Salary gap between Hong Kong and Shanghai senior managers narrows

The salary gap between senior managers in Hong Kong and those in Shanghai has narrowed over the past year, with executives receiving only 10 per cent more than those based in the mainland's financial hub, a new study has found.

Overall differences in pay between the mainland and Hong Kong have also shrunk, particularly in the fields of manual and production work, reflecting the mainland's rising labour costs, according to a study by Towers Watson, a professional services company.

People doing manual and production work on the mainland have seen a pay rise of 12 per cent on average, whereas those in Hong Kong were only paid 2 to 3 per cent more in the past year, according to the study. However, it pointed out that Hong Kong workers were still paid three times more than those on the mainland.

Given Hong Kong's favourable tax environment, the city is still viewed as more attractive for people in senior and top management positions, which has led some mainland companies to increase bonuses and other benefits, opening up fresh competition with multinationals.

Sambhav Rakyan, data services practice leader for Asia Pacific at Towers Watson, thinks the narrowing pay gap at management level between Shanghai and Hong Kong reflects intensifying competition for talent in the two cities.

The study also finds that top managers in Hong Kong are the second-highest paid in the Asia Pacific region, with managers in Singapore having the highest salaries without taking into consideration company benefits and other bonuses.