Pay-hike shock in store for work­ers

China Daily (Hong Kong) - - HK | BUSINESS - By OSWALD CHAN in Hong Kong oswald@chi­nadai­lyhk.com

If you’re dream­ing of reap­ing a big fat pay rise next year af­ter hav­ing toiled for so many years, you’re prob­a­bly liv­ing in fan­ta­sy­land.

Ho n g Ko ng ’s ec o n o m i c un­cer­tainty, as well as the con­tin­ued slow­down on the Chi­nese main­land, will be the crux of the mat­ter as bosses pon­der over how much they would re­ward their staff — they’re more likely to tighten their purse strings and be less gen­er­ous — ac­cord­ing to the lat­est sur­vey by global hu­man re­sources con­sul­tancy ECA In­ter­na­tional.

Hong Kong’s real salar y growth rate (nom­i­nal wage growth mi­nus the in­fla­tion rate) will be just 1.4 per­cent in 2017 — the third low­est in the Asia Pa­cific re­gion — although it’s pro­jected to hit an av­er­age real wage growth of 2.6 per­cent.

How­ever, pro­fes­sion­als in the high-fly­ing in­for­ma­tion­tech­nolog y field may find more room for com­fort, see­ing the high­est av­er­age salary in­creases, while work­ers in the city’s bat­tered re­tail busi­ness would find them­selves at the bot­tom of the lad­der, says a sep­a­rate sur­vey.

The ECA poll, pub­lished on Nov 9, cov­ered 260 multi­na­tional com­pa­nies in some 72 coun­tries and re­gions, in­clud­ing more than 90 en­ter­prises in Hong Kong. They were asked to re­port on ac­tual salary in­creases for their man­age­rial staff for 2016, as well as pro­posed wage hikes for next year.

It said Hong Kong, like other de­vel­oped economies with a low in­fla­tion rate, has the low­est rate of salary in­creases, re­flect­ing slug­gish global eco­nomic growth.

“The Chi­nese main­land is, by far, the big­gest mar­ket for Hong Kong’s vi­tal ex­port sec­tor and, with the main­land econ­omy hav­ing slowed sig­nif­i­cantly, Hong Kong’s (salary growth) has suf­fered ac­cord­ingly,” said Lee Quane, ECA’s re­gional di­rec­tor of Asia.

“The poor prospects for real salary growth in Hong Kong also re­flect the im­pact of a lack of con­sumer con­fi­dence and de­layed eco­nomic re­cov­ery,” Quane added. “Ma­ture economies like Hong Kong de­pend on con­sumer spend­ing to fuel eco­nomic growth so that the pro­jected slow real wage growth will ex­ert a more knock-on ef­fect on the lo­cal econ­omy.”

The SAR’s un­em­ploy­ment rate in the Septem­ber-Novem­ber pe­riod slipped to 3.3 per­cent from 3.4 per­cent for the Au­gust-Oc­to­ber pe­riod, while to­tal em­ploy­ment fell by 4,000 jobs to 3.8 mil­lion, with 130,600 peo­ple out of work.

Sec­re­tary for Labour and Wel­fare Matthew Che­ung Kinchung has warned that the la­bor mar­ket will re­main tight in the near term, and that a highly un­cer­tain ex­ter­nal en­vi­ron­ment could po­ten­tially im­pact the lo­cal econ­omy in the longer term.

Pop­u­lar job re­search por­tal by job­sDB said in a re­port it ex­pects next year’s av­er­age nom­i­nal pay rise to be 3.7 per­cent — slightly higher than the 3.4 per­cent for 2016.

Pub­lished on Dec 1, the re­port said em­ploy­ees in the in­for­ma­tion-tech­nol­ogy field would get the high­est av­er­age pay hike of 5.9 per­cent, war­ranted by an acute short­age of tal­ent in this sec­tor. Staff in the con­struc­tion, ed­u­ca­tion and re­tail in­dus­tries could look to av­er­age in­creases of 4.9 per­cent, 5.5 per­cent and 4.4 per­cent, re­spec­tively.

Although salaries in 2017 are es­ti­mated to rise more than this year, the sur vey shows that only 74 per­cent of em­ploy­ers plan to of­fer pay in­creases next year — less than the 79 per­cent in 2016 and sig­nif­i­cantly lower than the 91 per­cent in 2015.

“This may in­di­cate that, in times of eco­nomic un­cer­tainty, em­ploy­ers try to be cau­tious in de­ter­min­ing pay rise lev­els next year,” job­sDB Hong Kong Gen­eral Man­ager Justin Yiu Chi-man told China Daily.

