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ICT JOB MARKETOUTLOOK IN MALAYSIAICT JOB MARKETOUTLOOK IN MALAYSIA

JUNE, 2015

IN COLLABORATION WITH

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Wisma JobStreet.com,27, Lorong Medan Tuanku 1, (off Jalan Sultan Ismail), 50300 Kuala Lumpur, MalaysiaT: +(603) 2176 0493 (DL)F: +(603) 2698 7200E: [email protected]: www.jobstreet.com

ISSN No: 2180-267XRelease date: June, 2015

Editor-in-Chief: Ramachandran Ramasamy, Head of Policy, Capability and Research, PIKOMReviewed by: Woon Tai Hai, PIKOM Research Committee Chairman

DisclaimerThis publication contains fi ndings based on data provided by JobStreet.com Sdn Bhd (449122-K) with PIKOM Services Sdn Bhd (801999-W) collaboratively carring out the data analysis. Although a professional effort has been made to ensure the accuracy of data analysis and presentation, all information furnished in this publication is provided strictly on an ‘as is’ and ‘as available’ basis and is so provided for your information and reference only. With this caution, kindly be informed that this release is not presented to address the circumstances of any particular individual or entity. As such, JobStreet.com and PIKOM including their sponsors, partners and associates, whether named or unnamed, do not warrant the accuracy or adequacy of the data and fi ndings. Moreover, all parties concerned explicitly disclaim any liability for errors or omissions or inaccuracies pertaining to the contents of this publication. Therefore, the use of data and fi ndings presented in this publication is solely at the user’s risk. PIKOM, and JobStreet.com shall in no event be liable for damages, loss or expense including without limitation, direct, incidental, special, or consequential damage or economic loss arising from or in connection with the data and / or fi ndings published in this series. However, professional advice can be sought from the producers of this publication

FOREWORD BY THE PIKOM CHAIRMAN

PIKOM signature annual report series, PIKOM’s ICT Job Market Outlook in Malaysia 2015, is once again making its mark in the industry, providing an in depth look into the average salary trends, job sentiment index, hottest sectors and jobs; including our industry outlook. My appreciation again goes to Jobstreet.com for the up-to-date data source which formed the basis of our analysis.

From the raw data that Jobstreet.com has provided, the average monthly salaries of ICT professionals are broken down by industry and job specifi cations. This year, we surveyed twenty four (24) industry classifi cations with four (4) industries from the information communication technology services (ICTS) related sector namely; ICT Hardware, ICT Software, Call Centres / ICT Enabled Services and Telecommunication Services. The other relevant industries also included electrical and electronics and semi-conductor / wafer fabrication, which are typically considered as ICT Production sectors. From here, we can also identify the top fi ve (5) paying sectors in the market by looking at different levels of pay scale for each of the sectors. The important outcome of this analysis is to distinguish and where possible quantify the disparities and differences in increments. For the fi rst time, the report also furnishes the maximum and minimum monthly salaries earned by Chief Information Offi cer (CIO) and Chief Technology Offi cer (CTO). To ensure that the report also encapsulates the regional aspect, due reference was once again made to the web published records of PayScale.com who have compiled regional benchmarking statistics. Regional data for the year 2014 encompassed 14 countries and 90 cities, including Malaysia and Kuala Lumpur. In comparison to previous year, fi ve new countries namely Saudi Arabia, Kuwait, Bahrain, Qatar and United Arab Emirates (UAE) that are also favorite destinations for Malaysian talents.

Whilst quantitative measurements give benchmarking positions or a referencing point, qualitative assessments such as market and job sentiments; and market inner dynamics are equally important in providing our reader a wholesome understanding and appreciation of the ICT salary market. In this aspect, the report also provides a job sentiment index, recruitment challenges, specializations, salary and bonus pay out expectations of employers and employees, anticipated hiring and retention possibilities. As it was in the previous year, there are two featured articles. One is depicting the top nine ICT job trends in the next fi ve years and the other is on addressing the mismatch between the right ICT disciplines and job demands like software development skills needed to hire graduates from computer science and software engineering disciplines. I am glad to note that once again the average salary of ICT professionals in our market has shown an upward trend of 7.7% in 2014. Whilst a slightly a lower forecast of a 7.4% rise is anticipated for 2015, amidst economic challenges both locally and globally, I am quietly confi dent that the ICT industry can maintain and sustain its continuing average salary growth in the years ahead. However, it is equally important to be cognizant of the fact that increasing tempo of globalization and market liberalization will also lead to a loss of professional talents to the other. Salary is only one component of the various factors that will keep our talent pool on shore.

Once again, I would like to take this opportunity to express my sincere thanks and appreciation to Jobstreet.com and PayScale web publishers for their invaluable contributions and the PIKOM Research Committee for again spearheading this publication. PIKOM is optimistically looking forward to greater support in the years ahead so that the scope and coverage of the published content can be broadened for the benefi t of all players in the industry, including Government agencies.

Cheah Kok Hoong

ICT JOB MARKET OUTLOOK IN MALAYSIA | JUNE, 2015

PREAMBLE FROM THE PIKOMRESEARCH COMMITTEE CHAIRMAN

PIKOM is again pleased to publish the “PIKOM ICT Job Market Outlook in Malaysia 2015” report. As in the past, this annual publication continues to provide information about average monthly salaries earned by Information and Communications Technology (ICT) professionals in Malaysia. To further understand the nuances of the job market, this report once again highlights the outlook of the economy and the ICT industry, reviewing key macro indicators and measures such as gross domestic product (GDP) rate and share

of ICT to GDP. It also outlines the key issues and challenges that warrant due attention. For a more holistic understanding of the salary movements, the report also supplies information on job sentiment provided by an index measure, recruitment challenges, sought-after specialization, recruitment period, salary and bonuses pay out expectations and hot ICT jobs, among others.

Average ICT Salary increased by 7.7% in 2014 In tandem with the positive economic growth rate of 5.9% and double digit y-o-y growth of 12.4%, it is pertinent to note that the average monthly salary of ICT professionals in 2014 registered an increase of 7.7%, from RM7,142 in 2013 to RM7,706 in 2014. Benchmarked against the PIKOM’s slightly lower forecasted economic growth of 5.0% (Government forecast as per Eleventh Malaysia Plan (2016-2020) 5%-6%), the industry also projects a slightly lower AAGR of 7.4% in 2015. Ironing out the fl uctuations, the average monthly salary of ICT professionals registered an average annual growth rate of 8.2% over the period 2010-2014, indicating a healthy upward trend in terms of earning capacity.

We believe this is an achievable target despite the weakening of the Malaysian Ringgit against major currencies especially the 13% drop against the US dollar over the past six months. Political stability has always been crucial and fundamental to Malaysia’s economic success and growth. On another note, the implementation of the 6% Goods and Services Tax (GST) in April 2015 is poised to increase infl ation rates in 2015. We expect a minimum of 3% compared to the 2.8% recorded at the end of 2014. This GST was imposed to create a fairer tax structure and increase the coffers of the Government with a view to reduce the nation’s fi scal defi cit to 2% in 2015. This target was revised to 3.2% in view of falling commodity prices, especially that of crude oil. Lowering the fi scal defi cit will nevertheless still be a priority for the next fi ve years, with a targeted fi gure of 0.6%.

Under 11MP, the primary drivers of Malaysian economic growth will be domestic demand. Private sector investment and consumption are expected to lead the way with public-sector investment and consumption expected to slow down. The manufacturing and services sectors together are poised to shore up more than 75% of GDP by 2020. This is projected to be the catalyst for growth in the ICT industry not only for 2015 but also extending to 2020, Malaysia’s target date of becoming a developed nation. It is also interesting to note that ICT Services contributed 6.4% to GDP in 2014, from the 3.5% in 2000. This sector is also registering double digit growth of 11.4% in 2013 and 12.5% in 2014, after taking a backseat during the 2009 Global Financial Crisis.

Widening Salary Gap among ICT JobsThe positive growth of the economy and the ICT industry has translated into higher salaries across all ICT jobs. Senior managers in particular have enjoyed the highest pay increase of 9.5%,

Woon Tai Hai


ICT JOB MARKET OUTLOOK IN MALAYSIA | JUNE, 2015ICT JOB MARKET OUTLOOK IN MALAYSIA | JUNE, 2015

6 7

followed by junior executives at 8.1% while senior executives and managers saw a 7.2% and 6.7% increase respectively. Fresh graduates were happy with a fairly decent 5.9% increase compared to the previous year’s 4.6%. It is also apparent that the salary gap between senior managers and fresh graduates has further widened by 6.22 times in 2014 from 4.95 times in 2010. Overall, the gap has widened 2.58 times in 2010 compared to 2.99 times in 2014 and projected to widen further by 3.01 times in 2015 if the current salary practices and growth trend continues. This is deemed unhealthy for the ICT industry where the employment market has been tight over a number of years. As such, the industry will continue to face challenges in retaining its younger employees and also attracting potential talents into the industry.

Continuing Attraction of the Oil and Gas sector Overall, ICT professionals employed in the science technology, aerospace and biotechnology sectors netted average monthly salaries of RM8,685, followed by the oil and gas sector with an average salary of RM8,655. By job category, the oil and gas sector again emerged as the most attractive sector for ICT professionals in 2014 especially for fresh graduates, senior executives and middle management. With the oil prices dropping in recent months, we are also sceptical if this will continue to be a trend in the next salary review. At industry level, ICT enabled services / call centre registered the highest growth rate of 19.9% from RM7,596 in 2013 to RM8,171 in 2014. Notably, outsourcing businesses has been identifi ed as one of the new sources of growth areas for the economy since the Ninth Malaysia Plan (2006-2010). Since then, this ICT segment has been experiencing signifi cant growth in investments and trade and in services. Therefore the demand for ICT professionals has been at an all-time high and PIKOM anticipates that this trend will continue in the years ahead.

CIO / CTO salary growing at 8.7% per annum at higher endFor the first time, attempt was made to compile maximum and minimum monthly salaries earned by Chief Information Office (CIO) and Chief Technology Officer (CTO) but using the Robert Walters Salary Survey findings. The study revealed CIO / CTO currently earn RM45,000 at maximum and RM29,167 at the lower end. The maximum salary for CIO/ CTO has been growing at an average of 8.7% and minimum salary remained the same over the (2012-2015) period. Effort was also made to benchmark against other ICT professionals in the managerial category. Specifically, comparing against the lowest paid test manager category, the CIO / CTO earned 2.69 times higher in 2012 and this increased to 3.46 in 2015, indicating a widening gap at the high end.

Benchmarking against Other Countries:As in the past report, we also compared Malaysian ICT salaries against that of other countries, especially those which use English as the business lingua franca. For 2014, we looked at a total of 19 economies: Malaysia as well as eight Asian other countries, namely Hong Kong, Singapore, China, Thailand, Vietnam, India, the Philippines and Indonesia, and fi ve English speaking nations namely United States, United Kingdom, Canada, New Zealand and Australia. This time, we also made comparisons with fi ve Middle-Eastern countries namely United Arab Emirates, Qatar, Kuwait, Saudi Arabia and Bahrain as a signifi cant number of Malaysians seek employment in these oil producing countries. In total, we looked at a total of 90 major cities, including Kuala Lumpur, as opposed to the 71 in previous’ year report.

For a more meaningful benchmarking, we took the Purchasing Power Parity (PPP) factor into consideration. The comparison was reported in terms of scaling numbers, which essentially highlights how many times higher or lower the salaries are compared with other regional markets. Without any PPP adjustment (or popularly termed as Atlas Criterion), the results showed that United States recorded the highest average salary for ICT professionals. The fi gure was 3.07 times more when benchmarked against average remuneration earned by Malaysian ICT professionals. Australia and New Zealand followed closely behind with 2.86 and 2.70 times respectively. Against Asian economies, Hong Kong placed top by securing a score of 2.42 times, followed by Singapore by 2.14 times. With PPP considerations, the Middle Eastern countries, namely United Arab Emirates (UAE) and Saudi Arabia stood at the top with 1.74 each followed by Kuwait with 1.63. In Asia, Hong Kong again was on the top and secured a score of 1.58 times and followed by Singapore at 1.41 times while the United States of America netted a score of 1.47 times, differing signifi cantly from 3.07 recorded under Atlas Criterion.

Under the Atlas Criterion, the top ten cities come from United States with Washington ranked highest, indicating that ICT professionals earn salaries 3.33 times higher than their counterparts in Kuala Lumpur. However, under the PPP-adjusted criterion the top ten cities were in Vietnam, Thailand, Kuwait, United Arab Emirates, Bahrain, Hong Kong and Qatar, besides those in the United States of America. Specifi cally, ICT professionals in Da Nang (expatriates who are paid in USD) netted 2.06 times higher salaries than the ICT professionals in Kuala Lumpur, followed by 1.84 times for Rayong in Thailand and 1.77 times for Kuwait city.

Hot ICT JobsHot ICT jobs today come from a cross section of the technical, business applications and soft skills categories. In the technical domain, ICT professionals equipped with Java, C#, C++, .Net, SharePoint and Web Application Developers are highly sought after. Under business applications, the fast growing jobs are notably IT Security Analyst and Big Data Analytics, two areas highly required for fending off cyber threats and data breaches. The demand for both the technical and business application jobs are also attributed to prolifi c growth experienced in cloud computing and mobile applications.

Top Nine ICT Jobs in Next Five Years: In the absence of local data, due reference was made to a study published in the United States where most of the ICT trends including job market trends emerge and became benchmarks for countries like Malaysia. The study identifi ed nine ICT jobs that will likely be in demand for the next fi ve years and further noted that among these, the demand for information security analysts is expected to grow by 36.5% annually, followed by 22.8% for software developers and 24.5% for computer support analysts. Of the total new jobs expected in next fi ve years, 45% will be concentrated on two generic jobs namely software developer and computer programmer, despite changes in the ICT landscape in terms of miniaturization of devices, mobility platform, software as a service and analytics as an integral of database administration.

It was also noted that the rapid change from the use of desktops and laptops to ipad, tablets and smart phones is also changing the landscape of top ICT jobs. It appears that the future is favorable for those who can provide Android, IOS or any smart phone contents and applications. With these changes and the volatility in job demands and up keeping ones skill sets we see the future of the ICT industry to be very exciting but challenging.


8 9

PIKOM RESEARCH COMMITTEE 2015

Woon Tai Hai• Executive Director, BDO Malaysia• Retired from KPMG Malaysia in 2013 after 15 years with the fi rm• PIKOM Chairman 2011/12• PIKOM Advisory Board 2013- 2015 /PIKOM Research Committee Chairman

2008-2015• More than 30 years of experience in IT and Management Consulting• MBA and Post Grad. Dip. in Finance and Accounting from University of

Technology, Sydney Australia (UTS)• Bachelor of Science from University of New South Wales, Australia (UNSW)

BDO is the world’s fi fth largest network of professional fi rms provider of audit, advisory and taxservices to businesses

Dr. Dzaharudin Mansor• National Technology Offi cer, Microsoft Malaysia (since 2005)• PIKOM Councillor 2014/2015• More than 30 years of professional experience in ICT and Telecommunications• Leader of Business Services Economic Transformation Program (ETP) Labs

in 2010• Held several associate positions representing PIKOM at Universities,

Ministry of Education and SIRIM• PhD in Computer Science from LaTrobe University / Honours Degree in Computer Systems

Engineering from Monash University• Aspires to contribute towards the nation’s Knowledge Economy initiative

Microsoft Malaysia reinvents productivity & business processes, build the intelligent cloudPlatform and create more personal computing

Ong Kian Yew• Executive Director, PIKOM• 15 years working in PIKOM• More than 20 years of working experience in the ICT and Public sector• Represents PIKOM in various Government committees on ICT Policy

advocacy and related matters• Represents PIKOM at international fora World IT and Services Alliance

(WITSA)• Represents PIKOM at the Asian Oceanian Computing Industry Organization

(ASOCIO)• Served as Secretary of ASOCIO in 2013• Degree in Marketing from the University of Strathclyde

For software development skills look for graduates from either Computer Science or Software Engineering disciplinesCareer opportunities in ICT, especially in Software Development, continue to be very healthy in Malaysia as well as globally. Employers of fresh graduates that require Software Development skills should hire graduates from either Computer Science or Software Engineering disciplines. In contrast, Information Technology and Information System curriculums are designed to produce expert users of technology, and hence may not have the core capabilities to develop business critical software. Unfortunately in Malaysia, most employers do not, and are not able to distinguish degrees from these distinct disciplines. This leads to a high likelihood of employing the wrong graduates for the required ICT role. While the newly-published “2014 Program Standards: Computing” aims to address this, it is important for employers to start hiring fresh graduates from the disciplines that are appropriate to the job roles. Based on Malaysia’s aspiration to become a technology producer, the industry, academia and government should look at how to attract the best brains into computer science and software engineering disciplines.


10 11

Ramachandran Ramasamy• Head of Policy, Capability and Market Research, PIKOM• Prior to PIKOM, served as offi cial statistician in Department of Statistics

and Senior Manager in MIMOS Berhad• Master of Philosophy (M Phil) from Multimedia University, Cyberjaya• Post-graduate Diploma in Population Studies from International Institute

of Population Sciences (IIPS) Bombay, India• Bachelor of Science from University of London in Physics and Mathematics• Six Sigma Green Belt (Six Sigma Advantage, USA) and Six Sigma Black Belt (Presidential

Taskforce on Quality Improvement USA)• Recipient of Gold Medal at IIPS in 1990 and Civil Service Excellence Award in 1995• Professional member of International Statistical Institute (ISI) and International Association of

Offi cial Statisticians (IAOS) since 1998

TABLE OF CONTENTS

Section A : Malaysian Economic Outlook 2015/16 15

Section B: ICT Industry Outlook 2015/16 26

Section C : ICT Salary Trends and Regional Benchmarking 35• Industry category• Top fi ve paying industry• ICT industry segments• ICT service providers and ICT user industries• Salary trend of Chief Information Offi cer (CIO) /

Chief Technology Offi cer (CTO)• Regional benchmarking• Hot ICT jobs

Section D : ICT Employment & Outlook Perception in 2015 52

Section E : Top Nine ICT Jobs in the Next 5 Years 56

Section F : Lever for Change… Fixing the ICT Graduates versus Employer Mismatch 65


12 13

INTRODUCTION

PIKOM, the National ICT Association of Malaysia, has once again taken the lead to compile the “ICT Job Market Outlook in Malaysia, 2015” in collaboration with JobStreet.com.

Besides coordinating the publication process, PIKOM was mainly responsible for data collation and analysis of ICT industry-specifi c information and outlook as well as Malaysia’s economic outlook. For its part, Jobstreet.com provided the latest salary reports of ICT professionals by industry, job market outlook in the respective ICT segments, and survey-based economic perception of job seekers and industry players. Due references were also made to Robert Walters Salary Survey fi ndings in gauging the salary performance of Chief Information Offi cer (CIO) / Chief Technical Offi cer (CTO) / Chief Data Offi cer (CDO) / Chief Analytics Offi cer (CAO).

For regional comparisons, due references were made to web-published salary information from the PayScale.com salary report. The average salary of ICT professionals in Malaysia is compared against selected Asian, English-speaking and Middle Eastern countries that have become attractive destinations for Malaysian talent migrations or talent soliciting.

The Asian countries considered in the report include Singapore, Indonesia, Thailand, Philippines, Malaysia, China, Korea and India. The English-speaking nations covered were United States of America, United Kingdom, Canada, Australia and New Zealand. Beginning with the 2015 report, fi ve Middle Eastern countries, namely Saudi Arabia, Kuwait, Bahrain, Qatar and United Arab Emirates (UAE), have been included in the study coverage.

PIKOM is the national representative of the information and communications technology (ICT) industry with 775 members as at end June 2015. Its members contribute about 80% of the total ICT revenue in the country. PIKOM membership profi les can be broadly categorized as ICT providers like wholesalers, retailers, solution providers and web service providers; ICT user community especially large-scale users in banking, insurance, telecommunications, transportation etc., and ICT-enabled service providers, in particular in the shared services and outsourcing sector. Functionally, PIKOM undertakes ICT business promotion activities, branding, trade and business promotions as well as policy and advocacy activities.

