Other plantation companies will have no choice but to respond immediately with incentives for their staff to work harder, says CIMB Investment Bank
Read more: http://www.btimes.com.my/articles/WAGELOW-2/Article/
Kuala Lumpur: The oil palm plantation industry is likely to follow Sime Darby Bhd's pay hike move for its 37,000 estate workers to avoid losing staff and, more importantly, to attract local workers to join the already short-handed industry. Industry executives say other government-linked plantation companies like Federal Land Development Authority, TDM Bhd, and Tradewinds Plantation Bhd are in the process of doing the same thing. CIMB Investment Bank analyst Ivy Ng Lee Fang said over time, other plantation companies will have no choice but to respond immediately with incentives for their staff to work harder. "If the industry does not hike the salaries of their workers, everybody would want to join Sime Darby. Paying above market price will entice locals to join the palm oil industry and make it more competitive." Although raising pay will increase production cost, this could be offset by higher worker productivity if the salaries are linked to performance. TH Plantations Bhd chief executive officer Datuk Zainal Azwar Zainal Aminuddin said the move is timely as a reward for workers in line with high crude palm oil prices. "The salary of plantation workers should commensurate with their hard work and also encourage locals to work and, at the same time, reduce dependency on foreign labour," Zainal told Business Times in a phone interview. In an unprecedented move, Sime Darby Plantation Sdn Bhd on Monday increased the salaries of 37,000 of its estate and mill workers throughout the country, with each of them expected to earn an extra RM200 in basic salary effective July 1.
Read more: http://www.btimes.com.my/articles/WAGELOW-2/Article/
Kuala Lumpur: The oil palm plantation industry is likely to follow Sime Darby Bhd's pay hike move for its 37,000 estate workers to avoid losing staff and, more importantly, to attract local workers to join the already short-handed industry. Industry executives say other government-linked plantation companies like Federal Land Development Authority, TDM Bhd, and Tradewinds Plantation Bhd are in the process of doing the same thing. CIMB Investment Bank analyst Ivy Ng Lee Fang said over time, other plantation companies will have no choice but to respond immediately with incentives for their staff to work harder. "If the industry does not hike the salaries of their workers, everybody would want to join Sime Darby. Paying above market price will entice locals to join the palm oil industry and make it more competitive." Although raising pay will increase production cost, this could be offset by higher worker productivity if the salaries are linked to performance. TH Plantations Bhd chief executive officer Datuk Zainal Azwar Zainal Aminuddin said the move is timely as a reward for workers in line with high crude palm oil prices. "The salary of plantation workers should commensurate with their hard work and also encourage locals to work and, at the same time, reduce dependency on foreign labour," Zainal told Business Times in a phone interview. In an unprecedented move, Sime Darby Plantation Sdn Bhd on Monday increased the salaries of 37,000 of its estate and mill workers throughout the country, with each of them expected to earn an extra RM200 in basic salary effective July 1.
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