Time to rev up and pay up
For the lucky few in Hong Kong, work may be all about 'following your passion' and letting the finances take care of themselves. But for the vast majority, pay and benefits are always one of the first considerations, having a major bearing on career choices, individual motivation, and job satisfaction.
This year, the focus on salaries is particularly intense. Employees can see headline inflation creeping up. They know companies in many sectors are once again reporting very healthy profits. And, in certain cases, they still remember the pay freezes and 'we're all in this together' rhetoric that marked the darkest days of the recent recession.
Employers are also fully aware that, as they gear up for growth, they will need more good people. They know that money talks, and the best people deserve a premium. And with the job market expected to show steady progress in the months ahead - notably for specialist skills and mid- to senior-level roles - qualified candidates will be in a stronger bargaining position.
Tracking trends in key sectors of the local economy, two leading recruitment firms have just issued their latest salary surveys. In brief, the results show wages rising across the board, but with employers also looking to tie pay more closely to performance.
Anthony Thompson, managing director of Michael Page International for Hong Kong and South China, highlights feedback showing that 42 per cent of employers are awarding salary hikes of 4 to 6 per cent this year, while 26 per cent are looking at increments of 3 to 4 per cent.
Slightly more than 60 per cent of respondents said salaries would rise more than the rate of inflation over the next 12 months, attributing this to a general skills shortage. And 75 per cent confirmed they would award bonuses based on a combination of team, company and individual performance measures.
'For employers, the key concerns continue to be the development and retention of top talent,' Thompson says. 'The challenge [this year] will be how to reward and offer incentives to their staff, which can include providing interesting projects to work on.'
As ever, market forces will largely dictate, factoring in sector norms, relevant experience, seniority, and scarcity value. Given those parameters, professionals widely seen as 'in demand' - such as internal auditors, HR specialists and corporate governance experts - are already learning that they can expect above-average increases.
Using engineers and supply chain professionals as an example, Thompson also notes that employers wanting to bring in new talent may need to offer suitable candidates 10 to 15 per cent above their current salaries to entice the best. And to retain top performers, bonuses of 15 to 30 per cent on base terms might be necessary.
Referring to the findings of his own company's survey, Matthew Bennett, managing director of recruitment consultancy Robert Walters, predicts strong hiring this year in retail, education and tourism. This, in turn, should boost opportunities in IT support, marketing, supply chain, HR, and luxury sales.
Savvy employers are expected to budget for salary hikes and perhaps review targets and short-term incentives, in particular for staff in frontline or revenue-generating positions.
'In commercial sectors, most job movers will secure salary increments of 15 to 20 per cent,' Bennett says. 'Employers will be willing to pay a premium to attract top candidates to new roles.'
Citing just one example, he suggests that an HR professional with six to 10 years' experience of organisational development and change management might have expected a base salary of HK$700,000 last year. Rising demand for these skills might now command a starting salary at least HK$50,000 higher.
For other sectors, Bennett expects to see more caution, such as in the operations and projects units of finance companies. 'Banks and financial services firms may adopt a wait and see approach in the first half. We anticipate most hiring to occur on a replacement basis, but compliance and governance professionals will be able to get increases of 20 to 25 per cent [if moving jobs],' he says.