Pay trends point to greener pastures across the border
The brisker pace of salary growth on the mainland will soon leave arguments about higher base levels in HK looking in need of work
Every year at this time, many people will begin to think about the same thing - how big a pay rise can I expect for the coming year?
In recent years, salaries on the mainland, especially in some major industries such as finance, property and technology, have been catching up with Hong Kong levels. Of course, there is still a gap, but it is getting narrower every year, partly thanks to bigger rises on the mainland, and barring surprises, this trend will continue for the coming year.
A recent survey released by human resources consultancy Towers Watson shows salaries on the mainland are predicted to rise 8.5 per cent next year, compared with an estimated 4.5 per cent for employees in Hong Kong. This is in line with an estimate by the Hong Kong Institute of Human Resource Management, which expects Hong Kong employers to give 4.4 per cent pay rises on average for the coming year.
In fact, if the numbers are proved to be correct, I would say it means no pay rise for Hong Kong employees in real terms if you take the city's inflation growth into consideration.
On the other hand, given the widely accepted view for a stronger yuan and a weaker Hong Kong dollar for the years to come, at some point, the gap in average salary levels between the mainland and Hong Kong will come to an end - or even reverse.
In some businesses, it may already be happening.
According to my intelligence on the financial job market in Shanghai, a major foreign bank recently decided to hire a corporate affairs department head for its China headquarters in the city. The foreign bank offered the position at a salary of about 50,000 yuan after tax per month.
At just over at HK$63,000, the pay is higher than for a similar job at some banks or fund management firms in Hong Kong, which may explain why the foreign bank in Shanghai has received a handful of applications from experienced professionals who are now working in Hong Kong.
The other side of the story is that Hong Kong employers find it difficult to attract mainland talent, who are already fully aware of the city's famously (or infamously) high living costs, particularly for home rents.
Perhaps the rarely talked-about bonus among many mainland students in Hong Kong who decide to stay in the city for work after graduation - despite disappointing salary levels - is the chance of qualifying for a Hong Kong passport.
Money-wise, I bet it will get more and more attractive on the mainland rather than in Hong Kong.
When we try to compare the pace of pay rises between Hong Kong and the mainland, many people will say the city has no need to worry about the smaller rises because our salary base is believed to be much higher than on the mainland.
But I think this "low base" thing cannot work as a good excuse year after year.
The only so-called black swan factor I can think of that may change the trend is the collapse of the mainland economy, already the world's second-largest. But if that happened, it would definitely mean a disaster for the Hong Kong economy, too.
George Chen is the Post's financial services editor. Mr. Shangkong appears every Monday in the print version of the SCMP. Like it? Visit facebook.com/mrshangkong