JobStreet.com (www.jobstreet.com) is a leading online recruitment company presently covering the employment markets in Malaysia, Singapore, Philippines, Indonesia and Vietnam. The Group currently services over 230,000 corporate customers and over 15 million jobseekers in its database.

The scope and coverage of the Report entails the following –

I. By industry

ICT users in Non-ICT Sectors• Agriculture / Plantations / Aquaculture• Automotive / Heavy Industry / Machinery• Banking Institutions• Chemical Industries• Construction / Building, including Civil Engineering• Consulting, both Business and Technical• Private Education• Financial Services / Securities/ Insurance/• Hotel / Restaurant / Food Services• Manufacturing• Oil / Gas / Petroleum Industries• Printing / Publishing• Property / Real Estate• Technology / Aerospace/ Bio-technology• Services• Textiles / Garment• Transport / Storage /Freight / Shipping• Utilities• Wholesale / Retail/ Trading

ICT users in ICT Sectors• Telecommunication• Semiconductor/ Wafer Fabrication• Electrical & Electronics Sector• Call Centre / ICT-Enabled Services• Computer / ICT (Hardware)• Computer / ICT (Software)

II. By Job Category

• Overall ICT Professional• Fresh Graduates – new entrants to job market and below one year of service• Junior ICT Executive – 1 to 4 years of experience• Senior ICT Executive –5 years and above of working experience• Middle ICT Manager – as declared by the job seekers• Senior ICT Manager – as declared by the job seekers


14 15

III. Top Five Paying Industries

IV. ICT Industry Segments

V. ICT Service Providers and ICT User Industries

VI. Salary Performance of Chief Information Offi cer (CIO) / Chief Technology Offi cer (CTO)

VII. Regional Benchmarking with Selected Countries and Cities• Atlas criterion versus Purchasing Power Parity (PPP) Adjusted• Nine Asian countries namely Malaysia, Hong Kong, Singapore, China, Thailand, Vietnam,

India, Philippines and Indonesia• Five English speaking nations namely United States, United Kingdom, Canada, New

Zealand and Australia• Five Middle-Eastern countries namely United Arab Emirates, Qatar, Kuwait, Saudi Arabia

and Bahrain; and• 90 cities globally

VIII. Hot ICT Jobs

SECTION A:

MALAYSIA ECONOMIC OUTLOOK 2015/16

1. GROSS DOMESTIC GROWTH RATEThe Malaysian economy should register a growth of 5.0% in 2015, a fi gure slightly lower than the 5.9% growth of 2014; see Figure 1. International fi nancial institutions have forecasted a growth of below 5% based on the weakening of the Ringgit against major world currencies, i.e. the 13% drop against the US dollar from RM3.2605 to RM3.6855 between April 2014 and April 2015.

These same institutions however, have a more positive outlook for 2016 with growth in Malaysia projected to be not less than 5.2%. This is in tandem with the 11th Malaysia Plan: 2016-2020 (11MP), which has also forecasted a similar range of 5% - 6% as the projected average annual growth for the country during the 11MP period. Contributing factors include its well-diversifi ed economy, healthy labour market, deep fi nancial markets and strong banking system.

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Figure 1: Malaysia’s GDP Growth Rate 1990-2016

Source: Department of Statistics and Bank Negara Malaysia and PIKOM’s Forecasts

2. INHERENT ECONOMIC GROWTH MOMENTUMEconomic sectors across the board recorded positive growth in 2014 (Table 1), with the construction sector clocking in the highest growth at 11.6% followed by wholesale and retail trade and the hotel and restaurants sector at 8.4%. Transport, storage and communications saw a 7.6% growth. Although the 2009 Global Financial Crisis did somewhat hinder growth, over the long term all sectors have recorded positive numbers, led by the construction sector and Government Services at an AAGR of 11.3% and 8.5% respectively.

Global forecast for the year is moderate in view of the drop in oil prices. For Malaysia, the challenge is great as lower oil prices resulting in reduced national income are coupled with the increased volatility in international fi nancial markets. Growth in 2015 and beyond during the 11MP


16 17

is expected to be driven by domestic demand, with private sector investment and consumption leading the way. Specifi cally, the Plan has projected a private-led investment growth rate of 9.4% amounting to RM291 billion.

Table 1: GDP Growth Rate by Economic sub-sector : 2009-2014

Source: Department of Statistics and Bank Negara Malaysia

3. PERFORMANCE OF ECONOMIC SUB-SECTORSAs shown in Table 2, structural changes were seen in the Malaysian economic sub-sectors between 2007 and 2014. The services sector recorded a signifi cant increase from 46.8% to 55.6%, from RM254 billion to RM462 billion with an AAGR or 8.9%.

As outlined by the 11MP, the manufacturing and services sectors, when taken together, are set to contribute more than 75% to GDP by 2020. In comparison, OECD countries have an average 75% contribution from the services sector alone, the USA has 79%, the UK clocks in at 78% while Singapore and Japan both enjoy a 73% share.

Malaysia’s services sector target is to reach 58% by 2020. This is a revised fi gure from the initial 70% as the Services Sector Blueprint of 2015 observed that there are certain challenges yet to be overcome. These include skill shortages, a mismatch between graduate skills and industry needs, low productivity and high overheads as well as the lack of resilience in fi scal policy and prudent fi nancial management, among other issues.

The Blueprint additionally outlines the critical role that ICT must play in providing contemporary infrastructure to support business and economic growth. Indeed, the 11MP has specifi cally set targets for households in state capitals and high-impact growth areas to get 100Mbps broadband internet connectivity, and for rural to get 20Mbps and consequently, to reach a target of 95% in populated areas.

Economic Sub-SectorsY-o_Y

Growth Rate

2009 2010 2011 2012 2013 2014AAGR(2009-2014)

2015

National accounts (GDP) at 2005 prices % -1.5 7.4 5.2 5.6 4.7 6.0 5.8 5.0

Agriculture, Forestry and Fishing % 0.1 2.4 5.8 1.3 2.1 2.6 2.8 0.3

Mining and Quarrying % -6.5 -0.3 -5.4 1.0 0.7 3.1 -0.2 3.0

Manufacturing % -9.0 11.9 4.7 4.8 3.5 6.2 6.2 4.9

Construction % 6.2 11.4 4.7 18.6 10.9 11.6 11.3 10.3

Electricity, Gas and Water % 2.0 7.7 3.6 4.3 4.1 3.5 4.6

5.6

Wholesale and Retail Trade, Hotel and Restaurants % 2.1 8.1 6.9 4.7 6.3 8.4 6.9

Transport, Storage and Communication % 1.3 8.4 6.8 7.2 7.4 7.6 7.5

Finance, Insurance, Real Estate and Business Services % 4.1 8.0 6.4 7.6 3.9 4.2 6.0

Other Services % 3.8 4.4 5.1 3.9 5.1 4.9 4.7

Government Services % 3.4 5.9 12.4 9.4 8.3 6.5 8.5

Plus: Import duties % -7.1 9.6 13.0 15.6 5.8 10.1 10.8 6.3

National Accounts (GDP) at 2005 prices

Unit2007 2008 2009 2010 2011 2012 2013 2014 2015

543,578 639,566 629,885 676,653 711,760 751,933 787,611 835,041 877,174

Agriculture, Forestry and Fishing

RM Million 44,912 50,035 50,064 51,263 54,249 54,963 56,095 57,527 57,675

Mining and Quarrying

RM Million 72,111 70,996 66,386 66,182 62,606 63,243 63,679 65,651 67,525

Manufacturing RM Million 148,754 167,147 152,150 170,261 178,236 186,748 193,237 205,200 215,323

Construction RM Million 16,106 18,152 19,270 21,458 22,464 26,640 29,555 32,984 36,380

Services RM Million 254,318 325,710 335,026 359,833 385,549 410,343 434,460 462,029 487,887

Electricity, Gas and Water

RM Million 14,075 15,930 16,245 17,497 18,133 18,919 19,688 20,375

Wholesale and Retail Trade, Hotel

and RestaurantsRM

Million 74,640 101,343 103,444 111,797 119,465 125,109 132,979 144,200

Transport, Storage and

CommunicationRM

Million 36,434 44,886 45,484 49,285 52,652 56,452 60,534 65,249

Finance, Insurance, Real

Estate and Business Services

RM Million 66,014 87,155 90,743 97,972 104,212 112,175 116,534 121,429

Other Services RM Million 27,500 31,764 32,965 34,414 36,176 37,588 39,519 41,441

Government Services

RM Million 35,655 44,632 46,145 48,868 54,911 60,100 65,106 69,335

Plus: Import duties RM Million 6,372 7,522 6,989 7,659 8,653 10,001 10,586 11,651 12,384

Sectorial Share (%)

National Accounts (GDP) at 2005 prices

(%) 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0

Agriculture, Forestry and Fishing

(%) 8.3 7.8 7.9 7.6 7.6 7.3 7.1 6.9 6.6

Mining and Quarrying (%) 13.3 11.1 10.5 9.8 8.8 8.4 8.1 7.9 7.7

Manufacturing (%) 27.5 26.1 24.2 25.2 25.0 24.8 24.5 24.6 24.5

Construction (%) 3.0 2.8 3.1 3.2 3.2 3.5 3.8 3.9 4.1

Services (%) 46.8 50.9 53.2 53.2 54.2 54.6 55.2 55.3 55.6

Electricity, Gas and Water (%) 2.6 2.5 2.6 2.6 2.5 2.5 2.5 2.4

Wholesale and Retail Trade,

Hotel and Restaurants

(%) 13.7 15.8 16.4 16.5 16.8 16.6 16.9 17.3

Transport, Storage and

Communication(%) 6.7 7.0 7.2 7.3 7.4 7.5 7.7 7.8

Finance, Insurance, Real

Estate and Business Services

(%) 12.1 13.6 14.4 14.5 14.6 14.9 14.8 14.5

Other Services (%) 5.1 5.0 5.2 5.1 5.1 5.0 5.0 5.0

Government Services (%) 6.6 7.0 7.3 7.2 7.7

8.08.3 8.3

Plus: Import duties (%) 1.2 1.2 1.1 1.1 1.2 1.3 1.3 1.4 1.4

Table 2: Value (RM million) and Share of Economic Sub-Sectors: 2007-2015



18 19

4. MACRO SELECTED INDICATORSDespite challenges, macro-economic fundamentals remain largely stable. Malaysia still enjoys low infl ation rates, low unemployment and manageable overnight lending rates.

4.1 Lending ratesThe ratio of national debt to GDP grew from 54.5% in 2009 to 74.0% in 2013 before dipping slightly to 69.6% in 2014 (Table 3).Household debt also rose from 60.5% to 73.6% in 2013, dropping to 71.1% in 2014. During this period the ratio of housing loans to GDP at purchaser’s value also increased signifi cantly from 31.0% to 39.9%.

Table 3: Debt to GDP Ratio: 2009-2014

Source: Bank Negara Malaysia

In response to rising household debt Bank Negara Malaysia increased the OPR to 3.25% on 10 July, 2014. Prior to this the OPR had been at 3.00% since May 2011 (Figure 2). Subsequently, the base lending rates (BLR) and interbank rates increased from 6.53% in 2013 to 6.66% in 2014. In essence, low BLR stimulates consumption, from the private household level to small and medium business loans and domestic investments.

1.5

2.0

2.5

3.0

3.5

4.0

Jan-1

5

Oct-14

Jul-1

4

Apr-1

4

Jan-1

4

Oct-13

Jul-1

3

Apr-1

3

Jan-1

3

Oct-12

Jul-1

2

Apr-1

2

Jan-1

2

Oct-11

Jul-1

1

Apr-1

1

Jan-1

1

Oct-10

Jul-1

0

Apr-1

0

Jan-1

0

Oct-09

Jul-0

9

Apr-0

9

Jan-0

9

Oct-08

Jul-0

8

Apr-0

8

Jan-0

8

Oct-07

Jul-0

7Ap

r-07

Jan-0

7

3.25

2.50

2.753.00

3.25

3.25

2.50 2.25

2.00

3.50

PE

RC

EN

TAG

E

Figure 2: Overnight Policy Rates: January 2007 – January 2015


4.2 Infl ation RateInfl ation crept up to 3.2% in 2014 from the 2.1% and 1.6% fi gures for 2013 and 2012 respectively. In fact, it has been on the rise since the last quarter of 2012. The government’s ongoing subsidy rationalisation efforts that began in 2013 are primary contributors to this increase. The 6% Goods and Services Tax (GST) that was implemented in April 2015 is expected to add even more pressure on infl ation fi gures. According to Bank Negara Malaysia the 2015 infl ation fi gures will likely remain

Year Total Debts

Types of Borrowing

GDP at Purchaser’s

Value

Housing Loans

Outstanding

Household Sector Loans

Debt ratio to GDP at

purchaser’s value

Housing Loan debt to

GDP

Household Sector Loans

to GDPOff-shore Borrowing

Non-resident

debts securities

Non-resident Desposits

Other Debts

RM (million) (%)

2009 388,345 232,732 70,383 34,511 50,719 712,857 221,306 431,521 54.5 31.0 60.5

2010 434,278 227,072 118,935 34,628 53,643 797,328 266,116 489,454 54.5 33.4 61.4

2011 537,456 257,273 163,268 43,917 72,997 885,340 299,549 552,551 60.7 33.8 65.7

2012 602,060 257,594 223,606 58,963 61,897 941,949 334,413 619,033 63.9 35.5 65.7

2013 696,610 324,088 229,674 77,325 65,524 941,949 375,239 693,395 74.0 39.8 73.6

2014 744,700 367,072 223,291 87,672 66,665 1,070,007 426,800 761,065 69.6 39.9 71.1

under 3% for several reasons: (i) The decline in oil prices will lead to lower domestic fuel prices (ii) The depreciation of the Ringgit will cushion imported infl ation through increased cost of imports (iii) Basic necessities are zero-rated or GST exempt while for many items, the GST will replace the existing Sales and Service Tax (iv) The government is closely monitoring the GST implementation and taking measures to curb profi teering.

4.3 Employment and Unemployment RateMalaysia’s employment fi gures rose from 11.9 million in 2010 to 13.6 million in 2014 clocking in an AAGR of 3.5%. Concurrently unemployment rates dropped from 3.3% to 2.9%. In fact, Malaysia’s overall unemployment rate has remained well below 4% since 1990, effectively refl ecting full employment. Malaysia has actually been importing signifi cant foreign labour to ease the labour shortages especially in the production and operations sectors. ICT knowledge workers have also been brought in to meet demands in the high value adding sectors as well as R&D and innovation activities. However, despite these two phenomena, unemployment among graduates has always been a critical political and social issue.

4.4 Foreign Exchange RateThe drop of the Malaysian Ringgit against the US dollar towards the end of 2014 was disturbing.Weakening from RM3.178 in August 2014 it clocked in at RM3.681 in March 2015, dropping by a signifi cant 13.9%; see Figure 3. Bank Negara said sentiments started to shift in September-October with other regional currencies experiencing similar depreciation against the dollar. . It also fell against the pound sterling but strengthened against the Euro and Japanese yen. This weakening was driven largely by the developments in advanced economies and better prospects for the US economy.

2.900

3.000

3.100

3.200

3.300

3.400

3.500

3.600

3.700

3.800

Apr-1

5

Mar-15

Feb-1

5

Jan-1

5

Dec-15

Nov-14

Oct-14

Sep-1

4

Aug-1

4

Jul-1

4

Jun-1

4

May-14

Apr-1

4

Mar-14

Feb-1

4

Jan-1

4

3.304

3.308

3.283

3.258

3.228

3.2183.184

3.178

3.2183.269

3.480

3.593

3.681

3.6563.584

3.344

Figure 3: Foreign Exchange Rate per USD January 2014-April 2015


4.5 Domestic DemandAs always, domestic demand is largely driven by private and public consumption expenditure; (Table 4). Overall consumption growth stood at 9.1%. Of this, private consumption grew by 10.0% and public consumption expenditure at 5.8% in 2014. However, the lower forecasted GDP in turn projects a slower growth of consumption expenditure at 7.2% for 2015. In the past 10 years, consumption expenditure rose by 11.0% between 2005 and 2014. During this period the gross capital formation also registered a 11.2% growth annually. In the past public consumption continues to contribute to this fi gure through the Government’s drive via economic transformation and Corridor projects but in 2015 public consumption is expected to be moderate, with less spent on supplies and services following the Government’s expenditure rationalisation measures.


20 21

Table 4: Final Consumption Expenditure by Government and Private: 2005-2015


5. EXTERNAL DEMAND5.1 Overall Trade DependencyDespite a negative growth during the 2009 Global Financial Crisis, exports have grown at an AAGR of 4.8% over the past 10 years from 2004 onwards; see Figure 4. Similarly, imports rose steadily at 5.5% during this period. The 11MP has projected an AAGR of export of 4.6% and trade surplus at RM57.3 billion by 2020. However, there continues to be concern over the volatility of the global economy with the latest US Federal Reserve report indicating softer macro-economic data including a slowdown of the Chinese economy and the on-going anaemic growth in the Eurozone. All these factors will affect our exports.

300,000

350,000

400,000

450,000

500,000

550,000

600,000

650,000

700,000

750,000

800,000

20142013201220112010200920082007200620052004

766,129

682,982

719,992

648,805

702,641

606,677

697,862

573,626

638,826

528,828

552,518

434,670

663,012

519,804

604,500

502,045

589,240

478,148

536,234

532,871

481,253

399,632

TOTAL EXPORTS

TOTAL IMPORTS

IMPORTS ANNUAL AVERAGE GROWTH RATE (2004-2014) 5.5%

EXPORTS ANNUAL AVERAGE GROWTH RATE (2004-2014) 4.8%

Figure 4: Exports and Imports in Malaysia, 2004-2014

Source: Department of Statistics

YearFinal Consumption Expenditure Gross Fixed Final Consumption Expenditure Gross Fixed

Total Government Private Capital Formation Total Government Private Capital

Formation

RM (Million) at current prices Year-on-Year Growth Rate (%)

2005 302,556 62,368 240188 121,237

2006 331,231 66,647 264,584 131,024 9.5 6.9 10.2 8.1

2007 377,377 76,959 300,418 149,064 13.9 15.5 13.5 13.8

2008 432,796 88,581 344,215 158,381 14.7 15.1 14.6 6.3

2009 441,185 93,017 348,168 156,660 1.9 5.0 1.1 -1.1

2010 476,273 97,482 378,791 179,793 8.0 4.8 8.8 14.8

2011 534,282 115,515 418,767 197,415 12.2 18.5 10.6 9.8

2012 588,768 127,473 461,295 241,562 10.2 10.4 10.2 22.4

2013 637,749 133,704 504,045 265,013 8.3 4.9 9.3 9.7

2014 695,803 141,445 554,358 282,600 9.1 5.8 10.0 6.6

2015 745,958 146,527 599,431 300,064 7.2 3.6 8.1 6.2

AAGR:2005-2014 11.0 10.8 11.0 11.2

5.2 Direction of TradeBased on data shown in Table 5 gross exports to Asian markets (excluding Japan and Singapore) rose from 31.9% in 2005 to 41.7% in 2014. Exports to China especially rose from 6.6% to 12.1% while India’s share climbed from 2.8% to 4.2%. Exports to these two countries have been registering double digit growth at an AAGR of 11.1% and 10.8% respectively.

