KUALA LUMPUR: The implementation of the Progressive Wage Policy (DGP) is expected to assist micro, small and medium enterprises (MSMEs) in addressing the challenge of retaining talented employees by enabling companies to offer ‘decent’ wages.
Social Security Organisation (PERKESO) Head of the Employment Insurance System, Azirruan Arifin, said MSMEs currently face difficulties in retaining employees due to their inability to offer high salaries, particularly for graduates.
“Typically, new graduates start working with MSMEs to gain skills and then move on to larger companies because MSMEs cannot compete on salary levels.
“This policy is being implemented to help the government assist MSMEs in retaining talent with decent wages,” he said during the ‘Malaysia Petang Ini’ programme on Bernama TV today.
Azirruan said this is achieved through government incentives for employers participating in the DGP for 12 months, which offer RM200 per month for new employees and RM300 per month for employees who have been with the company for over a year.
For both categories, he said employers must follow the provided starting salary guidelines and offer salary increments based on the established guidelines.
He said the DGP also ensures that salary increases are aligned with improvements in an employee’s skills and productivity.
“What is happening in the active labour market in Malaysia is that salary increases do not reflect improvements in productivity and skills. This is something we need to change.
“That’s why under the DGP, there is a requirement for MSME employers to ensure that employees receive at least 21 hours of training per year before incentives are paid,” he said.
A total of RM50 million has been allocated for the pilot project of the DGP, which began in June. This includes incentive payments to 1,000 employers, with payments expected to start in October once employers submit claims that meet the stipulated conditions.
