Pay-hike shock in store for workers
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.
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.
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