Businesses more 'conservative and cautious' due to global economy, says expert
Pay increases in Hong Kong lagged by two per cent compared to other major cities in the Greater Bay Area (GBA) this year, according to a new report from the Hong Kong Institute of Human Resource Management (HKIHRM).
The institute's 2023 Pay Trend Survey analysed data from over 200 companies and over 130,000 employees in Hong Kong, as well as over 380 organisations and over 155,000 employees in GBA cities, including Shenzhen, Guangzhou, Zhuhai, Zhongshan, Dongguan, Huizhou, Jiangmen, and Zhaoqing.
The pay hike in Hong Kong increased by 0.3 percentage point to 3.8% in 2023, according to the report, while employees in the GBA had an average salary increase of 5.5%.
Even the projected increases for 2024 saw Hong Kong behind other GBA cities, according to the report.
Among 139 organisations in Hong Kong that provided projected data for 2024, 62% forecast a pay rise next year, with the average projected adjustment being 4.1% upward.
For GBA cities, only 28% forecast a pay rise next year, while 68% have yet to make projections. Those who are expecting pay increases, however, estimate the average projected pay adjustment to 5.4% upward.
Lawrence Hung, president of the HKIHRM, attributed Hong Kong's lagging pay rises to the current business atmosphere.
According to Hung, Hong Kong businesses have become more "conservative and cautious" due to the global economy and the serious talent shortage situation.
According to the report, nearly all employers (98.6%) in the survey offered a pay increase, while only 1.4% froze their employees' pay.
Among employees, 93.2% of them said they enjoyed a pay rise, while 6.8% experienced a pay freeze. Middle-level staff received the largest pay adjustment at 3.9%, followed by top-level staff with 3.8%.
Business performance was the biggest factor that employers considered in pay adjustment, according to the employers surveyed, followed by employees' individual performance.
In term of bonuses, the average size of guaranteed bonus in 2023 is slightly lower with 1.04 months of base pay, down from the 1.09 months from last year.
For GBA cities, 71% of employers surveyed said they offered a pay increase, while 29% implemented a pay freeze.
R&D/technical staff received the largest pay adjustment at 7.3%, according to the report, while fresh graduates got a 6.3% increase.
Promoted employees also got a 10.3% increase, the highest among all employee types, while core/excellent employees received 9.7%.
In terms of bonuses, the average guaranteed bonus was at 1.04 months of base pay, according to employers who provided data on the incentive.
Non-guaranteed bonuses were also offered by 91.7% of employers who provided data on the matter, with the average size being 1.30 months of base pay.