US-listed hu­man re­sources agency Man­pow­erGroup pre­dicted that Hong Kong work­ers may en­joy an av­er­age nom­i­nal 2 to 4-per­cent pay hike in 2017. “The ac­tual growth rate de­pends on eco­nomic sit­u­a­tions, en­ter­prises’ fi­nan­cial ca­pa­bil­i­ties and staff per for­mance,” said L anc y Chui Yuk-shan, se­nior vi­cepres­i­dent at Man­pow­erGroup Greater China re­gion.

Work­ers in the in­surance, e-com­merce, in­for­ma­tion­tech­nol­ogy and con­struc­tion busi­nesses would re­ceive an av­er­age of 5 to 8-per­cent nom­i­nal pay hikes, while their peers in the re­tail, bank­ing and avi­a­tion sec­tors would see an av­er­age of 2 to 4-per­cent growth, Man­pw­erGroup said.

“Although a mas­sive wave of staff lay­offs is not an­tic­i­pated, some small- and medium en­ter­prises in the re­tail, food and bev­er­age sec­tors, as well as man­u­fac­tur­ing, would en­counter dif­fi­cul­ties in their op­er­a­tions, prob­a­bly re­sult­ing in pay rises be­ing frozen and small-scale staff lay­offs,” Chui warned.

In it s Ma np o w e r G r o u p Em­ploy­ment Out­look Sur­vey for the first quar­ter of 2017, the re­cruit­ment agency said it in­ter­viewed 728 Hong Kong com­pa­nies which said they ex­pected their staff lev­els to in­crease steadily in the next three months.

Hong Kong was among 43 coun­tries and re­gions that took part in the sur­vey. In the Asia Pa­cific re­gion, em­ploy­ers in Tai­wan and In­dia re­ported the strong­est first-quar­ter hir­ing plans, while those on the Chi­nese main­land and in Aus­tralia and Sin­ga­pore re­ported the weak­est. Hong Kong’s score was in the mid­dle, with its net em­ploy­ment out­look stand­ing at +13 per­cent.

Wi l l i s To we r s Wa ts o n (WTW) — a global em­ployee ben­e­fits so­lu­tion provider — says pay in­creases in the tech­nol­ogy sec­tor will be higher

Ma­ture economies like Hong Kong de­pend on con­sumer spend­ing to fuel eco­nomic growth so that the pro­jected slow real wage growth will ex­ert a more knock-on ef­fect on the lo­cal econ­omy.” In times of eco­nomic un­cer­tainty, em­ploy­ers try to be cau­tious in de­ter­min­ing pay rise lev­els next year.” real salary growth rate for Hong Kong work­ers in 2017, as pro­jected by ECA In­ter­na­tional av­er­age nom­i­nal pay rise for Hong Kong em­ploy­ees in 2017, as pro­jected by job­sDB

than those in the city’s tra­di­tional fi­nance sec­tor.

Salaries in the bank­ing sec­tor are pro­jected to go up by 3.6 per­cent in 2017 — lower than the wage growth rate of 4 per­cent for the high-tech­nol­ogy sec­tor — ac­cord­ing to TWT’s 2016 Asia Pa­cific Salary Bud­get Plan­ning Re­port (Q3). Con­ducted in July this ye a r, th e su r v e y so l i c i t e d 4,000 com­pany re­sponses across 22 mar­kets in the Asia Pa­cific.

“As tra­di­tional banks move their ser­vices on­line in the hope of stay­ing com­pet­i­tive, and bet­ter meet­ing cus­tomers’ evolv­ing de­mands via dig­i­tal trans­for­ma­tion, they’re com­pet­ing for the same pool of skills as the tra­di­tional high-tech­nol­ogy sec­tor,” said Samb­hav Rakyan, Asia Pa­cific data ser­vices prac­tice leader at WTW.

“It does not nec­es­sar­ily mean that tech­nol­ogy tal­ents will get more in a mon­e­tary sense, but it does in per­cent­age terms,” he added.

JUSTIN CHIN / BLOOMBERG

The prospects of Hong Kong em­ploy­ees get­ting hand­some salary in­creases in 2017 don’t seem bright as the city re­mains stuck in a slow­down amid global and re­gional eco­nomic un­cer­tain­ties.

ROY LIU / CHINA DAILY

Em­ploy­ees in the in­for­ma­tion tech­nol­ogy sec­tor are likely to see the high­est av­er­age salary in­creases next year, as fin­tech (fi­nan­cial tech­nol­ogy) re­mains the buzz word.

Justin Yiu Chi-man, job­sDB Hong Kong gen­eral man­ager

Lee Quane, ECA’s re­gional di­rec­tor of Asia

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