SMEs, are you concerned with the increasing employees’ costs in your business?

The Malaysian Government, after implementing the increased in minimum wage from RM1,200 to RM1,500 and overtime for worker’s earning less than RM4,000 as opposed to RM2,000 previously, further reduced the minimum working hours to 45 hours from 48 hours with increased maternity leave from 60 days to 98 days coupled with introduction of paternity leave for fathers in the workforce in 2023, is now looking at increasing Employees Provident Fund (EPF). to workers by employers to 20% towards the worker’s EPF.

Presently, employees contribute 11% of their monthly salary to the EPF while employers contribute another 12% or 13% of the salary, depending on the statutory contribution rate.

While such move will increase the income for employee, such continuous and sharp increase instead of gradual means a surge in cost of employees for SMEs. One the consequence is that such increased in cost will be passed down partly or wholly to consumers via further increase in the price of goods or services. This further impact the already high rising costs and/or inflation post pandemic as many SMEs are still working on recovering from the impact of the pandemic and lockdowns.

In addition, with the increase in costs of employees, the workers are also demanded to be more productive and more efficient ie do more to assist to alleviate the cost increased, falling which these workers will be replaced or made redundant as part of the various cost optimisation strategy by SMEs.

In general, the overall average increase in cost is approximately 15% to 25% across and these are fixed overhead commitments.

One of the strategy that SMEs adopt is outsourcing as it will save generally 40% of the cost as compared to in house. Also generally Outsourcing Providers are specialists and are able to optimize their cost from having economy of scale.

How InTune Outsourcing Can Support SME Business Owners?

InTune Outsourcing is one of the Malaysia’s Most Advanced and Top Outsourced Accounting, Finance, HR and Payroll services providers.

We have served more than 400 clients todate and InTune offer full-range services from start up to small to medium-sized companies.

InTune takes away the stress and pains from managing Accounting, Finance, Payroll and HR, including Bookkeeping, Payment Services, Accounts Payable, Accounts Receivable, Payroll and more, by providing an expert team of CPAs and other accounting professionals who understand the special accounting needs of growing businesses.

We can also help in preparing Budgets too as part of our Consultancy Package.