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SCMP Reporter

TWO of Hong Kong's major employers have ended the practice of providing expatriate packages of generous allowances for employees recruited overseas.

  The Hongkong Bank and the Mass Transit Railway Corp (MTRC) have ceased offering overseas recruits the fringe benefits which were expected in the past.

  ''We still have our cadre of international officers who move from country to country and are expats everywhere,'' said Brian Renwick, senior personnel manager at the bank.

  ''But those recruited purely to work in Hong Kong no longer receive expat packages. Locals and overseas workers are employed on the same terms,'' he said.

   The decision has so far only affected small numbers of bank recruits - perhaps 10, according to Mr Renwick.

   Mr Renwick spoke of the decision yesterday at a workshop on common terms of employment run by the Employers' Federation of Hong Kong.

  The board of Hongkong Bank actually took the decision in the middle of last year but deferred announcing the move, he said.

   The MTRC took a similar decision in November, according to Patrick Maule, personnel director of the government-owned corporation.

   So far the decision has affected few new workers. But if and when the go-ahead is received to build the airport railway, up to 1,000 overseas-recruited managers and senior engineers could find themselves offered different terms of employment to those already aboard the company's expatriate gravy train.

  The very top echelon, numbering perhaps 35, would continue to receive attractive perks but locals would also get them, said Mr Maule.

  Earlier, Paul Cheng Ming-fun, chairman of the Hong Kong General Chamber of Commerce and Inchcape Pacific, said most of the arguments in favour of expatriate packages no longer applied.

  Expatriate packages, including extra leave, tickets home, housing, cars, club membership and school fees have long been the norm for senior executives from overseas.

  Mr Cheng said previously three main arguments were made for the packages: the hardship of the posting, economic reasons and professional skills.

  ''Even up to 10 years ago there might have been some merit in the hardship argument,'' he said. But he added: ''Today, Hong Kong is short of nothing.''   The economic argument ran that without a substantial economic incentive people would not be interested in working in Hong Kong, he said. That situation had been changed by recession in Europe and North America, he said.

  ''Many people in the West now consider themselves lucky to have a job, let alone any thought of a pay rise,'' Mr Cheng said.

  The skills argument was based on a shortage of locals with relevant skills, which is now only true in a very few cases.

  Mr Cheng said many companies were now moving to a policy of pay equalisation where expatriate packages might be trimmed down and local packages bumped up.

   He said his own company had not made any such moves. ''We are reviewing the situation. We want to see what our competitors are doing.''   The issue was closely linked to maintaining Hong Kong's competitive position as a good place for overseas companies to come to do business, he said.

  ''Our competitive edge is being threatened. Preventative medicine is better than a cure,'' he said.

  Mr Cheng said the three major elements of cost were salaries, property prices and tax. ''We are delighted the Government has trimmed corporation tax by one per cent. Salaries are going up in double digits each year, rental increases have reached a crazy level - something has got to give.

  ''We are moving towards a situation where the deciding factor in determining a person's employment package will not be whether he or she is an expatriate or a local but, plainly and simply, market forces.''   Stanford Millar, managing director of KPMG Peat Marwick's local corporate consulting arm, said the trend for ''equalisation'' had been going on for three years.

   ''Many or most of the local firms have already switched over,'' he said.



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