Table 5: Direction of Malaysian Exports: 2004-2014


Year Singapore Other Asian Japan

People’s Republic of China

Other East

CountriesIndia Oceana

RegionUnited State & Canada

Europe including

RussiaRest of

the worldTotal

Exports

Ringgit Malaysia (RM) Million

2004 71,937 47,465 48,499 32,286 62,758 11,457 17,512 93,269 66,752 29,317 481,253

2005 83,596 54,556 50,509 35,153 66,078 15,137 20,171 108,106 68,177 34,75O 536,234

2006 90,751 61,786 52,,215 42,660 67,574 18,783 19,186 114,353 81,138 40,795 589,240

2007 88,508 65,839 55,241 53,035 68,809 20,204 22,988 97,800 84,835 47,040 604,300

2008 97,019 71,578 70,688 53,435 73,805 24,728 27,914 85,919 83,696 64,231 663,012

2009 77,009 63,846 53,345 67,359 65,365 17,306 22,107 63,575 65,836 56,770 552,518

2010 85,253 75,045 66,763 80,105 78,941 20,934 27,007 64,080 74,273 66,425 638,826

2011 88,191 80,904 81,368 91,551 83,458 28,154 28,694 60,435 79,264 75,844 697,862

2012 95,553 89,6S6 83,401 88,793 80,220 29,325 32,708 63,719 68,153 71,114 702,641

2013 100,257 98,294 79,197 97,043 82,461 25,735 33,581 60,582 71,280 71,563 719,992

2014 108,839 101,232 82,709 92,348 93,634 31,897 38,210 67,055 80,109 70,096 766,129

AAGR2004-2014 4.2 7.9 5.5 11.1 4.1 10.8 8.1 (3.2) 1.8 9.1 4.8

Share in percentage (%)

2004 14.9 9.9 10.1 6.7 13.0 2.4 3.6 19.4 13.9 6.1 100.0

2005 15.6 10.2 9.4 6.6 12.3 2.8 3.8 20.2 12.7 6.5 100.0

2006 15.4 10.5 8.9 7.2 11.5 3.2 3.3 19.4 13.8 6.9 100.0

2007 14.6 10.9 9.1 8.8 11.4 3.3 3.8 16.2 14.0 7.8 100.0

2008 14.6 10.8 10.7 9.6 11.1 3.7 4.2 13.0 12.6 9.7 100.0

2009 13.9 11.6 9.7 12.2 11.8 3.1 4.0 11.5 11.9 10.3 100.0

2010 13.3 11.7 10.5 12.5 12.4 3.3 4.2 10.0 11.6 10.4 100.0

2011 12.6 11.6 11.7 13.1 12.0 4.0 4.1 8.7 11.4 10.9 100.0

2012 13.6 12.8 11.9 12.6 11.4 4.2 4.7 9.1 9.7 10.1 100.0

2013 13.9 13.7 11.0 12.5 11.5 3.6 4.7 8.4 9.9 9.9 100.0

2014 14.2 13.2 10.8 12.1 12.2 4.2 5.0 8.8 10.5 9.1 100.0

Gross domestic product (GDP) is projected to drop to 5.0% in 2015 (5.9% in 2014) with the weakening Ringgit adversely affecting trade, coupled with the falling crude oil prices and infl ationary pressures exerted by the Goods and Services Tax (GST).


22 23

Based on data shown in Table 6 gross imports from Asian countries (excluding Japan and Singapore) also expanded from 38.5% to 43.5% in the same period. China and India once again played signifi cant roles with import fi gures growing from 11.5% to 16.9% and from 1.0% to 2.0% respectively. The AAGR of imports has also seen double digit growths of 11.4% for China and 11.2% for India. Trading with Japan and Singapore however has stagnated while trade with USA / Canada plummeted from 20.2% to 8.8% for gross exports and 13.4% to 8.1% for imports between 2008 and 2014. This shows that Malaysia’s dependence on external trade has shifted towards Asia, registering positive growth. Continued positive growth for China and India is expected to further boost Malaysia’s external trade numbers.

Table 6: Direction of Malaysian Imports: 2004-2014


Year Singapore Other Asian Japan

People’s Republic of China

Other East

CountriesIndia Oceania

United State & Canada

Europe including

RussiaRest of

the worldTotal

Exports

Ringgit Malaysia (RM) Million

2004 44,278 50,883 64,389 39,274 52,662 4,631 8,093 59,621 50,645 25,158 399,632

2005 50,586 55,510 62,773 49,880 56,897 4,169 9,430 58,001 57,238 28,388 432,871

2006 56,188 60,541 63,568 58,226 65,454 4,884 10,121 62,614 60,865 35,686 478,148

2007 57,955 64,793 65,539 64,903 69,087 7,067 11,876 57,261 67,415 36,148 502,045

2008 57,056 68,308 64,878 66,854 63,554 10,278 14,290 59,392 68,558 46,629 519,804

2009 49,359 60,778 54,316 61,026 49,995 7,872 11,124 51,108 55,471 33,620 434,670

2010 60,278 82,166 66,535 66,430 66,079 7,978 12,156 59,122 59,933 48,161 528,828

2011 73,699 84,872 65,362 75,706 64,974 10,191 15,221 58,206 65,625 59,768 573,626

2012 80,476 87,831 62,374 91,864 64,348 11,803 17,031 51,963 72,664 66,323 606,677

2013 80,249 91,372 56,360 106,265 73,979 16,346 19,236 53,835 81,909 69,143 648,695

2014 85,684 88,615 54,711 115,503 78,079 13,340 23,149 55,342 87,481 81,079 682,082

AAGR2004-2014 4.2 5.7 (1.6) 11.4 4.0 11.2 11.1 (0.7) 5.6 12.4 5.5

Share in percentage (%)

2004 11.1 12.7 16.1 9.8 13.2 1.2 2.0 14.9 12.7 6.3 100.0

2005 11.7 12.8 14.5 11.5 13.1 1.0 2.2 13.4 13.2 6.6 100.0

2006 11.4 12.7 13.3 12.2 13.7 1.0 2.1 13.1 12.7 7.5 100.0

2007 11.5 12.9 13.1 12.9 13.8 1.4 2.4 11.4 13.4 7.2 100.0

2008 11.0 13.1 12.5 12.9 12.2 2.0 2.7 11.4 13.2 9.0 100.0

2009 11.4 14.0 12.5 14.0 11.5 1.8 2.6 11.8 12.8 7.7 100.0

2010 11.4 15.5 12.6 12.6 12.5 1.5 2.3 11.2 11.3 9.1 100.0

2011 12.8 14.8 11.4 13.2 11.3 1.8 2.7 10.1 11.4 10.4 100.0

2012 13.3 14.5 10.3 15.1 10.6 1.9 2.8 8.6 12.0 10.9 100.0

2013 12.4 14.1 8.7 16.4 11.4 2.5 3.0 8.3 12.6 10.7 100.0

2014 12.5 13.0 8.0 16.9 11.4 2.0 3.4 8.1 12.8 11.9 100.0

5.3 Trade in ServicesThe signifi cant growth in services was also contributed by the imports and exports of ICT services. The implementation of MSC Malaysia in the mid-90s led to the overall increase of ICT services exports from RM73,014 million in 2005 to RM126,172 million in 2014, registering AAGR of 6.3%, as shown in Table 7 .

Of this, share of information and communication services to overall services exports expanded from 3.3% to 7.1% during 2005-2014 with its value increasing from RM2,382 million to RM8,965 million by recording AAGR of 15.9% .

Similarly, the overall imports of services expanded from RM83,886 million to RM146, 718 million registering an AAGR of 6.4% over the 10 years in question. According to the share of imports of telecommunications, computer and information services, overall imports of services expanded from 3.1% in 2005 to 6.9% by 2014 when the amount increased from RM2,577 million to RM10,161million that is, AAGR of 16.5%.

Table 7: Exports and Imports of Services and Share of Telecommunications, Computer and Information, 2005-2014


5.4 Foreign Direct InvestmentMalaysia is still very dependent on Foreign Direct Investments (FDI) despite the aggressive promotion of internal growth through R&D and patenting, commercialisation and innovation strategies. As refl ected in Table 8, taken as individual investor nations, Japan, Singapore and the Netherlands consistently top the list as major investors in Malaysia. Regionally, the bulk of FDI came from North Asia followed by Europe and ASEAN nations. Naturally, there was hardly any FDI from countries facing economic or political issues. This positive sentiment regarding investments into Malaysia is expected to continue.

Year

Exports / Credit Services Imports / Debit Services

Total Y-o-YTelecommunications,

Computer & Information Services

Total Y-o-YTelecommunications,

Computer & Information Services

RM Million % RM MillionShare to Service

Exports (%)RM Million % RM Million

Share to Service

Imports (%)

2005 73,014 - 2,382 3.3 83,886 - 2,577 3.1

2006 77,291 5.9 3,329 4.3 86,718 3.4 3,616 4.2

2007 99,867 29.2 4,045 4.1 98,485 13.6 4,202 4.3

2008 103,641 3.8 5,107 4.9 102,084 3.7 5,393 5.3

2009 98,151 (4.7) 6,675 6.8 94,578 (7.4) 6,598 7.0

2010 102,900 4.2 6,851 6.7 104,344 10.3 6,377 6.1

2011 110,630 7.5 7,412 7.7 116,902 12.0 7,246 6.2

2012 116,995 5.8 9,033 7.7 133,206 13.9 8,549 6.4

2013 126,839 8.4 8,985 7.1 143,532 7.8 10,035 7.0

2014 126,172 (0.5) 8,965 7.1 146,718 2.2 10,161 6.9

AAGR 2005-2014 (%) 6.3 15.9 6.4 16.5


24 25

Table 8: Exports and Imports of Services and Share of Telecommunications, Computer and Information, 2005-2014


6. ECONOMIC CHALLENGESDespite favourable fundamentals, the Malaysian economy is not totally free from economic challenges. Malaysia is in fact faced with a number of issues:

6.1 The Weakening of the RinggitThe Malaysian Ringgit fell not only against the US dollar but also against many Asian currencies..However, it fared well against the Japanese Yen and the Euro. This currency devaluation began in the later part of 2013 following the U.S. Federal Reserve’s changes in monetary policy and decision to reduce quantitative easing (QE). During this time, emerging economies such as Malaysia suffered some of the worst capital outfl ows in recent history. Subsequently, import costs rose signifi cantly. Nevertheless the MIER reports that fi rms absorbed the rising costs by raising productivity and sourcing better priced materials. The unexpected sharp decline in the prices of crude oil and other commodities also contributed towards staving off domestic infl ationary pressures.

Countries2010 2011 2012 2013 2014 2010-2014

RM Million RM Million RM Million RM Million RM Million %

Other Countries 5,258 10,807 8,458 6,495 8,848 39,866 23.7

Japan 2,876 9,868 5,872 8,059 2,251 28,926 17.2

Singapore 1,405 6,347 5,350 5,532 8,322 26,956 16.0

Netherlands 6,125 3,552 1,955 4,750 6,578 22,960 13.6

USA 8,031 3,342 (1,366) 1,213 (2,095) 9,125 5.4

Central & South America 2,954 (3,381) 1,592 4,845 5,658 11,668 6.9

Switzerland 798 1,033 1,638 2,186 576 6,231 3.7

Korea 4,576 429 (6971 (528) (1,398) 2,382 1.4

Hong Kong (761) (436) 1,146 4,379 3,500 7,828 4.6

Germany (476) 3,017 1,720 (24) 1,026 5,323 3.2

Australia 15 675 1,672 361 (418) 2,305 1.4

Thailand (398) 1,147 (173) 765 390 1,731 1.0

France 607 345 (88) 207 1,347 2,418 1.4

United Kingdom (1,301) 1,030 988 (247) (113) 357 0.2

China (3) 25 96 327 747 1,192 0.7

Denmark (104) 103 (82) 159 162 238 0.1

Luxembourg 132 (521) 702 (318) (258) (263) -0.2

China Taipei (412) (119) (246) 80 (36) (733) -0.4

Total 29,322 37,323 28,537 38,241 35,087 168,510 100.0

Europe 5,781 8,619 6,833 6,713 9,318 37,264 22.1

North Asia 6,276 9,767 6,171 12,317 5,064 39,595 23.5

ASEAN 1,007 7,494 5,117 6,297 8,712 28,687 17.0

6.2 Goods and Services Tax (GST) ImplementationThe GST was implemented in April 2015 as planned. It is essentially aimed at broadening the tax base and increasing taxation revenues seeing as only an estimated 1.7 million of Malaysia’s 12 million working population paid taxes under the direct tax system. It is also to reduce national external debt which has signifi cantly climbed from 56.3% to 72.1% of Gross National Income (GNI). In tandem with this, the debt servicing ratio rose from 10.6% to 18.2%. As highlighted in the 11MP, revenue from the goods and services tax is expected to amount to RM31.4bil a year (RM157B over 5 years) as compared to a lower Sales and Service Tax (SST). This can be a cushion to a potential shortfall especially in servicing the country’s debt that rose signifi cantly in recent years. The strategy also requires prudent management of capital intensive infrastructure projects like Iskandar Malaysia and high-speed railway KL to Singapore and BR1M programme that positioned to assist the poor and needy.

6.3 Falling Crude Oil PricesThe GST implementation is expected to cause a one-off increase for the prices of certain goods and services. This will exert infl ationary pressures that would likely burden the middle and lower income groups in the short term. Fortunately low energy prices have eased the pressure of the GST tax reforms. Average crude oil prices dropped to USD49.11 per barrel in January 2015, from the high of USD113.24 per barrel in January 2014. This 56.6% drop in prices, while signifi cantly eating into Malaysian coffers as an oil exporting country, was good news for the Malaysian economy, easing the implementation of the GST in the coming months. Subsidy rationalization through fl oating the petrol prices in the market may help to reduce the Government’s burden.

6.4 Country Sovereign RatingAs the ringgit headed further drop against the USD (at the time of this article), there is also a speculation that the country sovereign rating may be downgraded from her current ‘A’ rating. This is largely due to the worsening trade balance, exports falling, increasing household/public debt, concern on the ability to repay its debt and the continued weakening of the ringgit. A downgrade will certainly impact our economy as it will not only be more expensive for us to borrow in the long term but the confi dent of investors will also be eroded.


26 27

SECTION B:

ICT INDUSTRY OUTLOOK 2015/16

The ICT sector encompasses a wide range of services and products from the Internet and telecommunications fi eld, satellite and data communication services, to hardware and software, publishing, media, data processing and others.

Growth in this sector has been on the uptrend in the last 15 years. In fact the ICT Services has been recording a double digit growth annually since the Global Financial Crisis, in 2009, clocking in RM51.6 billion in 2010 and then on to RM62.1 billion in 2014.

The sector is poised to register a higher y-o-y growth rate at 14.2% to reach RM70.9 billion in 2015. Subsequently the share of the ICT Services sector to GDP almost doubled from 3.3% in 2000 to 6.4% by 2014; see Figure 1.

2.0

2.5

3.0

3.5

4.0

4.5

5.0

5.5

6.0

6.5

7.0

2015201420132012201120102009200820072006200520042003200220012000

6.45.95.65.35.15.24.53.93.94.23.93.43.63.83.63.3SHARE OFICT GDP(%)

Figure 1: Share of ICT Services (ICTS) to GDP, 2000-2015

Source: Department of Statistics and PIKOM Estimates

Looking at the sub-sectors, double digit growth has been seen in computer services, online publishing and programming and broadcasting have been registering double digit growth in the past 5 years. Programming and broadcasting have been doing especially well with an impressive growth of 28.3%, followed by computer services 12.1% and publishing by 10.0%; see Table 1.

Table 1: ICTS Value Added Services and Growth Rates by Sub-sectors, 2000-2015


There have also been interesting structural changes within the ICT Services segments; see Table 2. The contribution of telecommunication services dipped from 65.2% in 2010 to 61.4% in 2014 and is poised to drop further to 58.4% in 2015. However, there was an expansion in the areas of computer service, programming and broadcasting and also publishing.

These changes in growth and sectorial shares are attributed to :-• the move from traditional computers to smaller ICT devices and wearable gadgets;• the increasing amount of real-time and interactive multi-media content supported by mobile

technology;• the rising popularity of cloud computing, big data analytics, software as a service (SaaS),

social media applications, Internet of things and wearable technology; • the integration of systems and processes and ICT services by and with the people and

institutions and service providers.

Table 2: Share of Sub Sectors to Overall ICTS Sector, 2010-2015


Year

Telecom-munication

Services(‘000)

Y-o-Y(%)

ComputerServices(“000)

Y-o-Y(%)

Publi-shing(‘000)

Y-o-Y(%)

Motion picture,video &

Televisionprogramme

Y-o-Y(%)

Program-ming &Broad-casting(‘000)

Y-o-Y(%)

Informa-tion

Services(‘000)

Y-o-Y(%)

OverallICTS Value

Added Services

Y-o-Y(%)

2000 10,335,256 868,758 193,273 373,770 11,771,057

2001 10,815,979 4.7 1,257,657 44.8 269,319 39.3 401,837 7.5 12,744,792 8.3

2002 12,261,462 13.4 1,412,888 12.3 254,765 -5.4 723,191 80.0 14,652,306 15.0

2003 12,368,517 0.9 1,916,304 35.6 255,963 0.5 451,370 -37.6 14,992,154 2.3

2004 12,773,701 3.3 2,056,348 7.3 356,714 39.4 900,659 99.5 16,087,422 7.3

2005 16,352,349 28.0 2,718,059 32.2 387,730 8.7 729,783 -19.0 20,187,921 25.5

2006 19,252,783 17.7 3,125,191 15.0 419,412 8.2 1,060,626 45.3 23,858,012 18.2

2007 19,532,436 1.5 3,772,887 20.7 427,088 1.8 1,303,982 22.9 25,036,393 4.9

2008 22,655,972 16.0 5,168,116 37.0 447,618 4.8 1,818,648 39.5 30,090,354 20.2

2009 21,908,147 -3.3 6,496,356 25.7 271,688 1,483,674 231.5 1,839,604 1.2 31,999,469 6.3

2010 27,106,855 23.7 9,360,934 44.1 503,080 85.2 1,056,006 1,565,327 5.5 2,001,388 8.8 41,593,590 30.0

2011 29,778,845 9.9 9,945,621 6.2 590,079 17.3 1,065,823 0.9 1,690,288 8.0 2,189,221 9.4 45,259,877 8.8

2012 32,178,234 8.1 10,855,882 9.2 623,188 5.6 1,207,919 13.3 2,231,082 32.0 2,402,170 9.7 49,498,475 9.4

2013 35,140,716 9.2 11,912,680 9.7 635,404 2.0 1,262,275 4.5 3,487,370 56.3 2,714,804 13.0 55,153,249 11.4

2014 38,114,550 8.5 14,762,496 23.9 735,312 15.7 1,380,455 9.4 4,240,109 21.6 2,818,501 3.8 62,051,424 12.5

2015 41,370,307 8.5 18,777,527 27.2 962,346 30.9 1,426,010 3.3 5,161,207 21.7 3,194,059 13.3 70,891,456 14.2

AAGR: 2010-2014 8.9 12.1 10.0 6.9 28.3 8.9 10.5

Year

Telecom-munication

Services(‘000)

ComputerServices(‘000)

Publising(‘000)

Motion picture,video & television

programme(‘000)

Programming& Broadcasting

(‘000)

InformationServices(‘000)

Overall ICTS Value Added Services

2010 65.2 22.5 1.2 2.5 3.8 4.8 100

2011 65.8 22.0 1.3 2.4 3.7 4.8 100

2012 65.0 21.9 1.3 2.4 4.5 4.9 100

2013 63.7 21.6 1.2 2.3 6.3 4.9 100

2014 61.4 23.8 1.2 2.2 6.8 4.5 100

2015 58.4 26.5 1.4 2.0 7.3 4.5 100


28 29

Malaysian ICT Services growth is propelled by both local and foreign investments.

As depicted in Table 3, credit exports from the information and communication services sector saw a 19.6% average growth between 2008 and 2014, hedging well against traditional services sector activities such as wholesale and retail, mining and quarrying, at 17.6%, 15.1% and 14.6% respectively.

Meanwhile, Table 3 also showed credit exports share recorded an increase of 1.8% to 4.1% for information and communication services in the same period. Manufacturing however sill commanders the highest sectorial share in terms of FDI, albeit decreasing from 61.5% to 50.2%.

