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Anna Healy Fenton

Expatriates working for multinational companies in Hong Kong receive perks worth seven times as much as their local counterparts, the widest gap in the Asia-Pacific region, according to a survey by consultants HR Business Solutions (Asia).

The main reason for the difference, particularly with senior executives, is the cost of housing in Hong Kong, which is still the steepest in the region.

An expatriate company boss recruited to work in Hong Kong received on average an annual housing benefit worth US$178,000 per annum (HK$1.38 million), compared with US$93,300 in Singapore and US$80,000 in China.

These figures showed the housing gap had narrowed further down the corporate ladder in different places, with expatriate managers getting US$52,000 annually in Hong Kong, US$46,800 in Singapore and US$41,000 in China.

Elaine Ng, consultant with HR Business Solutions (Asia), said:  'Basically for senior-level expatriates the total difference in perks is very high.

'Although housing costs have come down 50 per cent here since 1997, in relation to other Asia-Pacific countries they are still the highest.'

The survey found that many multinationals still used generous benefits to entice foreigners to senior positions, leading to a wide difference between expatriates and similarly qualified locals.

In terms of housing, children's education, club memberships, cars and travel, Hong Kong expatriate executives received 106 per cent in perks relative to their basic salary - seven times more than locals who received just 15 per cent.

In Singapore, the expatriate figure was 72.6 per cent versus 13.7 per cent for locals, or five times more.

In Japan, the ratio for expatriates relative to basic salary was 79.3 per cent, compared with 15.8 per cent for locals, a difference of five times.

Taiwan was more fair at 47.9 per cent for expatriates and 17.9 per cent for locals.

Expats on the mainland received 58 per cent, the survey found, compared with 24.2 per cent for locals.

Ms Ng said the figures did not always show the true picture as pay and perks were structured differently in some countries, such as India, to maximise tax advantages. 'And in China, there are quite a lot of benefits locally, but Hong Kong is a place where benefits for locals are not a big thing. It's not a question of fairness or unfairness, but different market practices.'

Ms Ng explained that when hiring for senior positions, firms tended to transfer people from their overseas headquarters, or found expatriates already in Hong Kong.

To attract foreigners, companies offered equivalent benefits to those they would receive in their home countries.

'That's one reason why housing costs are high - a guy in America is usually in a big house and he expects that much space here, the same for someone from Singapore,' she added.

'If you hire someone to be your greater China managing director, he would expect the same thing that he has at home, and for that reason you have to bear in mind the cost.'

But these costs would eventually put pressure on the business, she added.

'These multinational companies are always complaining about the expense of running businesses in Hong Kong, but they themselves bear some responsibility for this,' she said.

But she said they would keep hiring expatriates as long as the benefits justified the costs.

When hiring locals, multinational companies usually preferred overseas graduates to locals because of their English skills, she said.

'That's one of the major things in an environment where you need English to communicate with your clients.'



Expats get seven times the perks of local workers