Employees in Hong Kong can expect to see their salaries increase by an average of 4.5 per cent in 2014, according to the latest Salary Trends survey by ECA International, the world's leading provider of knowledge, information and technology for the management and assignment of employees around the world.
The figure is the same as the uplift local employees received this year, but with inflation of 3.5 per cent forecast for next year, the projected salary increase amounts to just 1 per cent in real terms.
Increases are likely to be highest in the banking and insurance industries. Those working in transport and logistics are expected to receive slightly below-average uplifts.
"A wage increase of just 1 per cent after adjusting for inflation means that employees in Hong Kong will receive some of the lowest wage rises in the world next year in real terms," said Lee Quane, regional director – Asia, ECA International. "On a more positive note, this real wage increase is actually higher than the increase recorded in 2012, and roughly the same as the one recorded here for 2013."
Despite the marginal increase expected for Hong Kong, Asia as a whole is the region where employees will see the highest real wage increases.
ECA's 2013/2014 Salary Trends Survey reports current and projected salary increases for local employees.
This year, it is based on information collected from 316 multinational companies across 64 countries and regions. 112 companies provided data on their Hong Kong-based staff.
While companies in Singapore are also anticipating 4.5 per cent salary increases next year, inflation is predicted to be lower than in Hong Kong. As a result, employees there will feel better off.
Employees in mainland China look set to experience some of the highest wage rises in the region, both before and after inflation is factored in. Companies there predict salary increases of 8 per cent. Allowing for inflation of 3 per cent in 2014, Chinese workers will see a 5 per cent increase in real terms – the highest in Asia and among the highest worldwide. Employees in Guangzhou and Shenzhen are likely to receive slightly higher increases than their counterparts in Shanghai and Beijing.
"In China, an ongoing need to attract and retain skilled workers, who are in short supply, is driving up wage increases to among the highest levels in our survey," says Quane. "Over time, this trend may significantly narrow the traditional salary gap between China and Hong Kong. Our recent global research on buying power around the world also suggested that Chinese executives could even be better off than their US counterparts by 2017 if the current trends continue. At present, salaries in China are increasing at more than double the pace of salaries in the United States."
Companies in Pakistan are forecasting 13 per cent salary hikes for their staff next year – the highest in Asia. Even with predicted inflation of 8 per cent, employees there are also set to receive the second-highest 'real' increases in Asia after China.
Workers in Japan will continue to experience the region's lowest wage increases. If inflation rises to the 2.9 per cent predicted by the IMF for 2014, they could experience a reduction in their buying power next year.
Wages will rise almost 6 per cent in 2014 on average according to company forecasts from around the globe, with most employers setting increases at the same or very similar levels to this year. Asia, and Latin America are the regions that will see the highest wage increases, with companies there forecasting rises of approximately 10 per cent, and 11 per cent respectively. However, inflation in those regions is also expected to be higher than the global average. In Latin America, for example, increases after inflation will average at just below 1%.
Once again, the survey's highest pay rises are being forecast by companies in Venezuela. Employers there are predicting 26 per cent pay rises for staff next year on average. However, that figure trails well behind inflation forecasts: the IMF is predicting 38 per cent inflation in Venezuela next year, leaving employees there facing a spending power reduction of 12 per cent in real terms.
In both the US and Canada, companies are predicting 3 per cent wage increases, while Europeans can look forward to 3.5 per cent salary rises next year. Employees in the Middle East are set to see an average uplift of 4.8 per cent. Companies in South Africa are forecasting 7% wage rises for their staff.
Factoring in inflation, employees in Asia are likely to receive the biggest average increases in real terms.