Table 3: Foreign Direct Investment in terms of Credit (Exports) in Malaysia by Sector, 2008-2014


Year

Agriculture Forestry &

Fishing

Mining & Quarrying (Including oil & Gas)

Manu-facturing

Construc-tion

Services Sectors

TotalWholesale & Retail Trade

Information and

Commu-nication

Financial & Insurance / Takaful Activities

Other Services

Sub-Total Services

Credit (RM million)

2008 386 7,225 54,937 550 6,262 1,615 15030 3,261 26,168 89,266

2009 1 9,857 44,715 239 8,054 540 6,606 1,243 16,443 71,255

2010 13 7,781 55,274 361 14,313 3,900 8,737 2,279 29,230 92,660

2011 212 9,946 58,852 521 10,354 2,444 12,886 7,906 33,590 103,121

2012 338 13,030 62,913 809 11,022 5,151 9,080 5,173 50,426 107,516

2013 1,039 14,648 54,911 1,581 10,173 4,961 7,950 8,477 31,560 103,740

2014 574 16,369 58,289 1,453 14,531 4,720 12,888 7,193 39,332 116,017

AAGR 2008-2014 6.8 14.6 1.0 17.6 15.1 19.6 -2.5 14.1 7.0 4.5

Share by sector (%)

2008 0.4 8.1 61.5 0.6 7.0 1.8 16.8 3.7 29.3 100.0

2009 0.0 13.8 62.8 0.3 11.3 0.8 9.3 1.7 23.1 100.0

2010 0.0 8.4 59.7 0.4 15.4 4.2 9.4 2.5 31.5 100.0

2011 0.2 9.6 57.1 0.5 10.0 2.4 12.5 7.7 32.6 100.0

2012 0.3 12.1 58.5 0.8 10.3 4.8 8.4 4.8 28.3 100.0

2013 1.0 14.1 52.9 1.5 9.8 4.8 7.7 8.2 30.4 100.0

2014 0.5 14.1 50.2 1.3 12.5 4.1 11.1 6.2 33.9 100.0

For the past two years, the ICT Services sector has registered increasing double digit growth, (11.4% in 2011, 12.5% in 2012) and the momentum is expected to record 14.2% by 2015. The growth is attributed to intensifi cation of digitization processes in transformation projects and capital intensive corridor projects.

In terms of debit imports, as shown in Table 4 the information and communication services registered highest annual growth rate of 30.3% during the period (2008-2014). The share of information and communications services expanded from 1.5% in 2008 to 5.9% in 2014. Nonetheless, share of manufacturing sector FDI debit imports continued to record the highest share.

Table 4: Foreign Direct Investment in terms of Debit (Imports) in Malaysia by Sector, 2008-2014


The Services Sector Blue print of March 2015 has identifi ed the ICT Services sector as spearheading the move of the Malaysian economy, from being an industrial driven economy to a services oriented one by 2020. The information and communication services sector is poised to play the role as enable and driver and also position to be the catalyst for the transformation of society and the economy. Naturally it will be supported by the necessary parameters including high speed broadband, R&D, innovation, patenting and commercialization incentives.

Year

Agriculture Forestry &

Fishing

Mining & Quarrying (Including oil & Gas)

Manu-facturing

Construc-tion

Services Sectors

TotalWholesale & Retail Trade

Information and

Commu-nication

Financial & Insurance / Takaful Activities

Other Services

Sub-Total Services

Credit (RM million)

2008 121 9,520 42,568 436 6,224 976 3,336 2,160 12,695 65,342

2009 89 6,587 46,458 342 5,365 2,598 2,360 2,336 12,658 66,134

2010 60 4,673 38,729 584 11,714 3,551 2,504 1,661 19,430 63,477

2011 130 2,169 42,148 423 7,026 2,829 7,571 3,501 20,926 65,797

2012 46 3,584 49,817 431 8,587 5,059 7,620 3,436 25,102 78,979

2013 38 3,407 40,642 670 9,973 2,485 5,245 3,042 20,744 65,501

2014 111 3,845 54,553 592 9,813 4,783 2,938 4,296 21,830 80,911

AAGR 2008-2014 -1.4 -14.0 4.2 5.2 7.9 30.3 -2.1 12.1 9.5 3.6

Share by sector (%)

2008 0.2 14.6 65.1 0.7 9.5 1.5 5.1 3.3 19.4 100.0

2009 0.1 10.0 70.2 0.5 8.1 3.9 3.6 3.5 19.1 100.0

2010 0.1 7.4 61.0 0.9 18.5 5.6 3.9 2.6 30.6 100.0

2011 0.2 3.3 64.1 0.6 10.7 4.3 11.5 5.3 31.8 100.0

2012 0.1 4.5 63.1 0.5 10.9 6.4 9.6 4.9 31.8 100.0

2013 0.1 5.2 62.0 1.0 15.2 3.8 8.0 4.6 31.7 100.0

2014 0.1 4.8 67.4 0.7 12.1 5.9 5.6 5.3 27.0 100.0


30 31

Online Transactions - Opportunities and ChallengesThe demand for Internet and mobile banking solutions is growing exponentially. This growth has been supported by various factors and supportive initiatives that are continuously strengthening the framework for secured and safe transactions. Regulations, supervisory services, multi-faceted e-payment systems, legalities, licensing and policies are all coming together and being constantly upgraded to facilitate online transactions. High speed internet access and real-time broadband provisions and advanced mobile devices such as tablets and phones that offer versatile operation systems are also key developments in this arena.

Internet fi nancial transactions are convenient and fast, time-saving and practically instantaneous. And they can be carried out from anywhere as long as there is internet connectivity. As for mobile banking one would just need a good smart mobile phone that is equipped with the features required by the relevant banks.

Mobile banking started to really take off early 2012 when three major banks collaborated with two major mobile network operators to introduce mobile banking and payment services under MyMobile. This application allowed registered users to transfer funds, pay bills and credit card balances and reload prepaid mobile phone cards at any time and from any location. With MyMobile, fund transfers could be done using the mobile phone numbers of benefi ciaries instead of bank account numbers.

Overall, internet banking has grown at a prolifi c rate with the number of subscribers growing from 2.6 million in 200 5to 17.6 million in 2014, an AAGR of 16.7% over fi ve years; see Table 5.. Mobile banking also saw an increase of subscribers from 127,600 subscribers to 5.64 million over the past one decade, registering an AAGR of 52.9% for the years between 2009 and 2014; see Figure 2.

Table 5: Internet and Mobile Banking Subscribers, 2005-2014

Source: Bank Negara Malaysia and PIKOM Estimates

Year

Internet Banking Mobile Banking

Number of Subscribers Penetration to population (%)

Number of Subscribers To Population To mobile

subscribersTotal Individual Corporate

million % (‘000) (%)

2005 2.6 2.5 0.1 9.8 127.6 0.5 0.7

2006 3.2 3.2 0.0 12.0 246.7 0.9 1.3

2007 4.6 4.5 0.1 16.9 367.6 1.4 1.6

2008 6.2 6.1 0.1 22.5 574.6 2.1 2.1

2009 8.1 8.0 0.2 28.9 675.0 2.4 2.2

2010 9.8 9.6 0.2 34.4 898.5 3.1 2.6

2011 11.9 11.6 0.2 40.9 1,560.3 5.3 4.3

2012 13.7 13.4 0.2 46.4 2,446.2 8.2 5.9

2013 15.5 15.2 0.3 51.9 4,378.8 14.6 10.2

2014 17.6 17.3 0.3 58.2 5,639.2 18.6 12.9

AAGR: 2009-2014 16.7 16.7 16.0 52.9

0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

18.0

20.0

2014201320122011201020092008200720062005

0.130.25 0.37 0.57 0.67 0.90

1.562.45

4.385.64

2.4 3.24.6

6.2

8.19.8

11.9

13.715.5

17.6

17.615.513.711.99.88.16.24.63.22.6

5.644.382.451.560.900.670.570.370.250.13

INTERNET BANKING

MOBILE BANKING

NU

MB

ER O

D S

UB

SCR

IBER

S(M

ILLI

ON

)

Figure 2: Number of Internet and Mobile Banking Subscribers, 2005-2014


With such growth, transactions naturally jumped, growing by an AAGR of 26.0% for Internet banking and 144.3% for mobile banking over the last fi ve years; see Table 6. In credit card transactions recorded an AAGR of 4.6% while debit card payments overtook it by growing at an AAGR of 43.4%. Debit card transaction values show related growth at 39.7%, attesting its growing demand and popularity. This could be because the debit card is supported by the savings account that has a signifi cantly wider base compared to the credit card system which requires that certain criteria be met before the issuance of the card. The charge card market continued its downtrend with a negative growth.

Meanwhile e-money demand is also on the rise. Long in use, ATM cash withdrawals continued its growth as did the number of transactions, both in terms of volume and value.

Consequently, the growth in electronic payment methods has led to an increase in the risks of electronic payment fraud. In 2013, three out of every fi ve organizations in the United States were victims of attempted or successful payments fraud. The Association of Financial Professionals survey also noted that 63 percent of organizations reported either adopting new security measures or had plans to do so in the near future. In Malaysia, Symantec reports that similar vulnerabilities are faced.

Consumption, investment and trading in ICT stimulates further economy growth, employment and salary growth.


32 33

Table 6: Volume and Value of Online Transactions, 2005-2014


The Symantec Internet Security Threat Report 2012 and 2013 cited a few key areas of concern: The 2012 report stated that:i. Half of all attacks are targeted at small businesses that are more easily penetrable than big

companies. Small business also have a valuable database of customer and client information, intellectual property details and deposits in the bank

ii. Malware creators take on the big brother role, spying, tracking movements and stealing personal information such as banking particulars, contact details, professional interests etc.

YearCredit card Charge card Debit card E-money ATM payment ATM Cash

WithdrawalsMobile Banking

Internet Banking

Volume of Transactions (million)

2005 184.6 6.3 2.1 365.6 3.6 288.4 0.4 21.6

2006 208.8 6.0 4.2 517.0 1.8 313.9 0.9 33.5

2007 237.7 5.6 9.1 613.1 20.6 378.4 1.4 62.6

2008 261.4 5.6 10.7 688.6 21.5 470.9 1.6 84.9

2009 276.1 5.0 11.3 717.2 24.7 502.3 2.5 110.2

2010 294.9 4.7 18.3 699.3 38.8 518.8 2.3 153.3

2011 316.9 3.9 25.1 804.8 42.1 556.8 13.6 198.4

2012 325.3 4.1 36.0 923.0 46.4 565.7 59.8 227.3

2013 332.4 4.0 49.4 1,048.0 45.3 526.5 140.4 269.8

2014 345.9 4.4 68.5 1,175.0 53.7 579.2 213.9 350.7

AAGR (2009-2014) 4.6 2.6 43.4 10.4 16.8 2.9 144.3 26.0

Value of transaction

RM billions RM millions RM billions

2005 40.9 2.2 0.3 1.0 3,827.3 123,430.0 4.5 259.1

2006 47.6 2.3 0.6 1.3 2,146.2 144,654.9 10.5 334.8

2007 56.2 2.4 1.1 1.6 23,314.1 175,293.6 21.2 417.8

2008 65.3 3.1 2.0 2.1 19,189.5 216,191.6 71.5 624.4

2009 69.3 3.8 2.8 2.2 19,773.7 236,211.7 140.9 702.0

2010 79.8 4.7 4.7 2.7 31,285.6 255,308.7 137.9 1,415.4

2011 88.8 5.4 6.3 3.5 37,283.3 279,484.7 852.1 1,934.2

2012 94.1 6.5 8.6 4.2 40,950.3 294,149.1 4,236.6 2,978.4

2013 99.7 7.2 11.5 4.9 44,208.0 286,491.2 9,242.7 3,457.6

2014 105.5 8.6 14.7 5.3 54,671.6 315,144.5 14,677.5 4,108.3

AAGR (2009-2014) 8.8 17.5 39.7 19.1 22.6 5.9 153.3 42.4

iii. Vulnerabilities in mobile operating systems have increased by 58% within a year from 2011 to 2012 because of the openness of the platform and multiple distribution methods available to application.

iv. Stuxnet, Elderwood Gang virus promoters have used zero-day vulnerabilities strategies for their attacks.

v. It is diffi cult to prove hacking activities, despite people claiming responsibility.

The 2013 report noted that:i. Signifi cant attention was given to cyber espionage, threats to privacy and acts of malicious

insiders. Special attention is required in some areas as attacks grew and evolved. Ransomware attacks rose by 500% and perpetrators are turning to the Internet of Things

ii. The number of targeted attack campaigns increased by 91% in 2013 with the length of these campaigns being three times longer than campaigns in 2012;

iii. Attacks were made against government sites and the services industry. The mining and manufacturing industries were at most risk

iv. The total number of data breaches in 2013 was 62% higher than in 2012 with 253 breaches. Of these 8 mega breaches exposed more than 10 million identities

v. Scammers continued to leverage profi table ransomware scams in which the attacker pretends to be from law enforcement, demanding a fake fi ne of between $100 and $500

vi. A wide variety of Internet-connected devices such as baby monitors, security cameras and routers were hacked in 2013. While the benefi t to attackers is still unclear the risk is very real especially with Internet of Thing (IoT) devices.

Since wires, and credit/debit cards are increasingly vulnerable to a growing array of fraud risks, banks are challenged to provide a sophisticated technology strategy for fraud detection and prevention. As consumers’ preferences continue to shift toward mobile and apps for daily banking activities, fi nancial fraud has become increasingly complex and recurrent across all banking channels. Criminals today coordinate fraud schemes across all transaction channels and threshold detection systems often cannot keep up with the wide array of attacks on data and data sources.

The wide range of access points for fi nancial information -- including smartphones, tablets, offi ce, and home computers -- provide fraudsters an array of options to plan and execute their attack. To keep up with this rapidly growing threat, banks must evolve from the traditional, siloed method of fraud detection to a proactive, analytic approach. A strategic approach to electronic payments fraud prevention will help banks move away from the ineffective and ineffi cient manual processes still widely in place today.

Many institutions perform manual reviews of transactions prior to initiation, an approach that is laborious, not scalable, and signifi cantly more error-prone than an automated strategy. For electronic payments fraud prevention strategies to be successful, the processes must be tightly integrated with transaction processing systems. This integration enables real-time interdiction, reduces “swivel chair” activity between systems and creates tailored actions that are called automatically, based on policy. Automated systems can provide a more comprehensive view of customer behaviour by leveraging analytic calculations and algorithms to detect and fl ag suspicious payments activity.


34 35

As fi nancial criminals evolve, so too must electronic payments security models. A layered security model is one answer to this challenge. Layered security is characterized by the use of different controls at different points in the transaction process so that a weakness in one control is generally compensated for by the strength of a different control. For example, behaviour profi ling and fraud alerts are two critical components of transaction monitoring, while phishing site detection and pre-emptive forensics are typically involved in mitigating website fraud. Should one of these capabilities be compromised, the others are still in place, working together to detect and prevent the fi nancial fraud action or attempt.

Despite considerable advances in digital payments technology, the risk of fi nancial fraud remains and, in fact, is growing daily. For banks to stay ahead of these increasingly sophisticated criminals, robust, responsive, and automated technology is key. Banks that implement an integrated real-time fraud detection and prevention system with data analytics capabilities will be well positioned to repel malicious attacks using their strengthened electronics payments fraud defences.

KEY CHALLENGES IN THE ICT SECTORAlthough moving forward, the Malaysian ICT sector still faces challenges. One main issue is the shortage of quality and competent ICT graduates who can meet industry requirements. There is also a negative perception of low employment opportunities in the ICT fi eld and a lack of professional recognition and accreditation equivalent to other professions i.e. doctors, engineers, lawyers and accountants.

Higher up the chain at industry level, the uptake of globally recognised certifi cations such as the Capability Maturity Model Integration (CMMI) and People Capability Maturity Model (PCMM) still remains low. These are crucial for globalising local ICT products and services. The industry is also still plagued by poor R&D, innovation, patenting and commercialisation efforts.

Meanwhile, job hopping is a rampant problem, coupled by a tight labour environment, and ICT talent is also being lost through cross border migrations. Low awareness and the slow adoption of emerging new technologies, applications and business models add to the situation too. Aside from all the already mentioned issues the ICT industry has to battle with the new challenges that are surfacing with increasing digitalisation such as internet and mobile bank and associated e-payment services.

SECTION C:

ICT SALARY TRENDS & REGIONALBENCHMARKING

The average monthly salary of an ICT professional in Malaysia in 2014 was RM7,706 (Figure 1) over the RM7,512 in 2013. This 7.7% increase is well above the average national increase. The 2012 Household Income Survey found the average monthly income of Malaysian households rising from RM4,025 in 2009 to RM5,000 in 2012, an increase of 24.2%. In comparison the Malaysian ICT professionals enjoyed a pay hike of 28.3%, affording them a comfortable lifestyle despite infl ation rates.

3,000

4,000

5,000

6,000

7,000

8,000

9,000

2015201420132012201120102009200820072006

4,1844,443

4,8075,200

5,626

6,2386,667

7,512

7,706

8,278

7.4%7.7%

6.2%8.2%

8.2%8.2%

10.9%6.9%

7.1%

Note: The past data for the period 2006-2014 has been smoothened for gauging the inherent trends that is critically important for making more realistic projection for the year 2014.

Figure 1: Average Monthly Salary of ICT Professionals in Malaysia: 2006-2015

Source: Jobstret.com and PIKOM, 2014

Assuming the economy and the ICT industry remain, PIKOM anticipates that 2015 will see similar growth with a potential 7.4% salary increase for ICT professionals to no less than RM8,278 per month.

All ICT job categories registered signifi cant salary increases in 2014.

As before, senior management enjoyed the highest increase at 9.5% followed by junior executives at 8.1%. Senior executives and middle management with at least 5 years’ experience also fared well. In comparison, fresh graduates continued to clock in the lowest rise at 5.9% with salaries going from RM2,438 to RM2,581 in 2014.


36 37

Table 1 also shows average salary projections by job category for 2015. PIKOM anticipates a higher rate of salary growth for executives in the junior and senior level by 15.4% and 10.4% respectively. With job hopping rampant at the executive level, higher remuneration is one way to mitigate this problem.

Table1: Average Salary of ICT Professionals by Job Category: 2010-2015

Source: Jobstreet.com and PIKOM, 2014

Average salary gaps keep widening in all job categories. Senior Managers earned salaries 6.22 times more than fresh graduates in 2014, a gap higher than in fi ve years ago. The fi gures for middle management also showed a wider gap. These fi gures indicate a widening disparity in the ICT salary structure when compared with the salary of fresh graduates.

INDUSTRY CATEGORYFresh GraduatesThe Semiconductor and Wafer Fabrication industries paid the highest monthly salary of RM3,280 for fresh graduates in 2014 (Table 2). However the fi gure is not very different from 2012. However, the Electrical & Electronics, Banks and Automotive and Heavy Industries Manufacturing sectors registered double digit growths in the monthly salary for fresh graduates of 25.1%, 18.6% and 10.9% respectively.

