The lack of clear indicators in the global economic outlook may have prompted employers to remain prudent in their pay strategies. However, when talent shortage is still an issue to address in some sectors, flexibility in pay adjustments for talent retention is certainly necessary for corporate development and sustainability, according to the 2013 Pay Trend Survey conducted by the Hong Kong Institute of Human Resource Management (HKIHRM).
Seventy six companies (having a total of 114,832 employees and making base pay adjustment between January and September 2013) out of the 97 participating companies confirmed their pay adjustment during the survey period (January to September) and provided relevant base pay adjustment data for analysis.
The overall average base pay adjustment recorded for these 76 companies was 4.4% (weighted average), 0.1 percentage point lower than the figure recorded for the same period last year (4.5%). The figure was very close to a forecast of 4.6% announced by the HKIHRM in November 2012 and identical to another forecast of 4.4% announced in March 2013.
The survey also reveals that 75 out of these 76 companies (98.7%) offered an overall base pay increase as compared to 97.9% in the same period of 2012. One surveyed company recorded an overall zero base pay adjustment while no surveyed company recorded an overall negative base pay adjustment.
The top three sectosr which offered the highest overall base pay increase are construction and retail (both at 6.2%) and engineering (4.5%).
Of the 114,832 employees concerned, 91% received a positive adjustment in base pay, 8.9% zero adjustment and a 0.1% negative adjustment.
"The actual average pay rise figure for 2013 is 4.4%, which is the same as the institute's forecast announce in March this year," notes Francis Mok, President of the HKIHRM. "Without foreseeable particularly favourable or unfavourable factors in the labour market, employers made pay adjustments which followed their original plans. However, they have to consider other factors as well, such as company performance, individual performance, market benchmark and competitors' pay adjustments."
Thirty eight participating companies, which will have base pay adjustment in the period from January to April 2014, confirmed their budgeted adjustment and provided data. Among these 38 companies, 97% (37 companies) indicated that they would have an overall budgeted pay increase while 3% (one company) forecasted no pay adjustment. No company projected a pay reduction. For these 38 companies which have budgeted pay adjustments, the overal forecast adjustment is 4.4%.
"There are still concerns about some global economic factors such as the Euro crisis, direction of the United States monetary policy, and economic growth in mainland China," said Mok. "Views on the global economic climate remain uncertain. Facing continuous economic uncertainties in 2014 and the prevailing issue of talent shortage, employers may rather wait and see when deciding on their pay strategies to ensure corporate sustainability at any unpredictable economic turbulence."