Hong Kong - HK salaries set to see 5% hike

Pay increases to continue into 2012 despite global economic uncertainties, says survey.

Hong Kong workers are set for even fatter pay rises - averaging five per cent - next year despite the global economic uncertainties, according to the latest market survey.

This follows pay increases averaging 4.2 per cent in 2011 - a record high for the past decade - for the city's employees.

The survey, conducted by the Hong Kong Institute of Resource Management from January to October, covered 103 companies with 146,000 full-time staff in 17 different sectors.

The institute, which has been tracking pay adjustments in the city for more than two decades, found that 98 of the companies had already adjusted the base pay for employees in the past 10 months.

The base pay, on average, was raised to a record high of 4.2 per cent, more than doubled than that in the same period in 2011.

The survey showed that top-bracket employees, who get more than HK$1.21 million (S$198, 357) annually, received the biggest pay rise of 4.9 per cent, while general staff who are paid less than HK$320,000 a year, got the least at 4.1 per cent.

Among the 17 business sectors covered, the biggest pay rise was recorded in the financial services industry at 5.8 per cent, followed by the banking and construction sectors, both at 5.2 per cent.

Lawrence Hung, chairman of the institute, said the pay hikes were driven by a strong local economy and an active job market in the first half of the year.

According to the institute, 54 of the firms interviewed said they had already confirmed their budgeted pay adjustments for the first four months of 2012.

More than 98 per cent of their employees will have an average pay rise of five per cent.

Among the 17 business sectors, employees in the financial services field will get the highest pay rise of up to 6.5 per cent, followed by 5.9 per cent in the construction industry.

However, Hung expressed concern that the Eurozone debt crisis and subdued economic growth in the United States will make employers more cautious in budget control.

Many may adopt a "more prudent wait-and-see approach" next year, he said.

The institute also found that fewer employers now have a guaranteed bonus equal to a month's basic salary, while more staff are covered by a non-guaranteed bonus plan.

The survey showed that the size of non-guaranteed bonuses varies among different employee levels.

In 2011, top-level employees received the most, about six times their monthly salaries, while general employees got the least - 1.23 months of their basic pay.

"This is to guard against economic uncertainty. A performance-based reward system provides employers with greater flexibility", Hung said, adding it has become a trend in the past decade.

Guo Jiaxue

Business & Investment Opportunities

YourVietnamExpert is a division of Saigon Business Corporation Pte Ltd, Incorporated in Singapore since 1994. As Your Business Companion, we propose a range of services in Consulting, Investment and Management, focusing three main economic sectors: International PR; Healthcare & Wellness;and Tourism & Hospitality. We also propose Higher Education, as a bridge between educational structures and industries, by supporting international programs. Sign up with twitter to get news updates with @SaigonBusinessC. Thanks.