Hong Kong Employers Forecast Base Pay Adjustment of 4.4 Percent
Hong Kong employers are projecting an average base pay adjustment of 4.4 percent during the period January to April, according to the Hong Kong Institute of Human Resource Management (HKIHRM). The new projection is close to the base pay adjustment forecast of 4.6% captured in October 2012.
The HKIHRM 2012 Pay Trend Survey - Follow-up Survey on 2013 Forecasted Base Pay Adjustment covers a total of 72 companies from 16 industry or business sectors.
Among the 72 surveyed companies, 46 of them, employing 49,615 employees, will have their base pay adjustment during the period January to April. They indicated their pay adjustment forecast during the survey period (January) and provided relevant base pay adjustment data.
All 46 companies indicated that they would have an overall budgeted pay increase. The forecasted average base pay adjustment by all these companies is 4.4% (weighted average), 0.2 percentage point lower than the forecast of 4.6% captured in October 2012.
By business sector (of those that provided sufficient data for analysis), companies projecting relatively higher pay increases are found in construction (6.1%), followed by property development/management (5%), engineering (5%) and non-governmental organisation (5%) sectors.
In terms of employee numbers, all employees may expect to receive a base pay increase. There is no indication of any zero or negative base pay adjustment.
“The latest pay adjustment forecast figure is close to that the Institute released in November 2012. Some sectors which experienced faster expansion or talent shortage, such as construction, engineering and property development/management, continued to report relatively higher pay adjustments," comments Lawrence Hung, Chairperson of the Remuneration Committee of the HKIHRM.
"In contrast, externally-oriented sectors like banking, financial services and manufacturing anticipated relatively lower average pay adjustment forecasts in the range of 3.8% to 4%. Moreover, a slower growth in tourism might have some impact on sectors like retail and hotel, their pay adjustment forecasts dropped when compared with last projections announced in November 2012."
Fifty-one participating companies responded to the question on whether they had revised their base pay adjustment forecast in 2013. Over half of the respondents (55%) kept their original forecast. 11.7% raised their forecast while 21.6% lowered their forecast.
The top four reasons for making a change in the base pay adjustment forecast are uncertainties and risks in the business environment (53.3%), market pay adjustments (53.3%), worldwide economic downturn (26.7%) and competitors’ pay adjustments (26.7%).
“External and internal socio-economic factors as well as market benchmarks of individual business sectors have impact on base pay adjustment. It is believed that 2013 will be a year full of economic challenges. The quantitative easing measures by the US government, economic uncertainties in the Euro zone, together with a new factor, the depreciation of Japanese yen following a new government monetary policy, all give rise to concern about continuous excessive liquidity in the global financial market. Employers at large will have to consider any rise in operation costs, as well as employee expectation on pay adjustment," notes Hung.