ACCCIM Survey Reports

ACCCIM 2013 SME Survey Report


A. General

1. The Minimum Wages originally scheduled to come into effect from 1st January 2013.  However Minister of Human Resources subsequently announced to defer the implementation on foreign workers for SMEs due to objection from the business community.  This survey also emphasises on the impact and any action taken by our SMEs who have duly implemented and complied with Minimum Wages.

2. The Survey highlighted the awareness of the SMEs on Minimum Retirement Age Act which took effect from 1st July 2013 with its possible impact on human resource management.

3. In view of the importance of human resource towards development of enterprises and national economic transformation, this survey also gathers information on other human resource issues such as staff training and Human Resource Development Fund (HRDF).

4. The Survey was conducted during the period of 21st June 2013 to 30th July 2013.  Estimated 2,000 questionnaires have been disseminated with 772 returns received.  Response rate is 38.6%.  The survey was conducted mainly through ACCCIM’s 17 constituent chambers and participated by selected trade associations.  Hence the respondents comprise of different industrial sectors from different regions of the country.

5. More than half of the respondents (53%) stated that the number of their full time employees is between 5 to 50 persons.  The said entities shall be classified as “Small Enterprises” in accordance with the new definition of SMEs which will be effective 1st January 2014.

6. Survey findings show the correlation amongst SMEs’ numbers of full time employees, its years of operation and annual turnover; SME’s annual turnover has shown a direct correlation with its numbers of employees! That is higher turnover with its higher numbers of employees. This may conclude that SMEs are still in the era of labour intensive and lacking behind on the adoption of ICT.   The above labour intensive practice is easily identified in two sectors, namely Manufacturing and Hotel operation. Therefore hiring and its human resource management could be an uphill task for these two sectors.

B. Minimum Wages

7. Out of 772 respondents, 15% applied for the deferment; however the approval is only 1/3.  Nevertheless, up to 73% of the respondents did not submit their application for deferment to implement Minimum Wages.

8. The most applications are from Perak (28%), Terengganu (25%) and Sarawak (23%).  However, the approval rate from these states recorded below 8%.

9. Based on the analysis by industries, most applications are from Manufacturers, 34% of them applied for deferment (9% approved, 25% rejected), followed by Hotels (25%), but the whole were rejected.  Professionals and ICT were the two industries with the least application of deferment; we are of the view that these two sectors are having their salaries well above the minimum wages.

10. More than two third (78%) of the respondents have implemented Minimum Wages.  In regard to the industry sectoring, Constructions & Contractors (72%), Professionals (71%) and ICT (71%) have fully implemented Minimum Wages (for both local & foreign workers).

11. The survey revealed that as high as 69% of the respondents indicated that they experienced the increase in their operation cost due to implementation of Minimum Wages.  1/5 of the respondents said that the increments of operation cost are more than 25%.  The 4 most affected industries are Manufacturers, Restaurants, Hotels and Agriculture, Timber, Fishery, Farming & Gardening.  ICT is the industry having least impact, 57% of them do not face any impact of Minimum Wages on their cost of operation.

12. Survey found that almost half of the respondents (42%) did not take any action to mitigate the impact of Minimum Wages.  This shows that our SMEs are rather passive and always with the attitude of “wait and see” whenever encountering external issues and threats.

C. Extension of Retirement Age to 60 years old

13. Majority of the respondents (76%) aware that the Minimum Retirement Age Act of 60 years old has came into effect from 1st July 2013. From Geographical point of view, surprisingly it was reported that most of the respondents who do not aware of the Act were from those states with more advance in information and communication such as Johor (34%), Kuala Lumpur (31%) and Penang (30%).  By contrast, only 4% of respondents from Kedah, 5% from Kelantan and 7% from Sabah did not aware of it.

14. As high as 77% of the respondents stated that the percentage of employees above 50 years old in their companies is below 10%.

15. Half of the respondents (50%) stated that the Act has no impact on them.

D. Staff Training

16. There’s still lack of emphasis by Malaysian SMEs on staff training.  Only 20% of the respondents are providing trainings on regular basis, another 42% on irregular basis.  Should we compare this with ACCCIM SME Survey Result in 2012, there was a reduction of 14% in training provided by employers.

17. Most employers providing regular trainings were from Logistics (37%), Professionals (35%) and ICT (34%).  In contrast, Agriculture, Timber, Fishery, Farming and Gardening are industry that put least emphasis and effort on their staff trainings, only 25% were providing irregular trainings and none of them conduct training on regular basis.

18. The survey also revealed that most respondents are conducting training for their Managerial and Supervisory Personnel (37%).  We also note from Survey that SMEs put least attention on R&D with only 8% of R&D personnel received training.

E. Human Resource Development Fund (HRDF)

19. Only 19% of the respondents are contributing to HRDF monthly, almost half of them (46%) are Manufacturers.

20. Amongst those contributing to HRDF, 20% of them do not utilise the fund to conduct training.   41% of the respondents voice that they are not aware of the forfeiture policy of HRDF should the funds are not utilised and dormant for 5 years.

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