Year

Fresh Graduate (Entry Level)

Junior Executive: (1-4 Years Working Experience)

Senior Executive: (≥ 4 Years Working Experience)

Middle Management (Manager)

Senior Management:

(Senior Manager)

Overall (Smoothened

Series)

Ringgit Malaysia (RM)

2010 2,181 2,936 4,514 7,005 10,795 5,626

2011 2,238 3,151 5,039 7,837 12,166 6,238

2012 2,324 3,205 5,344 8,434 13,674 6,667

2013 2,438 3,439 5,744 8,986 14,661 7,142

2014 2,581 3,719 6,157 9,591 16,057 7,706

2015 2,752 4,291 6,819 10,421 17,107 8,278

Percentage Change (%): 2013-2014 5.9 8.1 7.2 6.7 9.5 7.9

Projected % Change: 2014-2015 6.6 15.4 10.7 8.7 6.5 7.4

AAGR: 2010-2014 4.3 6.1 8.1 8.2 10.4 8.2

Comparing Against Average Monthly Salary of Fresh Graduates

2010 1.00 1.35 2.07 3.21 4.95 2.58

2011 1.00 1.41 2.25 3.50 5.44 2.79

2012 1.00 1.38 2.30 3.63 5.88 2.87

2013 1.00 1.41 2.36 3.69 6.01 2.93

2014 1.00 1.44 2.39 3.72 6.22 2.99

2015 1.00 1.56 2.48 3.79 6.22 3.01

Table 2: Average Monthly Salary of Fresh Graduates / Entry Level of ICT Professionals by Industry: 2012-2014

Source: Jobstreet.com and PIKOM, 2014 By Job Category

Junior ExecutiveJunior executive ICT professionals with between one to four years of working experience netted an average increase in salary by 8.1%, moving up from RM3,419 in 2013 to RM3,719 in 2014 (Table 3). Seven industries registered double increase in ICT salary in 2014, namely Science/ Technology /Aerospace / Bio-technology (22.6%), Business and Technical Consulting (20.6%), Computer / IT Software (19.1%), Bank (17.4%), Financial Services / Securities / Insurance (17.4%), Call Centre / IT Enabled Services (13.9%) and Telecommunications (10.6%).

Average monthly salary of ICT professionals grew by 7.7% in 2014 and is projected to register lower growth at 7.4% in 2015 due to the weakening economy.

Industry

2014

2014 2013 2012Percentage

Change:2013-201425th

Percentile(RM)

50th Percentile

(RM)

70th Percentile

(RM)

Electrical & Electronics 1,950 2,850 3,175 2,931 2,343 2,343 25.1

Bank 2,000 2,750 3,250 2,875 2,425 2,425 18.6

Automotive/ Heavy Industry/ Machinery 1,800 3,000 3,250 3,063 2,763 2,175 10.9

Call Center/ IT-Enabled Services 1,800 2,500 2,800 2,575 2,375 2,275 8.4

Computer/ IT (Software) 2,200 2,600 3,250 2,763 2,553 2,450 8.2

Transport/Storage/ Freight/ Shipping 1,800 2,450 2,800 2,538 2,375 2,250 6.8

Education 1,800 2,310 2,800 2,433 2,305 1,983 5.5

Oil/ Gas/ Petroleum 2,300 2,800 3,200 2,900 2,775 2,775 4.5

Computer/ IT (Hardware) 2,000 2,400 2,740 2,485 2,385 2,368 4.2

Construct ion/Building 2,000 2,400 2,775 2,494 2,394 2,023 4.2

Financial Services/ Securities/ Insurance 2,000 2,400 2,800 2,500 2,400 2,350 4.2

Telecommunication 1,921 2,300 2,600 2,375 2,280 2,150 4.2

Consulting (Business/ Technical) 2,100 2,500 3,000 2,625 2,525 2,325 4.0

Manufacturing 2,150 2,540 3,000 2,655 2,558 2,508 3.8

Wholesale/Retail/Trading 1,700 2,000 2,300 2,075 2,000 1,925 3.8

Hotel/Restaurant/Food Service 1,800 1,870 3,750 2,340 2,288 2,288 2.3

Services 1,900 2,030 2,800 2,223 2,190 2,115 1.5

Printing/Publishing 2,000 2,000 3,200 2,300 2,300 2,300 0.0

Science & Technology/ Aerospace/ BioTechnology 2,500 2,500 2,500 2,500 2,500 2,500 0.0

Semiconductor/Wafer Fabrication 3280 3280 3280 3,280 3,280 3,280 0.0

Geometric Mean 2,581 2,438 2,324 5.9

Minimum 2,075 2,000 1,925 3.8

Maximum 3,280 3,280 3,280 0.0


38 39

Table 3: Average Monthly Salary of Junior ICT Executive by Industry: 2012-2014


Senior ExecutiveSimilarly senior ICT executives also recorded signifi cant increase in an average salary by 7.2% from RM5,744 in 2013 to RM6,157 in 2014 (Table 4). This encompassed industries such as call centres, IT enabled services, construction and building, IT software and electronics, among others.

Industry

2014


Change:2013-2014

25th Percentile

(RM)

50th Percentile

(RM)

70th Percentile

(RM)

Science & Technology/Aerospace/ BioTechnology 3,600 3,850 4,000 3,888 3,171 3,069 22.6

Consulting (Business/Technical) 3,000 3,600 4,500 4,041 3,350 3,283 20.6


Bank 3,000 3,500 4,500 4,160 3,543 3,475 17.4




Education 2,500 3,000 3,600 3,150 2,888 2,575 9.1


Services 2,500 3,400 3,600 3,450 3,225 3,119 7.0

Construction/ Building 2,500 3,303 3,500 3,352 3,152 2,950 6.4

Property/ Real Estate 2,750 3,000 4,700 3,425 3,225 3,215 6.2

Agriculture/ Plantations/Aquaculture 3,030 3,900 3,900 3,900 3,683 2,305 5.9

Automotive/ Heavy Industry/ Machinery 2,800 3,950 3,663 3,878 3,663 3563 5.9

Semiconductor/Wafer Fabrication 3,425 3,750 4,600 3,963 3,753 3,753 5.6




Manufacturing 2,800 3,200 3,966 3,392 3,292 3,157 3.0

Hotel/Restaurant/Food Service 2,750 3,140 4,000 3,355 3,258 2,575 3.0

Wholesale/ Retail/Trading 3,000 3,350 4,000 3,513 3,425 3,425 2.6

Utilities 3,000 3,320 3,800 3,440 3,360 3,226 2.4

Chemical 4,500 4,600 7,646 5,362 5,337 5,215 0.5


Geometric Mean 3,719 3,439 3,205 8.1

Minimum 3,150 2,888 2,305 9.1

Maximum 5,362 5,337 5,215 0.5

Table 4: Average Monthly Salary of Senior ICT Executive by Industry: 2012-2014


Middle Management (Manager)For middle management the average rise was 6.7% from RM8,986 in 2013 to RM9,591 in 2014 (Table 5). In this job category, the industries that registered double digit growths include Computer / IT Software (20.8%), Electrical & Electronics (20.2%) and Business and Technical Consulting (13.4%) and Education (13.0%) ; see Table 5.

Industry

2014


Change:2013-2014

25th Percentile

(RM)

50th Percentile

(RM)

70th Percentile

(RM)





Science & Technology/Aerospace/ BioTechnology 5,650 6,750 8,000 7,063 6,500 6,500 8.7

Bank 4,700 5,800 7,000 6,319 5,825 5,575 8.5


Agriculture/ Plantations/Aquaculture 5,500 8,150 11,250 8,925 8,263 5,033 8.0

Education 3,600 4,300 5,000 4,475 4,165 4,100 7.4

Manufacturing 4,300 5,843 7,300 6,207 5,822 5,298 6.6



Semiconductor/Wafer Fabrication 4,500 5,900 7,200 6,225 5,875 5,563 6.0






Services 4,500 5,500 6,650 5,788 5,538 5,213 4.5



Utilities 4,402 5,000 6,400 5,350 5,201 5,201 2.9

Hotel/ Restaurant/Food Service 4,300 4,800 9,800 6,050 5,925 4,80 12.1

Chemical 7,300 7,878 10,302 8,484 8,340 7,107 1.7

Geometric Mean 6,157 5,744 5,344 7.2

Minimum 4,475 4,165 4,100 7.4

Maximum 8,925 8,340 7,500 7.0


40 41

Table 5: Average Monthly Salary of Middle Management (Manager Category) ICT Professionals by Industry: 2012-2013

Source: Jobstreet.com and PIKOM Estimates, 2014

Industry

2014


Change:2013-2014

25th Percentile

(RM)

50th Percentile

(RM)

70th Percentile

(RM)

Computer/ IT {Software) 7,000 8,150 10,000 9,268 7,675 7,575 20.8



Education 6,000 7,000 9,500 7,625 6.750 5,225 13.0

Call Center/ IT-Enabled Services 7,500 8,900 10,950 9.782 9.025 9025 8.4

Agriculture/ Plantations/Aquaculture 7,000 9,603 9.700 9,627 8,977 8977 7.2

Services 8,532 12,000 15,500 12,875 12,008 9,833 7.2

Transport/Storage/ Freight/Shipping 6,600 9,000 10,400 9,350 8.750 8,600 6.9

Hotel/ Restaurant/Food Service 6,000 8,000 8,900 8,225 7.725 7,237 6.5


Bank 7,000 8,849 10,400 9,237 8,775 8,494 5.3


Wholesale/ Retail/Trading 8,050 10,000 11.785 10,446 9,959 9,959 4.9


Semiconductor/Wafer Fabrication 9,000 11,000 13.730 11,683 11,183 11,183 4.5

Oil/Gas/ Petroleum 9,100 11,000 13,000 11,500 11,025 10,504 4.3

Financial Services/Securities/ Insurance 7,200 8,600 9,500 8,832 8,475 8,285 4.2

Computer/ IT (Hardware) 6,500 7.700 11,200 8,575 8,275 6,800 3.6

Telecommunication 7.700 9,000 10.710 9,428 9,103 8,693 3.6

Manufacturing 6,980 8,200 11,500 9,025 8.720 8,345 3.5


Utilities 7,000 7,600 8,000 7.700 7,550 7,244 2.0


Geometric Mean 9,591 8,986 8,434 6.7

Minimum 7,200 6,750 5,225 6.7

Maximum 171406 141475 141091 20.2

Salary disparities among ICT professionals have been widening; those in the Senior Manager category tend to net higher salaries than their counterparts in the lower categories, which perhaps could be attributed to the higher demand for experienced professionals who are hard to come by in the Malaysian ICT industry.

Industry

2014


Change:2013-2014

25th Percentile

(RM)

50th Percentile

(RM)

70th Percentile

(RM)

Computer / IT (Software) 8,200 11,000 14,175 17,741 11,094 10,375 59.9




Automotive/Heavy Industry/ Machinery 14,100 20,000 20,800 20,200 18,725 17,438 7.9

Transport/Storage/ Freight/Shipping 15,000 19,500 20,000 19,625 18,500 13,865 6.1


Bank 10,045 13,000 19,800 14,700 13,961 13,961 5.3

Financial Services/Securities/ Insurance 10,045 13,000 19,800 14,700 13,961 13,961 5.3

Manufacturing 11,429 14,000 17,350 14,838 14,195 14,150 4.5


Oil/Gas/Petroleum 14,055 16,000 20,000 17,000 16,521 16,521 2.9


Education 8,500 9,000 12,500 9,875 9,750 8,125 1.3

Services 13,000 14,500 15,000 14,625 14,625 14,625 0.0

Geometric Mean 16,057 14,661 13,674 8.9

Minimum 9,875 9,750 8,1 25 1.3

Maximum 21,546 18,725 18,1 25 15.1

Senior ManagementOverall, the ICT senior manager category registered a 8.9% increase from RM14,661 in 2013 to RM16,057 in 2014 (Table 6). Three industries namely computer / IT software, Computer / IT Hardware and Business and Technical Consulting registered signifi cant double digit growth rate of 59.9%, 23.8% and 16.3% respectively.

Table 6: Average Monthly Salary of Senior Management ICT Professionals by Industry: 2012-2013


ICT Salary Trends by Industry : 2011-2014Looking at trends, the salaries of ICT professionals in seven industries have been registering double digit growth rates (Table 7). These are: Call Centre / IT-Enabled Services (19.9%), Agriculture / Plantations / Aquaculture (19.7%), Automotive / Heavy Industry / Machinery (17.7%), Science / Technology / Aerospace / Bio Technology (11.9%) , Computer / IT Hardware (11.7%), Computer / IT Software (11.3%) and Transport / Storage/ Freight / Shipping (10.8%) respectively. Unexpectedly, industries such as Semiconductor / Wafer Fabrication, Oil/ Gas / Petroleum and Wholesaling and Retailing recorded growth of less than 3% growth over the past four years, although salaries here are relatively high.


42 43

ALL JOB CATEGORIES

Industry 2011 2012 2013 2014 AAGR: (2011-2014)

Call Center / IT-Enabled Services 4,742 5,028 7,596 8,171 19.9

Agriculture/Plantations/ Aquaculture 3,275 3,405 4,184 5,613 19.7

Automotive/Heavy Industry/Machinery 5,168 7,289 7,903 8,428 17.7

Science & Technology/Aerospace/BioTechnology 6,200 7,259 8,089 8,685 11.9

Computer/ IT (Hardware) 5,929 6,489 7,276 8,273 11.7

Computer/ IT (Software) 5,762 5,936 5,999 7,934 11.3

Transport/Storage/Freight/Shipping 6,170 6,748 7,917 8,401 10.8

Electrical & Electronics 5,928 6,152 6,320 7,413 7.7

Chemical 5,601 6,087 6,838 6,923 7.3

Education 4,516 4,601 5,172 5,512 6.9

Services 6,396 7,034 7,755 7,792 6.8

Financial Services/Securities/ Insurance 6,105 6,841 6,841 7,302 6.2

Consulting (Business/Technical) 6,258 6,541 6,837 7,454 6.0

Construction/Building 4,276 4,436 4,757 5,078 5.9

Property/Real Estate 5,084 5,104 5,708 5,975 5.5

Utilities 4,725 4,953 5,370 5,497 5.2

Bank 6,459 6,923 6,923 7,458 4.9

Hotel/Restaurant/Food Service 4,436 4,473 4,799 4,993 4.0

Telecommunication 6,848 7,099 7,177 7,567 3.4

Manufacturing 6,552 6,666 6,917 7,223 3.3

Semiconductor/Wafer Fabrication 5,803 6,157 6,222 6,288 2.7

Oil/ Gas/Petroleum 8,021 8,316 8,324 8,655 2.6

Printing/Publishing 4,075 4,204 4,223 4,379 2.4

Wholesale/Retail/Trading 6,608 6,682 6,752 6,822 1.1

Table 7: Average Monthly Salary Trend of ICT Professionals by Industry: 2011-2014


TOP FIVE PAYING INDUSTRIESOf the 25 industries covered in the study, the results showed that the Oil, Gas and Petroleum industry emerged as one of the top fi ve industries in all the categories except in the senior management segment (Table 8). Also, besides the oil / gas /petroleum sectors, the science & technology / aerospace / bio-technology, transport / storage / freight / shipping, automotive / heavy industry / machinery and services sectors all showed up as the most lucrative industry segments for ICT professionals in the country.

Table 8: Top Five Paying Industries by Category, 2014


ICT INDUSTRY SEGMENTSThe three industry segments namely ICT hardware, ICT software and ICT-enabled services including call centres are not only users but also suppliers of ICT services to other industries. ICT professionals working in these segments typically tend to have specifi c and higher technical capabilities than those who work in purely ICT user environments such as banking, insurance, oil and gas, transportation et cetera.

The average monthly salary of ICT professionals during the period 2008-2014, shows that the Senior ICT Manager category in the ICT hardware segments recorded the highest average salary increase of 22.7%, moving the fi gures up from RM7,971 in 2008 to RM21,546 in 2014 (Table 9). This is followed again by the ICT Senior Manager category for ICT Software Manager and Call Centre / ICT Enabled Services that registered AAGR of 15.9% and 11.6% respectively.

Industry All Category Industry Senior Executive

Science & Technology/Aerospace/ BioTechnology 8,685 Agriculture/ Plantations/Aquaculture 8,925

Oil/ Gas/ Petroleum 8,655 Chemical 8,484

Automotive/ Heavy Industry/ Machinery 8,428 Oil/ Gas/ Petroleum 8,000

Transport/Storage/ Freight/Shipping 8,401 Science & Technology/Aerospace/BioTechnology 7,063

Computer/ IT (Hardware) 8,273 Telecommunication 7,000

Industry Fresh Graduates Industry Middle

Management

Semiconductor/Wafer Fabrication 3,280 Electrical & Electronics 17,406

Automotive/ Heavy Industry/Machinery 3.063 Services 12.875

Electrical & Electronics 2,931 Semiconductor/Wafer Fabrication 11,683

Oil/ Gas/ Petroleum 2,900 Oil/ Gas/ Petroleum 11,500

Bank 2,875 Wholesale/Retail/Trading 10,446

Industry Junior Executive Industry Senior

Management

Chemical 5,362 Computer/ IT (Hardware) 21,546

Bank 4, 160 Automotive/ Heavy Industry/Machinery 20,200

Financial Services/ Securities/ Insurance 4, 160 Science &Technology/Aerospace/ BioTechnology 19,800

Consulting (Business/Technical) 4,041 Transport/Storage/ Freight/ Shipping 19,625

Semiconductor/Wafer Fabrication 3,963 Call Center/ IT-Enabled Services 18,500


44 45

Table 9: Average Monthly Salary by Category in ICT Industry Segment of ICT Professionals by Job Category: 2008-2014


ICT SERVICE PROVIDERS AND ICT USER INDUSTRIESOf the 25 industry segments assessed in this compilation, the ICT sector comprised fi ve segments namely ICT hardware, ICT software and ICT-enabled services including call centres, telecommunications, electrical and electronics, semiconductor and wafer fabrication. The rest are considered ICT user industries. It appears that ICT professionals working in the core ICT sector tend to earn higher incomes than their counterparts in the ICT user segments. However, the data in hand did not adequately support this. Specifi cally, it can be seen in Figure 2 that generally there is no distinct difference in salaries earned by ICT professionals in these two segments except in the senior executive category where the average salary in the ICT user industries was marginally higher compared to their counter parts working in the ICT core sector.

Year

ICT Junior Executive ICT Senior Executive

ICT Hardware ICT SoftwareCall Centre / ICT Enabled

ServicesICT Industry ICT Hardware ICT Software

Call Centre / ICT Enabled

ServicesICT Industry

2008 2,325 2,500 2,500 2,440 3,400 3,924 3,749 3,684

2009 2,767 2,557 2,748 2,689 4,130 3,869 4,190 4,061

2010 2,720 2,750 2,925 2,797 4,320 4,505 4,428 4,417

2011 3,002 3,025 3,225 3,082 4,769 5,019 4,556 4,778

2012 3,100 3,063 3,225 3,129 4,835 5,160 4,750 4,912

2013 3,213 3,275 3,400 3,295 5,110 5,400 5,054 5,186

2014 3,350 3,900 3,874 3,699 5,410 5,999 6,125 5,836

AAGR2008-2014 7.6 9.3 9.2 8.7 9.7 8.9 10.3 9.6

Year

ICT Middle Manager ICT Senior Manager

ICT Hardware ICT SoftwareCall Centre / ICT Enabled

ServicesICT Industry ICT Hardware ICT Software

Call Centre / ICT Enabled

ServicesICT Industry

2008 5,075 5,995 6,538 5,837 7,971 8,475 10,700 8,975

2009 5,052 5,930 4,018 4,939 9,405 8,998 11,350 9,567

2010 6,625 6,646 7,548 6,957 10,900 9,250 12,758 10,876

2011 6,718 7,263 8,051 7,322 14,475 10,000 13,779 12,588

2012 6,800 7,575 8,300 7,533 17,400 10,600 15,019 14,044

2013 8,275 7,675 9,025 8,307 17,400 11,094 18,125 15,181

2014 8,575 9,268 9,782 9,195 21,546 17,741 18,500 19,194

AAGR 2008-2014 11.1 9.1 8.4 9.5 22.0 15.9 11.6 16.4

0

2000

4000

6000

8000

10000

12000

14000

16000

18000

20000

Senior ManagerManagerSenior ExecutiveJunior ExecutiveFresh Graduates

1808210688607437452719

18082

10688

6074

37452719

153789231618437102524

15378

9231

6184

37102524

ICT SECTORNON-ICT SECTOR

RIN

GG

IT M

ALAY

SIA

Figure 2 : Average Monthly ICT Salary by ICT Sector and Non-ICT Sector by Job Category, 2014


SALARY TREND : CHIEF INFORMATION OFFICER (CIO) / CHIEF TECHNOLOGY OFFICER (CTO)The Jobstreet.com and PayScale.com salary data essentially depict the salary performance of those ICT professions at the operational and tactical or planning levels. However, in recent years, new titles of IT leadership have also emerged. Common titles today include Chief Information Offi cer (CIO) and Chief Technology Offi cer (CTO) and the not-too-common ones include Chief Analytics Offi cer (CAO) and Chief Data Offi cer (CDO). In the mid-1980s, the CIO / CTO role was primarily a technical job. As the storage, transmittal and analysis of electronic information became more important to industries of all types, CIOs have come to be viewed as key contributors to formulating strategic goals.

