KUALA LUMPUR: The progressive wage policy (PWP) will help small and medium-sized enterprises (SMEs) retain talent and address concerns over brain drain, says economy minister Rafizi Ramli.
Speaking at a town hall here, Rafizi said the PWP aims to address the issue of employees viewing SMEs as stepping stones to larger companies by providing competitive wages and training opportunities.
“We can’t change people’s attitudes towards SMEs, but we can upgrade and change the status of SMEs.
You don’t see the same problem in economies like Germany, where SMEs are considered very strong and competitive, and they pay good wages, he said.
The PWP also aims to raise wages, achieve balanced income distribution, and reform the labour market to increase workers’ income in line with productivity gains.
The PWP pilot programme will see selected employers receiving incentives of RM200 per month per employee in entry-level jobs and up to RM300 per month per employee in non-entry-level jobs.
It currently involves five sectors: construction, manufacturing, wholesale and retail trade, repairs for cars and motorcycles, information and communication, as well as professional, scientific, and technical activities.
The economy minister previously said that for companies to receive the incentives, they must provide documentation proving that their employees have completed at least 21 hours of upskilling or training programmes.
He explained that employees who receive commensurate pay and training would be more likely to remain with their company, and in return, SMEs would benefit from increased employee retention.
“(Employees) can see that when they work in SMEs, they can create value and have a competitive career trajectory that’s on par with larger companies.
(SMEs) can’t say, ‘We want to create more value, but we don’t want to talk about salaries.’ It’s part and parcel of the overall restructuring that we have to do, he added.
Rafizi, however, said that raising wages to combat the effects of Singapore’s stronger currency would not be a sustainable way of addressing the issue of brain drain.
Instead, he argued that to win the talent war with neighbouring countries, the economy’s complexity needed to be increased, enabling companies, including SMEs, to offer more value and higher-paying jobs.
Source: https://www.freemalaysiatoday.com/category/nation/2024/08/06/progressive-wage-policy-can-help-smes-retain-talent-says-rafizi/