Editorial | Workers expect to feel benefit in pay packets as Hong Kong’s economy improves

The steady post-Covid economic recovery has put many businesses back on their feet. While bosses may finally heave a sigh of relief, employees, many of whom have shared the pain by taking pay freezes or cuts in recent years, are also looking forward to more favourable adjustments. This is especially so when the improving job market has provided more opportunities. It would do well for bosses to better reward their staff, taking into account individual performance, the financial strength of companies and the market situation.

According to a Baptist University study, Hong Kong workers enjoyed an average pay rise of 3.2 to 3.8 per cent in the past year. The range is said to be the highest among Greater Bay Area cities, where adjustments were as low as 2 per cent. For instance, Guangdong firms offered their staff increases of between 2 and 2.2 per cent, while rises in Macau ranged from 1.9 to 2.7 per cent. But also noteworthy was that a few responding companies imposed a pay freeze.

Another survey by the Hong Kong Institute of Human Resource Management gave a somewhat different picture. While noting local firms offered a similar average of 3.8 per cent in 2023, those in the Greater Bay Area recorded an average rise of 5.5 per cent. But more mainland companies froze salaries at the same time, with one-fifth reporting cuts in pay adjustment budgets.

On a more positive note, both sources expect pay rises to be awarded in the coming year. Local firms in the university poll were projecting an average pay rise of between 3.5 to 3.8 per cent, while the institute reported a possible average increase of 4.1 per cent among nearly two-thirds of respondents.

Unlike lawmakers whose salaries and office allowances are tied to the consumer price index rather than performance, most workers have to earn their rises. For employers, pay adjustments will also be considered in light of company performance and the economic situation. Evidently, profit-making industries are in a better position to offer more competitive packages, but the uncertainties ahead may also prompt employers to exercise caution. That explains why a few firms in the institute’s survey had already decided to freeze pay in the coming year, while more than one-third had yet to make a forecast.