Page 174 - Contributed Paper Session (CPS) - Volume 8

CPS2228 Mohd Zulhairi Omar et al.

Correlation between salaries and number of
employees in manufacturing sector with the
presence of outliers
Mohd Zulhairi Omar, Syed Samshiee Syed Abd Kadar, Umi Salmah Zainol
Department of Statistics Malaysia

Abstract
This study is to focus on correlation between salaries and number of
employees in manufacturing sector in Malaysia from June 2017 to June 2018.
This study used the data from Monthly Manufacturing Report that be
published by Department of Statistics Malaysia (DOSM) on June 2018 that
covers 155 out of a total of 259 industries in the Manufacturing Sector (based
on the Malaysia Standard Industrial Classification, 2008). This study involves
on applying the classical and robust r measure between salaries and number
of employees. Apart of classical correlation coefficient, robust correlation
coefficient can be used to show the relationship because it is less affected by
outliers. The result of the study indicates that there is a linear relationship
between the salaries and number of workers with the presence of outliers.

Keywords
Outliers, relationship, salary, employees, manufacturing, Monthly
Manufacturing

1. Introduction
Manufacturing is one of the main contribution sectors for Malaysia’s
economy. It contributes 23.6% (RM 70.8 billion) of gross domestic product
(GDP) for second quarter of 2018, increase by 0.1% compare to second quarter
of 2017 (RM 67.5 billion). This growth is contributes by manufacturing of
electric and electronic products, petroleum, chemical, rubber, plastic, transport
equipment and other repair products.
Based on Monthly Manufacturing Statistics Malaysia, June 2018, number
of employees that engaged in the Manufacturing sector in June 2018 was
1,070,776 persons, an increase of 2.2% or 22,556 persons as compared to
1,048,220 persons in June 2017. Total of salaries that be paid in June 2018 is
RM 3.86 billion as compared to RM 3.50 billion, an increase of 10.2% or
RM357.2 million. The result shows that as more employees were appointed to
the sector, more money will be spent for their salaries.
The relationship between total of salaries and number of employees has
been discussed often by many researchers such as Ho and Yap, 2001 and
Nailah et. al, 2012. However, it is mainly focus on productivity rather than
number of employee and involves all the economic sectors. Hence, this paper

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