Thus, these positions and roles have not only further strengthened the governance of IT organizations but each has very specifi c roles and responsibilities. These roles especially the CIO role has over the years evolved from largely a technical role to one increasingly focused on business strategy and alignment. In many organizations, these IT executive positions report directly to the Chief Executive Offi cer (CEO) by assuming the following generic functions:- • understanding the business requirements, developing the ICT strategy and budgetary

information to support the requirements; • introducing an informed vision of how ICT strategy could support transformational change by

horizon scanning and strategic planning;• management and planning of ICT including policy and practice development, planning,

budgeting, resourcing, training etc.

As a result of their increased strategic responsibilities, CIOs in large organizations will typically delegate the oversight of day-to-day IT operations to a technology deputy and rely on a team of specialists to manage specifi c areas of IT. In a 2015 survey of 2,810 CIOs by Gartner Inc.,


46 47

nearly half of CIOs globally said they have a “chief operating offi cer of IT” in place to perform this function. Notably the youngest CIO in the PIKOM CIO Member Chapter is at 33 years old and oldest is 55 years old. However, a typical CIO would have easily accumulated at least 20 years’ of working experience in ICT.

Whilst there are no specifi c degrees or disciplines to tie with these positions, a post graduate or master degree in management and business are often viewed favorably. However, an important success factor in these positions would still be possession of business acumen. As for CAO and CDO, again whilst there are no specifi c qualifi cations, most would have advanced degrees in mathematics, statistics and economics or an MBA with focus on analytical or quantitative methods. It can be concluded that IT leaders and management today cannot just rely alone on their technical skills to support the dynamic nature of their organizations and to stay ahead of their competition.

Table 10 provides the maximum and minimum salaries of ICT professionals assuming managerial roles in an organization. As highlighted, job functions like CIO/CTO or IT Director or Project Manager or IT Programme managers assume strategic roles and job functions such as Service Delivery Manager, Infrastructure Manager, Software Development Manager, Business Analyst Manager and Test Manager are likely to be at operational of tactical functions.

As expected, those in the strategic roles are paid much higher than those at the tactical levels. As it can be seen in Table 10, the maximum monthly salary of CIO / CTO in Malaysia was RM35,000 in 2012 and is expected to touch RM45,000 via an AAGR of 8.7%. Interestingly, Table 10 showed that the minimum monthly salary for CIO/CTO remained at RM29,167 during 2012-2015; no change!

As indicated in Table 10, both the maximum and minimum salaries earned by ICT Project Manager underwent drastic changes by registering increases of 23.3% and 20.5% respectively during the 2012-2015 period, indicating fast growing demand for these functions. Understandably, the demand for infrastructure manager is also on the rise as companies move their infrastructure and security into the cloud environment. As cited by Robert Walters, they are also paid better as shown by an increase of 12.6% during this period.

Table 10: Maximum and Minimum Monthly Salary of CIO / CTO and Comparison Against Other ICT Managerial Functions

Source: Robert Walters Salary Survey and PIKOM Estimates

MANAGEMENT2012 2013 2014 2015 AAGR:

2012-2015 2012 2013 2014 2015 AAGR: 2012-2015

Maximum Monthly Salary (RM) % Minimum Monthly Salary (RM) %

Chief Technology Offi cer / Chief Information Offi cer 35,000 45,000 45,000 45,000 8.7 29,167 29,167 29,167 29,167 0.0

IT Director 29,167 35,000 35,000 35,000 6.3 23,333 23,333 23,333 23,333 0.0

Project Manager 16,000 18,000 18,000 30,000 23.3 10,000 10,000 10,000 17,500 20.5

IT Programme Manager 21,667 25,000 25,000 25,000 4.9 18,000 18,000 18,000 18,000 0.0

Service Delivery Manager 18,000 18,000 20,000 23,333 9.0 10,000 10,000 10,000 10,000 0.0

Infrastructure Manager 14,000 14,000 14,000 20,000 12.6 10,000 10,000 10,000 10,000 0.0

Software Development Manager 14,000 15,000 15,000 18,000 8.7 10,000 10,000 10,000 10,000 0.0

Business Analyst Manager 12,000 14,000 14,000 15,000 7.7 7,500 7,500 7,500 8,000 2.2

Test Manager 13,000 13,000 13,000 13,000 0.0 8,500 8,500 10,000 10,000 5.6

Among the managerial functions, test managers were paid the lowest, as shown in Table 11; maximum salary remained unchanged at RM13,000, but minimum salary registered an increase with an AAGR of 5.6% from RM8,500 in 2012 to RM10,000 in 2015. Comparing against the test manager category, the CIO / CTO earned 2.69 times higher in 2012 and increased to 3.46 in 2015, indicating a widening gap at the high end. Interestingly, the gap narrowed from 3.43 to 2.92 during the period under study at the minimum salary level.

Table 11: Benchmarking Maximum and Minimum Monthly Salary of CIO / CTO and Against Other ICT Managerial Functions

Source: Robert Walters Salary Survey and PIKOM Estimates

REGIONAL BENCHMARKINGWe also did a comparison of Malaysian ICT salaries against other English speaking countries with a scaling factor free from the bias of foreign exchange fl uctuations (Table 11). For this benchmarking exercise, Malaysia assumes a scaling factor of one and the median data published by PayScale for the year 2014 was used. All measurements are tallied in US dollars. The average value for each country was compiled after taking into consideration four typical job functions, namely Project Manager (IT – managerial), IT Manager (Technical), IT Consultant and IT Director. The roles of these job functions are uniformly defi ned by Payscale.com in the countries under study and critical for meaningful comparisons. Two types of benchmarking scales were published, specifi cally one with purchasing power parity (PPP) that takes into account infl ation rates and fl uctuations in the foreign exchange rate and the other without PPP adjustment. Indeed, technically speaking, ambitious job seekers should use PPP adjusted fi gures when searching for jobs overseas.

MANAGEMENT2012 2013 2014 2015 2012 2013 2014 2015

Maximum Monthly Salary (RM) Minimum Monthly Salary (RM)

Chief Technology Offi cer / Chief Information Offi cer 2.69 3.46 3.46 3.46 3.43 3.43 2.92 2.92

IT Director 2.24 2.69 2.69 2.69 2.75 2.75 2.33 2.33

Project Manager 1.23 1.38 1.38 2.31 1.18 1.18 1.00 1.75

IT Programme Manager 1.67 1.92 1.92 1.92 2.12 2.12 1.80 1.80

Service Delivery Manager 1.38 1.38 1.54 1.79 1.18 1.18 1.00 1.00

Infrastructure Manager 1.08 1.08 1.08 1.54 1.18 1.18 1.00 1.00

Software Development Manager 1.08 1.15 1.15 1.38 1.18 1.18 1.00 1.00

Business Analyst Manager 0.92 1.08 1.08 1.15 0.88 0.88 0.75 0.80

Test Manager 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00

The average monthly salary of a Chief Information Offi cer (CIO) or Chief Technology Offi cer (CTO) is apparently growing at an average of 8.7% per annum; currently netting RM45,000 per month at the higher end.


48 49

Malaysians are typically known for their mobility and adaptability when searching for opportunities beyond Asia. The popular choices are usually English speaking countries, in particular the United States of America, the United Kingdom, Canada, Australia and New Zealand. With, English being the lingua franca for Malaysian private businesses sector, Malaysians tend to have more business dealings with English speaking countries. The same goes for ICT professionals, especially software developers and networking engineers who are always in demand globally. ICT salary comparisons were also made against selected Middle Eastern countries where a signifi cant number of Malaysian ICT professionals seek jobs.

Comparison Based on Atlas CriterionWithout any PPP adjustment (or popularly termed as Atlas Criterion), the results showed that United States recorded the highest average salary for ICT professionals, 3.07 times more against average remuneration earned by Malaysian counterparts in 2014 (Table 12). This is followed by Australia and New Zealand at 2.86 and 2.70 times more respectively. Comparing against Asian economies, Hong Kong ranked highest at 2.42 times, followed by Singapore at 2.14 times. In the Middle East, ICT professionals the United Arab Emirates (UAE) earned 2.41 times more than their counterparts in Malaysia. This is followed by Qatar by 2.15 times, Kuwait 1.87 times and Saudi Arabia by 1.84 times. The countries that pay lower than Malaysia include the Philippines, Indonesia and India.

Comparison Based on Purchasing Power Parity Adjusted CriterionTaking into consideration the purchasing power parity criterion, the Middle Eastern countries namely United Arab Emirates (UAE) and Saudi Arabia emerged on the top of the scale, each securing a scale of 1.74 followed by Kuwait that clocked in only 1.63 times. Hong Kong was again at the Asian top with 1.58 times, followed by Singapore 1.41 times. The USA netted a score of 1.47 times which differed signifi cantly from the 3.07 recorded under Atlas Criterion. Interestingly, Canada and Australia joined the ranks of India, the Philippines and Indonesia where the benchmarking scale fell below zero, implying lower average salaries.

Benchmarking Cities against Kuala Lumpur Table 13 (Atlas Criterion) and Table 14 (PPP Adjusted Criterion) shows the benchmarking scale comparing average ICT salaries earned by IT Project Manager in 90 major cities by assuming a scale of one for Kuala Lumpur. Under Atlas Criterion the top ten cities are in the United States with Washington on top of the list. This indicates an earning power of more than 3.3 than Kuala Lumpur. However, under the PPP Adjusted criterion the top ten cities are not just centred in the United States. Payscale.com records showed that ICT professionals in DaNang earned 2.06 times more than the ICT professionals in Kuala Lumpur, followed by 1.84 times for Rayong in Thailand and 1.77 times for Kuwait city. However, it must be noted here that a substantial number of ICT professionals working in Middle East are expatriates who are paid much more than the locals. These professionals also regularly update their records with Payscale.com who provides career advancement services.

Country

ATLAS CRITERION

Project Manager, Information Technology

(IT)Information Technology

(IT) ManagerInformation Technology

(IT) Consultant AVERAGE 2014

United States 2.85 3.30 3.06 3.07

Australia 2.66 3.20 2.73 2.86

New Zealand 2.27 2.98 2.84 2.70

Hong Kong 2.33 2.94 1.99 2.42

United Arab Emirates (UAE) 2.30 2.58 2.35 2.41

United Kingdom 2.20 2.41 2.54 2.38

Canada 2.14 2.63 2.26 2.34

Qatar 2.21 2.45 1.78 2.15

Singapore 2.00 2.51 1.92 2.14

Kuwait 2.05 2.02 1.55 1.87

Saudi Arabia 1.80 2.04 1.67 1.84

China 1.37 1.69 1.90 1.65

Bahrain 1.82 1.39 1.38 1.53

Thailand 1.23 1.22 1.15 1.20

Vietnam 0.79 1.22 1.00 1.00

Malaysia 1.00 1.00 1.00 1.00

Philippines 0.72 0.76 0.50 0.66

Indonesia 0.48 0.70 0.58 0.59

India 0.63 0.63 0.49 0.58

Country

Purchasing Power Parity (PPT) Criterion

Project Manager, Information Technology

(IT)Information Technology

(IT) ManagerInformation Technology

(IT) Consultant AVERAGE 2014

United Arab Emirates (UAE) 1.66 1.87 1.70 1.74

Saudi Arabia 1.70 1.93 1.58 1.74

Kuwait 1.78 1.75 1.35 1.63

Hong Kong 1.53 1.92 1.30 1.58

Qatar 1.51 1.68 1.22 1.47

United States 1.32 1.54 1.42 1.43

Singapore 1.31 1.65 1.26 1.41

Thailand 1.44 1.42 1.34 1.40

China 1.14 1.42 1.59 1.38

Vietnam 1.06 1.64 1.35 1.35

Bahrain 1.56 1.19 1.17 1.31

New Zealand 0.91 1.19 1.14 1.08

United Kingdom 0.93 1.02 1.08 1.01

Malaysia 1.00 1.00 1.00 1.00

India 0.99 0.99 0.77 0.92

Canada 0.81 0.99 0.86 0.89

Australia 0.80 0.96 0.82 0.86

Philippines 0.80 0.84 0.55 0.73

Indonesia 0.58 0.84 0.69 0.70

Table 12: Benchmarking Salaries Earned by ICT Professionals of Selected Countries in Asia, Middle Eastern Region

and English Speaking Nations , 2014

Source: Payscale.com and PIKOM, 2014


50 51

Table 13: Benchmarking Average ICT Salaries of Cities Against Kuala Lumpur Using Atlas Criterion, 2014


Table 14: Benchmarking Average ICT Salaries of Cities Against Kuala Lumpur Using PPP Adjusted Criterion, 2014


Project Manager 1 Information Technology Project Manager 1 Information Technology

Country City Atlas Criterion Country City Atlas Criterion

United States Washington 3.33 United Kingdom Birmingham 1.93

United States New York 3.23 New Zealand Palmerston North 1.91

United States San Francisco 3.10 New Zealand Dunedin 1.86

United States Los Angeles 3.08 Saudi Arabia Riyadh 1.85

United States Houston 3.08 Bahrain Bahrain 1.81

United States Boston 3.05 United Kingdom Bristol 1.79

United States Chicago 2.95 Thailand Rayong 1.58

United States Charlotte 2.95 Vietnam Da Nang 1.53

United States Seattle 2.94 China Shenzhen 1.43

United States Dallas 2.91 Thailand Phuket 1.40

United States Atlanta 2.88 China Shanghai 1.38

United States Minneapolis 2.71 China Tianjin 1.36

United States Denver 2.71 China Hangzhou 1.14

United States Phoenix 2.70 Thailand Bangkok 1.13

Australia Sydney 2.70 China Beijing 1.12

Australia Melbourne 2.65 Thailand Chonburi 1.01

Australia Brisbane 2.64 Thailand Pattaya 1.01

United States Austin 2.61 Malaysia Kuala lumpur 1.00

Australia Adelaide 2.59 Vietnam Hanoi 0.91

Australia Perth 2.58 Malaysia Cyberjaya 0.88

United Kingdom London 2.48 China Suzhou 0.86

UAE Abu Dhabi 2.43 Philippines Taguig City 0.82

Australia Canberra 2.41 Philippines Makati City 0.77

Hong Kong Hong Kong 2.36 Philippines Manila 0.74

New Zealand Wellington 2.30 China Guangzhou 0.72

Canada Calgary 2.30 India Gurgaon 0.68

Canada Edmonton 2.28 Vietnam Ho Chi Minh City 0.68

UAE Dubai 2.27 India Pune 0.65

United Kingdom Glasgow 2.23 India Bangalore 0.65

New Zealand Auckland 2.23 India Hyderabad 0.64

Qatar Doha 2.20 India Noida 0.62

Canada Toronto 2.20 India Mumbai 0.60

New Zealand Christchurch 2.15 India Chenai 0.59

United Kingdom Edinburgh 2.11 India Kolkota 0.59

Canada Ottawa 2.11 Vietnam VungTau 0.58

Canada Mississauga 2.08 Philippines Cebu City 0.57

United Kingdom Manchester 2.08 India New Delhi 0.53

United Kingdom Aberdeen 2.07 India Trivandram 0.52

Canada Vancouver 2.05 Philippines Pasig City 0.51

Kuwait Kuwait 2.03 Thailand Ayutthaya 0.50

Australia Gold Coast 2.02 Thailand Chiang Mai 0.49

Canada Montreal 2.01 Philippines Quezon City 0.48

New Zealand Hamilton 2.00 Indonesia Jakarta 0.48

New Zealand Tauranga 2.00 India Ahmedabad 0.38

Singapore Singapore 1.98 Philippines Mandaluyong City 0.27

Project Manager 1 Information Technology Project Manager 1 Information Technology

Country City PPP Adjusted Criterion Country City PPP Adjusted Criterion

Vietnam Da Nang 2.06 India Kolkota 0.93

Thailand Rayong 1.84 New Zealand Wellington 0.92

Kuwait Kuwait 1.77 Vietnam Ho Chi Minh City 0.91

UAE Abu Dhabi 1.76 Philippines Taguig City 0.91

UAE Dubai 1.64 United Kingdom Edinburgh 0.89

Thailand Phuket 1.63 New Zealand Auckland 0.89

United States Washington 1.55 Malaysia Cyberjaya 0.88

Bahrain Bahrain 1.54 United Kingdom Manchester 0.88

Hong Kong Hong Kong 1.54 United Kingdom Aberdeen 0.88

Qatar Doha 1.51 Canada Calgary 0.87

United States New York 1.50 Canada Edmonton 0.86

United States San Francisco 1.44 New Zealand Christchurch 0.86

United States Los Angeles 1.44 Philippines Makati City 0.86

United States Houston 1.43 India New Delhi 0.84

United States Boston 1.42 Canada Toronto 0.83

United States Chicago 1.37 India Trivandram 0.82

United States Charlotte 1.37 Philippines Manila 0.82

United States Seattle 1.37 United Kingdom Birmingham 0.82

United States Dallas 1.35 Australia Sydney 0.81

United States Atlanta 1.34 New Zealand Hamilton 0.80

Thailand Bangkok 1.32 New Zealand Tauranga 0.80

Singapore Singapore 1.30 Canada Ottawa 0.80

Saudi Arabia Riyadh 1.27 Australia Melbourne 0.80

United States Minneapolis 1.26 Australia Brisbane 0.79

United States Denver 1.26 Canada Mississauga 0.79

United States Phoenix 1.26 Australia Adelaide 0.78

Vietnam Hanoi 1.22 Vietnam Vung Tau 0.78

United States Austin 1.21 Australia Perth 0.78

China Shenzhen 1.19 Canada Vancouver 0.78

Thailand Chonburi 1.18 New Zealand Palmerston North 0.76

Thailand Pattaya 1.17 Canada Montreal 0.76

China Shanghai 1.15 United Kingdom Bristol 0.76

China Tianjin 1.14 New Zealand Dunedin 0.75

India Gurgaon 1.08 Australia Canberra 0.72

United Kingdom London 1.05 China Suzhou 0.72

India Pune 1.02 Philippines Cebu City 0.64

India Bangalore 1.02 Australia Gold Coast 0.61

India Hyderabad 1.01 India Ahmedabad 0.60

Malaysia Kuala lumpur 1.00 China Guangzhou 0.60

India Noida 0.97 Thailand Ayutthaya 0.59

China Hangzhou 0.95 Indonesia Jakarta 0.58

United Kingdom Glasgow 0.95 Philippines Pasig City 0.57

India Mumbai 0.94 Thailand Chiang Mai 0.57

China Beijing 0.94 Philippines Quezon City 0.53

India Chenai 0.93 Philippines Mandaluyong City 0.30


52 53

HOT ICT JOBS Currently, there is a shortage in the supply of qualifi ed and experienced candidates across many areas of the industry including software engineering, web development, database administration, security and project management. Positions range from junior positions to graduate roles as well as more senior levels. The industry is actively looking to fi ll vacant positions especially in software development. Candidates with qualifi cations in C++, Java development, J2EE, .Net, HTML5, JavaScript, Php, J2ME, OOP, Python, Flex, AJAX and Silverlight are highly sought after (Figure 3).

Within the Business Applications domain, the demand for ICT professionals varies. Though demand for certifi ed professionals in SAP or ERP are at an all-time high, professionals specializing in IT audit and IT security are highly sought after as well, especially to fend off malware makers and cyber thieves. Mobile technology to access information on the move is rapidly increasing while the use of desktops and PCs is slowing down in the midst of intense efforts to create mobile rich content. As a result, mobile architects who can provide this service on Android, iPhone and Blackberry platforms are going to be in high demand in the coming months.

