Hong Kong bosses to ease up on pay rises as economy limps along
Survey indicates average increases of 3.5pc to 3.8pc in 2017 as slowing GDP growth and falling visitor numbers to the city take their toll
Hong Kong workers are about to feel the pinch as companies facing the effects of the city’s economic downturn seek to rein in costs by lowering salary increases.
The Hong Kong People Management Association’s annual pay trends survey projected average pay rises of 3.5 to 3.8 per cent in 2017, down from 3.9 to 4.1 per cent this year and 4.3 to 4.7 per cent in 2015.
More than 95,900 employees from 84 companies across the city were questioned.
Meanwhile, results of another survey revealed greater pay rises for employees on the mainland. The association projected pay increases ranging from 4.9 to 5.1 per cent in 2017 for mainland workers.
Dr Felix Yip Wai-kwong, senior lecturer at Hong Kong Baptist University’s department of management, said the city’s economic development had reached a “saturation phase”, with employers adopting more conservative salary review strategies.
“Once you have issued the pay rise, it’s hard to take it back and it would lead to a ripple effect,” he said.
The vice-president of the association, Viola Wong, said the city’s slowing GDP growth and a negative outlook in vital areas of the economy had contributed to easing salary levels.
She said falling inbound tourism and visitor numbers had inevitably affected Hong Kong’s economy.
“Tourism is one of the city’s four pillars of economy. The retail and service industries are just some of the sectors that would take a hit,” she explained.
Alexa Chow Yee-ping, managing director of AMAC Human Resources Consultants, believed most employers from the retail and hospitality industries would decide next year’s pay rise level only after Christmas, or even the Lunar New Year in late January.
“These are the traditional peak seasons for these industries, and their annual results would much depend on sales performance during this period,” Chow said.
She pointed out that the US presidential election in November also added uncertainty to the global economy, causing employers to be extra cautious when gauging the short-term outlook.
But there were still ways to buck the gloomy trend, the human resources expert said. “If your job position is sought after in the market – computer programmers, compliance professionals and company secretaries, for example – then you could definitely expect a much bigger salary bump.”
Separately, the Hong Kong Institute of Human Resource Management put the overall staff turnover rate in the first six months of this year at 10.2 per cent, slightly lower than 10.8 per cent in the same period last year.
The job vacancy rate dipped from 6 per cent in the first half of 2015 to 5.2 per cent between January and June, although one in 10 positions in the retail sector remained unfilled.