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Friday, Dec 02, 2022

Pay rises to match pre-Covid levels

Pay rises to match pre-Covid levels

Workers in Hong Kong could see salary increments rebound to pre-pandemic levels, with median pay increases forecasted to hit 3.5 percent next year, a global human resources consulting firm finds.
The Mercer in its annual Total Remuneration Survey 2021 polled 534 organizations across 13 industries in Hong Kong between April and June this year. The survey aims to identify current pay practices and benefits schemes, as well as budget, hiring and turnover trends for the year ahead.

Findings project the overall median salary increments to hit 3.5 percent next year, up from 3 percent this year.

The firm also said the rebounding salary increment percentage reflects "a positive outlook" with a recovering economy and stabilizing pandemic situation in Hong Kong, with the Gross Domestic Product expected to grow by 6.4 percent this year before moderating to 3.5 percent in the coming year.

But Mercer said the city's median pay rise is well below the Asia-Pacific average of 5.4 percent.

Among the industries surveyed, the energy industry in Hong Kong is expected to see the highest median salary increment, of 4.2 percent.

Next are the high tech and insurance sectors, both of which are projected to see increases of four percent, followed by life sciences with 3.9 percent.

While businesses in the consumer goods and transportation equipment sector are likely to maintain their pay increases next year, the logistics industry is the only sector that is expected to see a slight dip, from 3 percent this year to 2.9 percent in 2022.

Brian Sy, Mercer's career products and total rewards consulting leader for Hong Kong, said the rebound in pay increases across various industries is "a good indication" that businesses are getting better for companies overall.

"Industries that are dependent on consumer spending like consumer goods, as well as labor-intensive ones such as transportation equipment and logistics, are more likely to see smaller increments due to the virtually frozen inbound tourism as well as the threat of more infectious variants that could hinder production and trading activities in Hong Kong," he said.

Sy also said businesses might see relatively flat to moderate growth next year and this has only intensified the race for companies to retain talent in a hot labor market, with rising inflationary pressures.

"Turning to financial incentives could be a quick fix but employers need to factor in other considerations such as flexible work and skills-based talent practices into total rewards packages that would set them apart from their competitors in the longer term."

Sy expects the financial outlook for the coming year to be "increasingly optimistic," as Hong Kong's unemployment rate has dropped significantly in recent months and a much lower percentage of companies are expecting to implement salary freezes next year.
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