In addition, organizations are shifting towards cloud computing and are spurring the need for infrastructure professionals. Big Data Analytics is also a fast growing area, especially in big companies desiring to extract insights from their petabytes of stored data. The best candidates for Big Data Analytics jobs are those equipped with inter-disciplinary knowledge and experience pertaining not only to technical know-how but who also have a strong statistical/mathematical background. Similarly, demand for mobile application developers and user interface designers who can develop user friendly and versatile applications are also on the rise. Technology aside, employers still need soft-skilled professionals especially in project management, consulting, process and quality improvement. It is a fact that desktops and PCs are losing their appeal, rapidly being replaced by tablets and smart phones that are more convenient, versatile, and fl exible. Not only are they mobile, these devices are user friendly and have other attractive features and applications. Subsequently, the industry is striving to create more and more mobile-rich content and there will be a high demand for mobile architects for Android, iPhone and Blackberry platforms. Meanwhile, gaming is another fast-growing arena with the potential for jobs in cloud-baed gaming, F2P (Free2Play), social media & subscription games and online gambling increasing for those with the relevant experience and qualifi cations.

TEC

HN

ICA

LA

PP

LIC

ATIO

NS

SOFT

SK

ILL

JavaC# C++ .Net

SAPERP

ProjectManager

ITConsulting

Business ProcessImprovement

QualityImprovement

ITAudit

ITSecurity

Helps DeskAnalysts

Big DataAnalysts

WebDeveloper

CertifiedNetwork/System

Egineers

CertifiedDatabase

Administrators

Figure 3: Hot ICT Jobs by Area of Applications

Source: PIKOM

SECTION D:

ICT EMPLOYMENT & OUTLOOK PERCEPTION IN 2015

JOBSTREET.COM EMPLOYMENT CONFIDENCE INDEX (JECI)The JobStreet.com Employment Confi dence Index (JECI), is compiled on a monthly basis as per the norm. On a scale of 1 to 100, from very poor to very good, a low index shows a tough job market situation while a high index refl ects a comfortable situation where jobs are easily secured. The JECI dropped from 50.3 in 2013 to 49.0 in 2014 and by the second quarter of 2015 the index further declined signifi cantly to 43.0; see Figure 1.

30

35

40

45

50

55

201520142013201220112010200920082007200620052004200320022001

36.034.1

33.6

45.2

45.8

50.1 50.449.4

47.7

51.2 51.6

48.9

50.349.0

43.0

Figure 1: Jobstreet.com Employment Confi dence Index (JECI), 2001-2015

Source: Jobstreet.com

RECRUITMENT CHALLENGESThe most recent JobStreet.com Job Outlook Report states that 56% of employers indicated that recruitment will be challenging this quarter as they are unable to fi nd the right candidates to fi ll positions. Another key challenge is the high salary demanded by candidates today; see Figure 2.

0%

10%

20%

30%

40%

50%

60%

Company brandingnot strong

High salarydemand from

candidates

Unable to findcandidates who fit

the company

Unable to find theright candidate

Lack ofrecruiting skills

Lack ofrecruiting budget

7%3%

56%

11%

22%

1%

Figure 2: Employers Outlook on Recruitment in 2015



54 55

DEAD FOR SPECIALIZATION Jobstreet.com also discovered the top three specializations that are in most demand are in the engineering, sales/marketing, and the accounting fi elds; see Figure 3. According to employers, these positions are also the most diffi cult to fi ll.

Sales & Marketing

17.8%

Accounting

9.7%

Engineering (construction/ building /civil / quantity survey / electronics / electrical)

19.9%

Top 3 Specializaton

Accounting

15.3%

Sales & Marketing

20.3%

Engineering (construction/ building /civil / quantity survey / electronics / electrical)

19.5%

Top 3 Difficult to Fill Specialization

Figure 3: Job Specialisation Recruitment


RECRUITMENT PERIODMost employers anticipate that the peak recruitment period will be between the fi rst and second quarter of the year; see Figure 4. This mirrors the situation in 2014 which also experienced similar movement. This then would be the ideal time for those who seek employment as positions would be more readily available.

0

20

40

60

80

100

Oct-DecJul-SepApr-JunJan-Mar

43%

73%

30%

13% 14%

Figure 4: Period Employer Hiring Pattern


Despite falling crude oil prices in the global market and retrenchment, the oil and gas sector is still ranked as one of the top paying industries for ICT professionals; no signifi cant rise in salary was registered in 2014

SALARY INCREMENT AND BONUS PAY-OUTEmployers are willing to increase salaries and pay bonuses to retain staff. Almost all surveyed are agreeable to pay rises. However, there is a discrepancy between the expectations of employers and employees as to the quantum of increase. Only 31% of employers said increments will be 6% and above, while more than half of employees expected to those increment levels; see Figure 5.

As for bonuses, the average bonus pay-out across most industries should be 1.4 months, slightly lower than the average bonus pay-out of 1.7months in 2014. The fi nance and banking sector will still be paying the highest bonus with an average of 2.5 months. The good news is that on top of bonuses and pay rises, employers will continue to provide other benefi ts. This includes transportation, healthcare and private expenses such as mobile usage and travelling allowances.

Employerplannedincrement

Employeeexpectedincrementt

NIL

5% 18% 46% 23%

31%

54%

8%

7% 14% 25% 28% 26%

Between1% to 3%

Between3.1% to 6%

Between6.1% to 10%

More than10%

Figure 5: Salary Increment and Bonus Pay-out


WILL EMPLOYEES LEAVE AFTER BONUS AND INCREMENT?Despite bonuses and increments, nearly half of employees surveyed admitted they would still be on the lookout for better job opportunities; see Figure 6. It appears that company management and career growth opportunities are pivotal in the decision to stay or to move.

0

10

20

30

40

50

60

70

No, I will still explore for better job opportunitiesYes, definitely

58% 42%

Receiving bonus/increment expectations retain you to stay inyour current job for the next 12 months

Figure 6: Employee Retention after Bonus Pay-out


AcknowledgementThis article contributed by Jobstreet.com


56 57

SECTION E:

TOP NINE ICT JOBS IN THE NEXT 5 YEARS

IntroductionToday’s lifestyle revolves greatly around technology and all it has to offer. Information Communications Technology (ICT) has been so integrated and ingrained into everyday life that we simply cannot imagine doing without it.

This being the case, the demand for the skills of ICT professionals is at the top of the ladder and looking at the way technology is progressing, it will likely remain so for some time. Jobs in the ICT arena and in technology have evolved greatly since the Internet started gaining momentum in the early 1990’s. They are still evolving and changing as technology advances and progresses; but the biggest drivers are the multitude of applications that are perforating the market especially the mobile apps and e-commerce applications. Many have turned ‘programmer’ overnight in developing these applications. Is this suffi cient just to know how to develop and program applications?

Today’s mainstream IT professionals are not only required to master the technical skills in computing but equally important, must also be equipped with knowledge and have experiences in the much wider scope of the ICT arena. These include broadband infrastructure networks in wired and wireless, modes, cloud computing, big data analytics and the miniaturization of devices. Ideally they should also be mobile and agile; and be aware of the mechanics between technology, content, people and processes. The task at hand is great indeed and it is practically impossible for any one person to master all the skillsets while coping with the fast-emerging requirements. Instead, IT professionals have to choose areas to specialize in, be it networks, software engineering, system development or IT management, among the many other areas. In choosing the specialty, one must also understand market demands, specifi cally regarding the types of skills required, the qualifi cations needed and the career advancement prospects. Job remuneration will certainly be one key consideration.

This paper will highlight the features and characteristics of the top nine ICT jobs in 2015 including some salary trend and which in all likelihood will extend into the next fi ve years. We referred to the data compiled for the US ICT job market as a benchmark since the journey that Malaysia has undertaken in the ICT arena over the last decade is closely to those of these advanced economies. As per the data compiled for the USA IT job market, we expect that these will also be the nine top jobs that will also be in greatest demand here in the ICT market for the next fi ve years. Table 1 depicts three parameters namely score on job in demand, projected growth rate in next 5 years and new jobs in demand in next 5 years. The methodology and analyses are provided by the US Bureau of Labour Statistics. The “score on job in demand” is a single weighted average between 0 and 5, depicting “0” for no demand and “5” for highest demand. This measurement takes into account 7 variables with assigned weightage as shown in the bracket namely, growth volume (10%) , growth percentage (10%), median salary (30%), job prospects (20%), employment rate (20%), stress level (5%) and work life balance (5%). In the survey each variable is measured against a Likert scale of 1 to 10, which is in turn converted into a score of between 0 and 5 using specifi c criterion for each variable. An example is shown for job growth on converting Likert Scale of 1 to 10 to score of 0 to 5.

We translate job growth volumes from a number to a score of up to 10 points. Those occupations expected to grow by 500,000 openings or more received the highest score: 10. Occupations with job growth numbers between 200,000 and 499,999 earned 8 points; between 100,000 and 199,999 earned 6 points; less than 100,000 openings earned 4 points; and any occupations for which numbers were expected to decrease received 2 points.

Similarly, for each job function, Bureau of Labour Statistics (BLS) also has reported the number of new jobs that will be created in ten year period (2012-2022). Based on these numbers BLS has provided the annual average growth rate for each job function as shown in Table 2.

For example, the Bureau of Labor Statistics projects a whopping 22.8 percent employment growth for software developers between 2012 and 2022. In that period, an estimated 139,900 jobs will open up. BLS has estimated 970,000 new technology jobs during 2012-2022. Of this software developers constituted 14%.

Top Trending ICT Jobs of 2015From Table 1, it can be seen that software developers garnered 4 out of 5 points in the Scale to emerge as the highest demand job in the USA and it appears that this will also be the same here in the Malaysian market. This is followed by computer systems analysts, information security analysts and web developers, each securing a score of 3.8. However, in terms of growth rate, information security positions are projected to grow by 36.5 % within the next fi ve years, followed by computer systems analysts (24.5%), software developers (22.8%) and web developers (20.0%). The US Labour of Bureau also indicated that over the next 5 years, computer programmers will comprise 31 out of every 100 jobs demanded in this period. Next in line would be web developers (15) software developers (14) and computer systems analysts (13).

Hence, it is not surprising to note that Software developer and Computer Programmer garnered the highest projected growth and demand in the number of jobs; and this certainly support our conjecture that developing innovative applications especially for e-commerce and mobile applications will be the main focus in the next 5 years. Combining these two categories of jobs, a whopping 45 jobs out of 100 will potentially be in software programming and development.

Table 1: ICT Job Functions Demand Distribution

Source: US Bureau of Labour Statistics and PIKOM Estimates

Job Functions Score on Job in Demand Projected Growth Rate in Next 5 Years New Jobs in Demand Next 5 Years

Software Developer 4.0 22.8 14

Computer Systems Analyst 3.8 24.5 13

Information Security Analyst 3.8 36.5 3

Web Developer 3.8 20.0 15

IT Manager 3.6 15.3 5

Computer Systems Administrator 3.4 11.7 4

Database Administrator 3.4 15.1 2

Computer Programmer 3.1 8.3 31

Computer Support Specialist 3.0 17.0 13

100


58 59

Median Salary Trends by ICT Job FunctionsFrom Table 2, it can be seen that in 2013 IT managers netted the highest annual salary of USD123,950 but with an increase of only AAGR or 1.3%. In contrast, the AAGR in the salaries information security analysts was the highest at 3.8%, followed by 3.3% for computer support specialists. Benchmarked against IT Managers, the annual salary of other ICT jobs was relatively stagnant.

Table 2: Median Salary of ICT Professionals by ICT Functions, 2004-2013

Source: US Bureau of Labour

Key ICT Job Function• Software Developer

Software developers typically fall into two camps; application developers, who design computer software and databases and systems-focused developers who build operating systems, such as Linux or iOS. The demand for both types of professionals is projected to balloon given the current state of development and digitalization in the world.

Software developers invent all kinds of technological features that not only can impact our day-to-day living but more often enhanced our life style. Creativity and passion are therefore vital and key characteristic of software developers along with technical expertise of course.

As competent developers, one must also exhibit the trait of a problem solver who possesses strong analytical skills and the ability to think outside the box. Software developers are employed in a range of industries, including computer systems design, electronic product manufacturing and fi nance.

Job Functions 2013

2004 2006 2008 2010 2012 2013 AAGR:2004-201325th

Percentile Median 75th

Percentile

US Dollars %

Software Developer 72,290 92,660 116,630 79,500 82,340 89,120 90,410 93,280 92,660 1.7

Computer Systems Analyst 63,860 81,190 102,480 71,340 74,880 83,200 81,250 83,800 81,190 1.4

Information Security Analyst 67,120 88,590 113,100 63,380 68,780 76,980 63,700 89,290 88,590 3.8

Web Developer 44,550 63,160 85,270 64,900 68,770 74,100 79,370 66,100 63,160 (0.3)

IT Manager 96,850 123,950 156,560 110,170 101,710 121,680 112,650 129,130 123,950 1.3

Computer Systems Administrator 57,560 74,000 93,950 60,920 66,330 70,960 71,500 76,320 74,000 2.2

Database Administrator 58,490 78,520 101,450 68,510 71,310 77,140 75,730 79,120 78,520 1.5

Computer Programmer 57,940 76,140 97,760 68,860 71,550 72,720 74,690 78,260 76,140 1.1

Computer Support Specialist 45,230 60,180 78,360 44,840 46,430 46,520 51,730 53,230 60,180 3.3

Comparison against IT Manager

Software Developer 0.75 0.75 0.74 0.72 0.81 0.73 0.80 0.72 0.75

Computer Systems Analyst 0.66 0.66 0.65 0.65 0.74 0.68 0.72 0.65 0.66

Information Security Analyst 0.69 0.71 0.72 0.58 0.68 0.63 0.57 0.69 0.71

Web Developer 0.46 0.51 0.54 0.59 0.68 0.61 0.70 0.51 0.51

IT Manager 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00

Computer Systems Administrator 0.59 0.60 0.60 0.55 0.65 0.58 0.63 0.59 0.60

Database Administrator 0.60 0.63 0.65 0.62 0.70 0.63 0.67 0.61 0.63

Computer Programmer 0.60 0.61 0.62 0.63 0.70 0.60 0.66 0.61 0.61

Computer Support Specialist 0.47 0.49 0.50 0.41 0.46 0.38 0.46 0.41 0.49

Knowledge wise, an understanding of computer system fundamentals like big O notation, common algorithms, standard languages and technical approaches is a given. Whilst not mandatory, attaining a Bachelor’s Degree in Computer Science would also help in securing your fi rst job. However, by itself a degree even from a prestigious school will not be suffi ced but aspiring software developers should be passionate about new technology and/or new computer languages and applications. In a nutshell, employers today demand profi ciency not only in computer science but also the practical experience and passion.

• Computer Systems Analyst Computer systems analysis is a role that has existed for many decades and whilst the same term has been used over the years, the demand and the skills sets of this role has evolved into different facets and is highly sought after. In essence the today’s Computer Systems Analyst’s roles and responsibilities have focused on a hybrid of information technology and business requirements; and not only confi ned to understanding of the hardware, software and networks. Business acumen is certainly a crucial trait of this profession.

Analysts must leverage both their knowledge of information technology and business to analyze and design better computer systems and processes for clients. Although these professionals have many competencies, their key skill is the ability in understanding the client’s business and its pitfalls. Knowledge of common technology used and the latest trend are given. Unlike some of the more technical IT role, a computer systems analyst requires constant collaborations with people especially with the business users.

With rapid changes and evolution in the business landscape, including from compliance and privacy issues to the increasing reliance on mobile technologies, the role of a computer systems analyst can also be challenging as one has to constantly keep abreast of the emerging technology. Many analysts work for computer systems development house, but they’re also employed by a host of industries that range from science to health care to banking and fi nance. Demand for computer systems analysts is expected to grow at a steady rate this decade since businesses and organizations are increasingly reliant on information technology.

A bachelor’s degree in information sciences is perhaps the best way to prepare for this career. These programs prepare students to immediately step into the fi eld, with courses that range from software development and database design to social psychology and project management, among others. Information sciences degrees give students a sound background in business and technology.

• Information Security Analyst As society becomes more reliant on technology, increasingly personal data and pertinent information is also at risk of being breached and will require more protections and security. This is where the role of an Information Security Analysts comes in and their job functions basically entails designing and monitoring security applications of computer networks for companies and government agencies. They also troubleshoot security breaches and in most instances represent the fi rst frontline defense against cyber-attacks, hackers and malware designers that are increasing in quantity and intensity today. A more recent title such as Chief Security Offi cer (CSO) is also prevalent in larger organizations and predominantly this role entails overseeing the security of personnel, physical assets and information in both physical and digital form. In essence, a CSO serves as the business leader for the development, implementation and management of the organization’s corporate security vision and the IS Analysts reports and worked closely with the CSO.


60 61

As compared to the CSO role, a IS Analyst role in protecting the data and computer networks of companies and government agencies, the work of Information Security Analysts are often goes unnoticed behind the scenes. But their work is nevertheless vital especially in light of the increased cybersecurity threats, leaked information and security breaches that plaque the industry today. It is therefore critical that Information security analysts can stay one step ahead of imminent cyber attackers.

The strong trait required of a Security Analyst includes strong problem-solving and analytical skills and an understanding of computer systems. It would also be useful to be familiar with security regulations and standards especially when dealing with online transactions and credit and debit card information, something that is often compromised these days. Entry level duties would probably involve the operation of software to monitor and analyze information, while a more senior-level position would perform investigative work to determine security breaches.

Many information security analysts are armed with a bachelor’s degree in computer science, programming or engineering. Some employers also seek applicants with a degree in Masters Business Administration (majoring in information systems). There is also a range of certifi cations offered by organizations such as the InfoSec Institute. After gaining some experience in the fi eld, one may obtain a CompTIA Security+ certifi cation, which includes training in network security, threats and vulnerabilities and cryptography. The career path of this position can potentially be leading towards a CIO role and position

• Web Developer Web developers are responsible for the sleek fonts, clean and ‘sexy’ layout that often differentiate one website from another. They are the brains behind these innovative colors, graphics, images, special effects and animation, in addition to designing the functionality, navigation and the entire gamut of clicks, tabs and functions of a web page. These developers are sometimes known as the ‘professional artists’ of websites.

In creating the perfect page, the developer must fi rstly understand the users’ needs and objectives which are perhaps easier said than done! Whilst it is mother-hood to suggest that the “What”, “Where”, “Who”, “Why” and “How” must be understood fi rst, it is nevertheless crucial that these are clear at the outset before the designing process can commence. This is a multi-iterative process, which includes iterative creations and innovations, code crafting, touch of animations, bug resolutions and fi xing and fi nally presenting the end result before launching it to the world. Depending on the organizations and environment, although some Web developers will be responsible from design to implementation, some companies also separate these responsibilities out since different sets of skills will be needed for different phases of the development. For instance, some Web developers will be focusing on using tools like ‘photoshop’ to create the overall design, while others will be tasked with writing the code in programming languages such as HTML and CSS. Unlike the traditional computer program

Generic skills in software development and computer programming are highly sought after, despite signifi cant changes in the ICT landscape in terms of miniaturization of devices; provision of mobile broadband; platform, infrastructure and software as a service; increasing digitization processes; and convergence of process, content and people.

development, wherein the main outcome is to ensure that the program can perform a set of defi ned functions and features, web development also has to ensure that the ‘look-and-feel’ of the end result is in line with the organizations’ products and services; and appealing to the target market.

The job certainly requires a high level of working knowledge of software programs, web applications and programming languages such as HTML and CSS, including a deep understanding of design principles. Work environments for Web developers vary from large enterprise to small businesses. In today’s environment, web developers can worked anyway as long as there is decent bandwidth; they can be full-time employees, part-time consultants or work on a contract or project basis as freelancers.

