PETALING JAYA: It is not realistic to expect a uniform starting salary for all graduates, according to the Malaysian Employers Federation. The federation’s president, Syed Hussain Syed Husman, highlighted that higher salaries are typically offered in sectors with high demand, such as technology, engineering, finance, and healthcare. In contrast, labor-intensive industries and smaller businesses often operate within tighter financial constraints.
Syed Hussain emphasized that starting salaries for fresh graduates cannot be simplified to a single benchmark like the RM1,700 minimum wage. He pointed out that employers consider various factors when determining compensation. Graduates who can demonstrate job readiness and the ability to contribute quickly are more likely to receive higher pay.
This statement came in response to comments made by the human resources minister, Steven Sim, who clarified that the RM1,700 minimum wage is intended for basic, low-skilled roles and not as a starting salary for new graduates.
Syed Hussain argued that wages should be tied to productivity, skills, and value creation. He added that the salary structure for graduates should reflect the complexity of the job, the required competencies, the conditions of the sector, and the financial stability of the employer.
“Fresh graduates are not hired based on minimum wage considerations, but rather on their expected productivity levels and the cost associated with preparing them for the role,” he said. He also mentioned that employers face challenges such as rising compliance costs, operating expenses, and thin profit margins.
Yeah Kim Leng, an economist from Sunway University, noted that an oversupply of graduates in certain fields, combined with low productivity and reliance on low-skilled foreign labor, continues to suppress wages. Many companies find it difficult to increase salaries beyond the statutory minimum.
“The minimum wage sets the baseline, and when there are more job seekers than available positions, employers gain stronger bargaining power to hire employees who are less demanding in terms of wages,” Yeah explained.
He identified several factors contributing to stagnant wage growth, including low-value activities in global supply chains, mismatches between workers’ skills and job requirements, heavy reliance on low-skilled foreign workers, and the prevalence of small and medium enterprises (SMEs) that operate on narrow profit margins.
“Low wages, coupled with rising living costs, prevent workers from focusing on improving their skills, creating a cycle that hinders progress,” he said.