Small firms will suffer if forced to reveal salaries, say business groups

A trade association and employers federation have warned that making salary offers compulsory could harm small and medium enterprises (SMEs) in Malaysia. William Ng, president of the Small and Medium Enterprises Association (Samenta), argues that such a requirement would stifle jobseekers and enable larger firms to poach talent.

SMEs, he claims, operate on flexible pay structures based on individual skills rather than rigid grade systems, making a one-size-fits-all disclosure policy impractical. William Ng warns that compulsory public salary disclosures would give larger companies with deeper pockets an advantage, allowing them to outbid SMEs for trained staff by 10% to 20%.

SMEs already bear the burden of training fresh graduates and junior staff, and exposing pay bands without corresponding productivity gains could accelerate talent drain. Malaysian Employers Federation president Syed Hussain Syed Husman supports wage transparency but warns that a compulsory regime would impose significant compliance costs on micro, small, and medium enterprises, many of which lack the resources of larger firms.

He suggests a phased, voluntary rollout starting with larger employers and proposes clear guidelines and exemptions for smaller businesses if a compulsory framework is eventually introduced. Syed Hussain cautions that disclosure without safeguards could lead to aggressive headhunting, wage inflation, and workplace tension from salary comparisons.

He emphasizes that transparency should build trust, not undermine it. The government's objective is to provide employees with better information about the market value of their skills while preserving legitimate salary confidentiality. Economy Minister Akmal Nasir has stated that the ministry is exploring ways to make salary offers more transparent and equitable, aligning with the goal of raising the median wage and ensuring real wage gains for workers.