While some employers may still prefer a bachelor’s degree in a computer-related fi eld such as computer science or information technology, others may accept certifi cations such as Certifi ed Web Developer, Certifi ed Internet Webmaster, and Advanced Web Developer and in Mobile Application Development. In the web development industry, it is fair to note that many employers would certainly value past experiences and strong sense of creativity over paper qualifi cations.

• IT Manager As with the Analyst role, the IT Manager position has also been in existence since the dawn of computing industry but with the evolution of technology especially the emergence of internet and mobile, this traditional role has also evolved into a multi-facet discipline position. Its predecessor name commonly known in those days as Electronic Data Processing Manager (EDP Manager); and as the designation suggest the role largely focus in managing the processing of electronic data. Nevertheless survey has shown that the IT Manager position is still very much in demand and is critical in supporting the executions of the IT plan for the organizations.

Predominantly the IT managers will tend to manage the day-to-day operations in resolving problems relating to PCs, Printers, Security, Data, Networks, IT peripherals, software applications, servers, software upgrade and the daily routine of data backup. Procurement of IT equipment initiations will also be processed by the IT Manager in most circumstances before the sign off from Finance or senior management. Today with outsourcing to external parties being a common practice, the IT Manager must also have the trait to manage, negotiate and collaborate effectively with vendors and suppliers in addition to supporting the day-to-day operations. An IT manager roles and responsibilities are certainly multi-facet and will need a myriad of skill sets be it technical, business or management. Where there is a CIO position in the organization, the IT Manager will also have to work closely with this position to derive the IT strategic plan including the budget.

IT managers typically are expected to hold a bachelor degree in computer science or information systems, including exposure in computer programming and understanding of the project management. In a development environment he/she is also expected to understand the Software Development Life Cycle (SDLC) approach. Some larger organizations will also require their IT managers to have a post graduate degree, such as a Master of Business Administration (MBA) in addition to a basic degree. Most would spent at least five to 10 years in an IT occupation before being promoted to manager, but smaller companies generally has lesser entry requirements but the IT manager will also be expected to be ‘hand-on’ in most cases. Career path of the IT managers can potentially be towards a CIO and/or CTO role.


62 63

• Computer Systems Administrator Computer systems administrator is typically a technical position and very operational in nature as it predominantly manages and supports the day-to-day administrations of systems, which includes the servers, operating systems, and telecommunication networks. In essence ensuring that the “heart and arteries” of the enterprise is working smoothly. This job is in high demand and the growth potential is there as businesses continuously invest and enhance in new technology and networks infrastructures. Today systems administrators must also have deep knowledge of the security aspect of these infrastructures in protecting their environment. Network and computer systems administrator jobs often require a bachelor’s degree – typically in computer science or information systems, although sometime a degree in computer engineering or electrical engineering is also acceptable. Coursework in computer programming, networking or systems design will be useful. Some businesses require a master’s degree, while others are willing to accept an associate degree or professional certifi cation along with related work experience. On-going certifi cations and keeping abreast of new technology will be essential as its imperative to stay current with technology trends and changes; including the business requirements of the company.

Some of the common technical knowledge required for this role includes understanding the workings of DNS, DHCP and fi rewalls and how they impact a network infrastructure. Joining professional organizations like the Association for Computing Machinery can also help one to keep up with technological developments; and completing certifi cation programs, such as those offered by Microsoft, Red Hat and Cisco, will certainly offer an advantage for these positions. Most systems administrators are employed on full time basis; and working outside of normal business hours and overtime are common characteristic of this role. There is defi nitely on-going demand for computer systems administrators especially in a large user environment where multitude of servers and networks are deployed in data centers, such as educational institutions, hospitals, fi nancial institutions, large conglomerates and government agencies.

• Database Administrator (DBA)This is yet another highly sought after and highly specialized profession involving setting up and maintaining databases for large corporate and government agency. It is predominantly a technical position. With information so readily available in this era of internet and mobile devices, and online transactions, data has become the new ‘treasure’ that organizations must cherish and protect. DBA are relied on as the custodian of this treasure and also working closely with the Information Security Analysts in ensuring that these sensitive data are secured. In essence the DBA key responsibilities are in setting up, managing, operating and securing databases.

The job often involves solving complex issues such as enhancing data structure, upgrading of the databases, missing data, data corruption and data breach. Hence attention to detail with an analytic mind is an essential trait in this profession. DBAs positions can be found in wide range of private and public sectors; and some DBA also pursue their career as a consultant in advising and supporting customers in consulting fi rms. Strong growth estimates and a low unemployment rate, positions this profession as one of the best jobs this year. Employers generally require a DBA to have a bachelor degree in a computer-related fi eld, such as computer science or management information systems, although some may favor applicants with a master’s degree in business administration with a concentration in information systems. DBA is often a specialist and certifi ed in a specifi c database platform, such as MySQL Database Administrator, Oracle DBA and Microsoft Certifi ed Database Administrator.

Very often, a DBA will support multiple projects in a team and at time working independently. Hence multi-tasking and attentive to details including effective time-management skills are essential. A DBA typically works inside a data center and/or server rooms, and working outside of normal offi ce hours is not uncommon. Whilst some DBAs have become specialist in their own fi eld of technology, others have also moved on to becoming IT managers in charge of planning, coordinating and directing computer-related activities for a company.

• Computer ProgrammerPatience and the love to ‘coding’ will augur well to those interested in computer programming. These days’ programming is very different to traditional programming in that you don’t really need to pursue a formal course or degree to learn the art of coding. There are enough of materials in cyber-space to set ones off as a code-cutter! The question is whether this is suffi ced to bring you to a successful career as a programmer is a different story.

With the emergence of technology and the digital age the demand of computer programmers have increased by leaps and bounds. It was ranked the 9th and best job in 2012 by US News &World Report. In essence a programmer’s role is to write codes that a computer can read and translate these instructions in executing a function. A programmer’s role can be a mundane routine of code writing, re-writing, debugging and testing of computer programs and hence this kind of job may not suit everyone; and very often the programmer will also be working alone on the keyboard and monitor. In many cases, a programmer’s work will only start after a software developer or designers have completed the design specifi cations for a particular program.

Programming is highly detailed work requiring a precise logical mind-set, and it usually can require the use of more than one programming languages to complete a job. Projects duration can be short requiring only a few days of coding, or they can have a very long gestation period to write and test. Most employers expects a programmer to have at least a bachelor degree with strong grounding in mathematics; though one may be able to fi nd positions that will also accept certifi cates in programming. Fortunately and unfortunately, there are a myriad of programming certifi cations available in the market and the value of each depends on where you want to ‘spend’ your currency and who will ‘accept’ it. Hence one has to be mindful of which certifi cates to pursue.

• Computer Support Specialist Whilst computer support specialist is one of the lower-paying positions in the IT industry, they also represent the fastest growing positions. In many instances this support specialist role is also the foundation to more senior IT positions in an organization. Typical duties of a support specialist include overseeing the daily operations and performance of the computer systems, responding to calls from users, performing minor remedial to equipment, diagnosis of problems, act as a go-between vendors and other specialists. They may also be involved in projects as team members looking into the fl ow of the IT operations and SOP manuals. This position normally reports to a senior support specialist or the IT Manager.

Qualifi cations-wise, while some employers may require a post-secondary degree or certifi cation, computer support specialists are typically assessed on their overall level of competency, technical acumen and customer service skills. “Proving that you can do the job” is most important. It is recommend that candidates be well-versed in operating systems and hardware components, have Microsoft Offi ce training and pursue a CompTIA A+ certifi cation, which is earned by taking two exams that determine general competency as a computer technician.


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For computer network support specialists, the requirements may be more stringent, and employers are likely to hire only applicants who possess at least a bachelor’s degree.

Technical skills naturally are an absolute must to compete in the job market for this position. One must be highly familiar with computer hardware and software (including operating systems), understand login systems and email applications and have a solid grasp of network logistics, something that is especially important for those seeking a career as a computer network support specialist. However, merely possessing technical skills is not suffi cient. Aspiring computer support specialists should also have a knack for problem-solving, and have effective written and verbal communication skills to obtain information. Competent computer support specialists can also juggle several issues at a time and can tackle the various problems that might crop up.

ConclusionTwo things warrant due attention when one reads this article. First, the data provided in this article pertains to the US ICT market, which is a much more matured, experienced, and skilled market. Many countries in the developing world including Malaysia are at different stages of ICT development and at this juncture the US ICT scenario may not be strictly applicable. However, with rapid advancements being made in the digitization processes the developing countries sooner or later are likely to attain the maturity that US businesses and markets are experiencing. One pertinent feature discovered in the US ICT market is the relatively low rate of salary growth (3.8%); in comparison Malaysia has been experiencing 6% to 11% (2006 to present). Secondly, the nomenclature and the descriptions of the role of job functions used by US BLS is somewhat “archaic”; is not refl ecting contemporary changes going on in the ICT landscape. For instance, contemporary companies’ role of database administrator is subsumed as an integral role of chief data offi cer or chief analytics offi ces, who not only administer the organization database but also cull out business insights and intelligence. Similarly, the traditional operational role of IT manager is increasingly taking the shape of Chief Technology Offi cer (CTO) or Chief Information Offi cer (CIO) when strategic functions demand understanding of business requirements as well, besides technical functions.

The National ICT Association of Malaysia (PIKOM)

AcknowledgementsThe article is based on data sourced from “Best Technology Jobs” posted at http://money usnews.com/careers/best-jobs/rankings/best.technology jobs

SECTION F:

LEVER FOR CHANGE… FIXING THE ICT GRADUATES VERSUS EMPLOYER MISMATCH

No future in the ICT Profession - Really?The issue on unemployed graduates has been a Malaysian concerned for nearly a decade. A study in 20061 found that more than 30% of graduates remain unemployed after 6 months. The study gave an example where the knowledge of Information and Communication Technology / ICT acquired by students do not meet the expectations of the industry.

What has made it worse was that the report on unemployed ICT graduates created the perception in parents’ minds that there were no jobs in this industry! This was far from the truth as job vacancies in the area “Computer/Information technology” as recorded by JobStreet2 in May 2014 was one of the highest in any technical roles, with “Software Jobs” contributing to 60%. Software engineering and programming related jobs are also expected to be in highest demand by the ICT industry for the period between 2015 and 2017 according to a survey conducted by the Multimedia Development Corporation (MDeC)3. This is not surprising and in fact consistent with the global trends where the global vacancies for degree holders with software development expertise were more than 1.9 million with a growth rate of 23%. In addition, software development professionals are one of the highest paid occupations4.

Universities have responded – but we still have a problemSince then there has been signifi cant effort by Universities to collaborate closer with the industry to address this problem. All Universities are required to appoint an “Industry Advisory Panel” or a variation of it to provide feedback on the curriculum and learning activities. Some Universities would also acquire the services of industry luminaries as adjunct faculty members to further help address this gap. Industry attachment and internship has been made mandatory for students in ICT programs, and projects are an integral part of the curriculum to help develop the soft skills such as communication, collaboration, critical thinking, problem solving and life-long learning.

Despite all these efforts, in 2014, the National ICT Association of Malaysia (PIKOM) reported that only 10% of the new entrants to the ICT workforce are directly employable while the rest require training before they can start work5. So what is amiss here? What should we do next?

1. http://www.studymode.com/essays/Graduate-Unemployment-In-Malaysia-573794.html

2. http://www.jobstreet.com.my (May 6th 2014)

3. MSC Malaysia Talent Supply-Demand Study 2013 - 2017

4. http://www.careerinfonet.org

5. ICT Job Market Outlook 2014, PIKOM

6. MQA is an agency under the Ministry of Education (MOE) responsible in accrediting curriculums for higher

education.

7. Program Standard is a curriculum standards document published by MQA for an area of study.

8. http://www.acm.org/education/curricula-recommendations


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Yet another analysisOf course there are multiple facets to this problem. Given that the main role of universities is to equip students with the fundamental knowledge of a discipline, in this case ICT, this needs to be looked at carefully fi rst.

As it turns out, ICT is an overused term that spans a very wide area from engineering, telecommunication, computing and even multimedia. In fact, the Malaysian Qualifi cations Agency (MQA)6 does not have a Program Standard7 specifi c for ICT. Instead it has several program standards covering the various areas in ICT, the main being Program Standard for Computing. From here onwards, the term “Computing” will be used for accuracy, which in general means ICT as understood by many.

Malaysia is fortunate that since 2010, our experts in Computing curriculum have managed to convince the higher education eco-system to adopt the globally recognized “ACM Computing Curricula”8 as the basis for the Malaysian standard. This sets a sound foundation for the fi eld of Computing in Malaysia and defi nes four9 distinct disciplines: Computer Science (CS)10, Software Engineering (SE)11, Information Systems (IS)12 and Information Technology (IT)13. The courses defi ned by each of this discipline produces graduates of different capabilities as described in the footnote. Hence it is important for employers seeking to employ fresh Computing / ICT graduates to be able to distinguish these four different types of degrees, and understand their relevance for the different job roles in their organizations:• Companies which require software developers should seek for CS and SE graduates.• Companies which require fresh graduates to administer, integrate, select and manage systems,

databases, middleware, network equipment and computing infrastructure should employ IT or CS graduates which have taken the relevant electives.

• Companies which require people who are skilled in leveraging technology and information for business should employ IS, and possibly CS graduates who have taken the relevant electives.

9. In fact ACM Computer Curricular defi nes 5 disciplines. The fi fth is Computer Engineering where in Malaysia, this

falls under the Engineering fi eld and not computing. Hence this is outside the scope of this article.

10. Computer Science (CS): Graduates from this program should be able to develop software, develop way to solve

computing problems, device new ways to use computers and be adaptable to new technologies and new ideas.

11. Software Engineering (SE): to produce graduates who are able to do develop software and handle large,

complex, and/or safety-critical projects.

12. Information Systems (IS): graduates who are able to play key role in determining the requirements for

an organization information system and contributes actively in their specifi cation, design and supports

implementation.

13. Information Technology (IT): graduates who are able to select, integrate, install, customize and maintain

hardware and software products for an organization.

Potential employers, human resource professionals and job recruitment specialists are cautioned that companies which require software developers should seek computer science and software engineering graduates. Similarly, IT or computer science qualities would suffi ce if they look for somebody who can administer, integrate, select and manage systems and databases.

In general, CS and SE courses are designed to produce graduates who are technology creators. In contrast, IT and IS degree courses are meant to create graduates that are skilled to become expert users of ICT. So for a nation that is aspiring to be technology producers, we should prefer our best and brightest to pursue CS and SE courses.

Employers will possibly fi nd the CS graduates being the most ready in fi lling most roles in ICT if they have the right attitude and willing to self-learn new technologies and tools. This is because compliant CS courses are designed to prepare graduates with the broadest fundamental knowledge in computing that enables them to quickly adapt to the changes. Further, these would be the best candidates for R&D as they are trained to look at new ways of solving computing problems and typically have the strongest science and mathematics background. MDeC’s fi ndings on the breadth of job types reported in their “Skills Competency Matrix” are consistent with this view.14

It is also worth noting that it is in general not easy to re-train IT and IS graduates to do core business critical software development as this requires good background in a number of advanced mathematics and computer science concepts that are not typically or adequately covered in IT and IS courses. Having said this, there may be isolated cases where IT and IS graduates who are good programmers and software engineers – but this is typically due to their own initiative and/or experience rather than an outcome of these programs.

So here’s the problem – we may be expecting a town planner to architect twin towersA quick poll of employers and companies in the ICT industry15 in Malaysia showed that most companies do not realize that there are four types of Computing (or ICT) graduates with very different core skill sets and suited for different roles. For example, most companies when wanting to employ fresh graduates to fi ll software development roles would allow any ICT graduate to apply, which will attract graduates from all four disciplines. Expecting IT and IS graduates to competently do this job is just like expecting a town planner to architect a sky-scraper. Given that software development jobs are in high demand, while IT and IS courses are popular amongst students, it is not surprising that these employers fi nd that the IT and IS graduates (which are much more in abundance than CS and SE graduates) do not meet their expectations.

To be fair, this confusion is not entirely the fault of the employers and the ICT industry. Firstly, nomenclatures of degrees do not clearly refl ect the disciplines. For example in Engineering, the degrees are named based on the distinct discipline such as Electrical Engineering, Mechanical Engineering, and Civil Engineering. Any deviation is scrutinized, and employers know what to expect from the graduates.

However, Computing degrees have been named based on what is perceived as “marketable”. So degrees could be named “Bachelor in Cloud Computing” or “Bachelor in Cyber Security”. Due to the nature of Computing where the body of knowledge can be incorporated in a number of different subjects, even the MQA auditors and evaluators fi nd it very diffi cult to classify these degrees properly. To further confuse matters, all these four disciplines fall under the National Education Code (NEC) of “Computer Science”. Hence there was no way for an employer to be able to ascertain the discipline from the degree name without fully evaluating the course contents and the actual skills of the candidates.

14. See Appendix 2 in the “Program Standards for Computing 2014”.

15. This was both done by PIKOM and MQA at industry forums on this issue.


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Using Standards and their enforcement to minimize confusionGiven that Computing is not governed by a professional body, the next best thing is to leverage on the MQA program standards. The good news is that representatives from the industry, government and academia have worked together to update the MQA “Program Standards for Computing”. Improvements over the previous version have been made to address these problems described above in a number of ways. Focus was given to the degree programs in Computing / ICT fi eld.

The major changes made are in the following areas:• Ensuring that pre-requisites into the courses are aligned to enable the students to cope with

the subjects in the course.• Enforcing the use of degree names that clearly refl ect the distinct disciplines. • Providing methodology and tool that simplifi es the process of evaluating compliance of the

programs from respective disciplines to the standards.• Categorizing CS and SE using the NEC of 481 that corresponds to “Computer Science”, while

IT and IS are given the NEC of 482 that corresponds to “Computer Use”.• Ensuring that all programs will undergo fair evaluation based on the MQA Standards.

The new standards, referred to as the “Program Standard for Computing 2014”, is now being applied to new programs or programs that require re-auditing. Universities are encouraged to evolve and comply with the new standards as soon as possible. It is hoped that the enforcement of these standards will not only help reduce the mismatch between employers’ expectations and graduates’ skills, but also help students to select the right courses based on their interest and capabilities. Given that ICT is central to a majority of Malaysia’s Economic Transformation Program, clear distinction of the different types of degree will allow formulation of better ICT manpower skills development strategy to address our national aspiration and visions.

We need help – employers, industry leaders, government, parentsCompanies and organization employing fresh Computing / ICT graduates should ensure that they select the right candidates for employment. Initial analysis shows that most degrees courses offered by tertiary institutions in Malaysia are either Computer Science or IT, we recommend that employers of fresh graduates to look for Computer Science degree holders if they are expected to develop business critical software. Failing this, they should not be surprised by the potential expectation mismatch that may likely occur.

Furthermore, as Computing / ICT is very central to socio-economic development and technology creation is our interest, it is important for the ICT industry leaders and government to work together to attract the best students back into Computer Science and Software Engineering programs. We will need to convince parents and students on the high demand for software professionals, and the brilliant career opportunities ahead for those who do well. Failure is not an option.

Dr. Dzaharudin MansorNational Technology Offi cer,Microsoft Malaysia.

AcknowledgementThe article represents the collective view of the Panel of Experts involved in the development of the 2014 Program Standards of Computing

Persatuan Industri Komputer Multimedia Malaysia(The National ICT Association of Malaysia)

E1, Empire Damansara,No. 2, Jalan PJU 8/8a, Damansara Perdana47820 Petaling Jaya, SelangorT : +(603) 4065 0078 F : +(603) 4065 0079 E+ : [email protected] W+ : www.pikom.org.my

PIKOM, the National ICT Association of Malaysia, is a not-for-profit organisation. It is the largest association representing information and communications technology (ICT) players in Malaysia. Since its inception in 1986, PIKOM has come of its age as the voice of ICT industry. It has become an ICT referral centre for government and industry players, as well as international organisations. In this regard, PIKOM takes on the responsibility to publish ICT-relevant information in a periodic manner.

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