Salary disclosure proposal gets the thumbs down

 

Employers are concerned that disclosing the salary offered in job advertisements could violate confidentiality requirements.

PETALING JAYA: Employers and a business group have poured cold water on a proposal for mandatory disclosure of salaries in job advertisements, saying it is “not fit for implementation”.

The Malaysian International Chamber of Commerce and Industry (MICCI) expressed concerns that the proposal would “stiffen the market”, and therefore, hamper free competition.

“It must be understood that such a policy would mean that wages become inflexible rather than being market driven,” MICCI president Christina Tee told FMT Business.

Recently, Berita Harian quoted Putra Business School’s MBA programme director Ahmed Razman Abdul Latiff as saying that public and private sector employers should be required to disclose salary rates of jobs on offer to counter exploitation of graduates joining the job market.

Ahmed was responding to concerns raised recently by economy minister Rafizi Ramli over the depreciating starting salary for new graduates, which has dropped to as low as RM1,500 a month, almost equivalent to that for unskilled workers.

Tee said a mandatory disclosure of salaries offered may lead to potential employees only focusing on highest-paying jobs and overlooking those that are a better fit.

Additionally, it would give rise to wage inflation if companies constantly try to outbid each other in competition for talent, she said.

Tee said it is essential to strike a balance between wage transparency and safeguarding the interests of employers.

“Disclosing a salary range, rather than a fixed number, seems to be a middle ground that provides clarity while retaining flexibility for negotiations,” she said.

Malaysian Employers Federation (MEF) president Syed Hussain Syed Husman ruled out the proposal, citing privacy concerns over employers’ confidential data.

“We generally support equitable salaries for all graduates of different levels. However, we’re of the opinion that it is inappropriate for employers to disclose the salary range offered because matters pertaining to salaries are confidential,” he said.

He said the responsibility for remunerating employees solely lies with employers and is dependent on an organisation’s culture.

“Our position is to do what is in line with the culture of respective organisations, as long as their compensation plans are in line with the qualification of the employees,” he said.

Samirul Ariff Othman, former senior researcher at the Malaysian Institute of Economic Research, said such a policy needs careful consideration by the relevant parties before it is put in place.

“As a tripartite matter, this requires employers, employees and the government to agree on what can be implemented, keeping in mind that businesses are not charities,” he said. - FMT