AngkasaX, Glocomp, Fusionex, Firmus, Dell, TrendMicro, VSTECS, BDO, Powerware Systems, LGMS, Hitachi Sunway and EKTECH.
The digital industry has offered 97,909 jobs in the first half of 2021 (1H21) and the number is expected to increase until the end of this year, according to the National Tech Association of Malaysia (Pikom).
The association noted that the number of jobs in the digital industry remained high, where the listings on JobStreet platform reached 135,451 in 2020.
JobStreet MD Vic Sithasanan said employees should continuously upskill and reskill to stay relevant in current circumstances.
“Our platform foresees that percentages for ‘digital first’ skills and expertise would increase even more due to rising demand for digital tools and processes.
“Hence, there is an urgent need for people to upskill themselves with knowledge of digital technologies coupled with digital literacy and transferable skills,” he said at the launch of the Economic and Digital Job Market Report (Malaysia) 2021 by Pikom and JobStreet yesterday.
However, the report by Pikom revealed that the salary forecast for the digital industry would only grow 0.1% this year and 2% for 2022 as a direct impact of the pandemic including the Movement Control Order, economic uncertainties and job losses.
It has predicted a downward trajectory for the growth of the domestic information communication technology (ICT) and digital industry as a whole.
The report also emphasised that the digital industry as well as those companies providing ICT and digital products and services have been greatly impacted by the global pandemic.
“The salaries for entry level and junior executive positions in the IT industry have been on a slight upward trajectory of 2% predicted for 2021. Meanwhile, there’s only a 0.2% increase in salaries for senior positions.
“There is also an issue of an oversupply of talent in the local job market, with many university graduates working in the ICT and digital space.
“This could cause brain drain as those with the relevant skills prefer to work and settle overseas where the demand for their skills is greater and the salary offered is higher,” it said.
It added that the internal brain drain could cause a shortage of talent and a halt in innovation for local ICT and digital companies, resulting in a loss in competitiveness as these companies will no longer be able to meet market demands.
Meanwhile, the report also highlighted regional comparisons of the digital industry with other countries.
Malaysia is ranked seventh in the purchasing power parity ranking, which compares the salaries of digital and ICT professionals in Malaysia with those of other countries.
Thailand surpassed Malaysia in this ranking, which means the average salaries of ICT professionals working in Thailand are higher than those working in Malaysia.
Other Asean countries such as Vietnam, Indonesia and the Philippines are also following closely behind in this ranking.
On the bright side, the cybersecurity sector in Malaysia has not been affected much by the pandemic and has been growing steadily with many demands for talents and professionals in this area.
Pikom has advised workers in the ICT and digital sectors to keep their skills up to date as these are essential in ensuring employability and can help with re-employment when necessary.
Nevertheless, it noted that the digital industry growth would still largely depend on the improvement in the 2H21, especially in terms of the pandemic, economic recovery, as well as other non-economic factors.
Salaries for workers in digital technology industries saw nearly no growth this year but are expected to improve in 2022, a new report has said.
Published by the National Tech Association of Malaysia (Pikom), the Digital Job Market Outlook in Malaysia Report 2021 assessed the opportunities and average compensation for the sector.
It found that the digital economy was not spared the effects of the Covid-19 pandemic, despite the restrictions pushing greater adoption of technology.
Based on the current trend for the year, the group expected average salary growth this year to be just 0.1% to RM9,835 a month, continuing a downward growth trend that began in 2017 when wages grew by 5%.
Presenting the report, Pikom’s research chairman Woon Tai Hai noted that not all was lost as they forecast salaries to grow by 2% next year to RM10,034 a month.
It observed that opportunities in the digital sector had been relatively plentiful despite the pandemic, showing there was still demand in the industry for talent, particularly in the entry-level and middle-management roles.
Compared to other countries, Woon noted that the average salary in Thailand for digital jobs surpassed Malaysia for the first time, coming in 17% higher when adjusted for relative purchasing power.
This was an important trend to monitor, he said, as compensation was typically a strong motivating factor for workers moving abroad and contributing to the brain drain in the country.
The report found that Singapore remained the top country in the region for pay in digital jobs, with the average salary nearly double (or 98% higher) than in Malaysia.
In reference to the 12th Malaysia Plan’s target for the digital economy to account for 25.5% of the country’s gross domestic product (GDP) by 2025, Woon said this was possible judging by the industry’s current trajectory.
With the statistics department’s most recent data estimate that the sector contributed 19.1% to GDP in 2019, Pikom’s projections expect this to be closer to 22.4% this year and reach 23.4% in 2022.
He said acceleration towards the plan’s target would likely be driven by the continued growth of e-commerce, trade of electrical products and greater adoption of technology and automation in the manufacturing sector.