The Malaysian Insight

MALAYSIA stands to lose more fresh ICT graduates to other countries because of a disparity in wages, said the National ICT Association of Malaysia (Pikom), a trade group representing the industry.

Pikom, which published its ICT Job Market Outlook 2019 report yesterday, said while ICT is one the fastest-growing industries in the country, there are now worries that it will not have enough workers because of the salary gap.

The disparity in salaries between entry level positions and senior staff in IT companies could put off students from studying computer science while those graduating with these skills are grabbed by employers in places, such as Singapore, Australia and the UK, which also offer higher wages, it said.

The overall gap in salaries between entry level positions, junior executives, executive, managers and senior managers has widened over the past 12 years since Pikom started its IT job market studies.

According to the 2019 report, the ratio has widened from 2.64 in 2009 to 3.01 in 2018.

“Brain drain will be an issue because of this disparity,” said Pikom head of research and publications Woon Tai Hai.

“There will always be disparity in wages between positions but if it’s high and we don’t solve this issue, there may not be a lot of parents who want their children to study computer science.

“I remember several years ago the government briefed us and revealed that our universities were producing about 60,000 grads for the IT industry. Nowadays I believe the number is half of that,” said Woon, who added that the industry is already facing an acute talent shortage.

According to Pikom’s 2019 IT job report, the average monthly salary for an entry level position is RM3,080 in 2018.

For junior executives, the average salary is RM4,458, senior executives (RM7,469), managers (RM11,888) and senior managers (RM20,521).

The average monthly salary for the lowest rung in the industry went up by 4.1% in 2018 from the previous year, while senior manager salaries grew by 7.2%.

If the industry does not deal with the problem quickly, Malaysia will continue to lose IT talents to Singapore and Australia, said Woon.

“This is an issue that goes back 10 to 15 years. Back then, graduates coming out of Australia and returning to Malaysia would only be paid RM600 a month. If they had stayed in Australia, they would have earned A$1,000,” said Woon.

Another factor fuelling the problem is that companies often have to spend extra money reskilling and retraining new graduates, said Pikom chairman Ganesh Kumar Bangah.

“Because of the fast pace of technological change, we often find that graduates have skills sets that have been rendered obsolete by the time they graduate. So companies have to spend extra resources to up-skill them.”

Although the starting pay for fresh IT grads may be low compared with their seniors, their salaries will increase in tandem with the growth of the industry, said Ganesh.

Woon echoed this sentiment, saying local firms should provide more increment and benefits between entry level and executive positions so as to woo and maintain fresh graduates.

“If you just give pay rise to entry level workers, it will create a ripple effect throughout the hierarchy and you have to increase wages at all levels. This can be disastrous for the IT ecosystem as a whole,” said Woon.

“It would be better to give decent increments, training and career support when they move up the value chain.” – May 29, 2019.