Finance Talent in Hong Kong: Stay Put or Switch Jobs?

After years of negative global economic outlook, the tide seems to be finally turning. Companies are becoming more optimistic than we have seen in a long time, despite the current (and possibly short-lived) currency and stock-market volatility in Asian emerging markets.  
Is the optimism rubbing off on hiring and salary trends?
Not yet, say executive recruiter Michael Page’s Andy Bentote, Senior Managing Director for Hong Kong and southern China, and his colleague Christopher Aukland, Regional Director (Hong Kong). People are still “cautiously optimistic,” a phrase used frequently to refer to the economic future in Asia.
That also covers salary increases that can be expected in Hong Kong, Singapore and others places Asia. The good news for companies: CFOs and HR managers looking at containing salary costs, typically the biggest operational expense in most organizations, will have some breathing room.
The really big increases may come in 2015 yet, if this year’s more optimistic outlook is realized and turns into a sustainable economic boom.  “When the economy is looking good, [companies] go and hire,” says Aukland. “When they find it difficult, salaries go up.”
Wages and GDP Growth
According to Michael Page, Hong Kong employees can expect a modest salary increase of 1-5 % in 2014.  In contrast, Singaporeans will see a slightly smaller salary increase than in Hong Kong, at 3%, in line with expected inflation there. In China, which is still more of a developing market with serious skills shortages, employees can expect a salary increase of 7-10%.
Hong Kong’s GDP is expected to have risen 3% last year while Singapore’s economy expanded 4.1%. China reported GDP growth of 7.7% in 2013. The pace of growth is lower than in recent years, but still much higher than the growth rates in the US, Japan and Europe.
The projections for 2014 are brighter, at this stage, with Hong Kong forecast to grow 3.6% and China 7.5%. Singapore’s GDP is expected to expand at the higher end of the 2-4% range.  
For now, according to the Michael Page Hong Kong Salary & Employment Forecast 2014, Hong Kong’s labor market is at the wait-and-see stage. While there are signs of optimism, companies are just not sure what will happen, so they are holding off on more hiring – and thus on salary increases as well.
The majority (52%) of the more than 500 employers surveyed see hiring activity as steady in 2014, as opposed to growing stronger (33%) or weaker (16%).  
Recruitment in Hong Kong
Strength of current hiring activity compared to last 12 months
Source: Michael Page Hong Kong Salary & Employment Forecast 2014
However, Bentote says the steady-as-she-goes picture may very well look completely different in about six months. Indeed, nearly nine out of ten of Hong Kong companies – 89% – anticipate that a skills shortage will eventually place upward pressure on salaries, with 59% saying it will cause a wage rise above the inflation rate.
Pressure on Salaries
Source: Michael Page Hong Kong Salary & Employment Forecast 2014
Please Don’t Go
All bets are off, however, when it comes to the financial services sector and among specialist posts such as financial planning and analysis, compliance and risk. When Hong Kong professionals in these fields switch jobs, says Michael Page, they can expect their new salary to be up to 20% more than in their previous job.
In China, specialists who switch jobs can expect a salary increase of 15-20%, although that is already lower than the average 25% salary increase a few years ago. What is happening in China is that the labor market, particularly for professionals, is getting more mature, says Michael Page.  
According to the recruitment firm’s survey, half of companies in Hong Kong expect to see staff turnover in the next 12 months. The key reason for the expected departure is the quest for a higher salary (39%).
Leave, Stay, Don't Know
Do you expect people to leave in the next 12 months?
Click image to enlarge
Key Reasons for Leaving
Source: Michael Page Hong Kong Salary & Employment Forecast 2014
Michael Page also expects increased demand  for – and thus possibly higher incidence of job switching among – the following finance and accounting posts:
  • Financial accountants within global businesses for regulatory and financial reporting and to ensure compliance with local listing requirements
  • Corporate treasurers and staff with knowledge of local regulations and skills, coupled with the ability to build relationships with local and emerging banks
  • Internal audit and financial control staff as companies look for possible growth avenues, including IPOs, and emerging global enterprises look to enter China
  • Finance and accounting talent in mid-sized service providers, retailers and other business-to-consumer companies, and property developers that are expanding their Hong Kong-based regional headquarters
What Companies Can Do
Companies that aim to retain their best people and those that are looking to persuade them to move have one common weapon: more money. Compensation – primarily base salary and discretionary bonus – is still the prime motivator for professionals switching jobs.
According to the Michael Page survey, the average salary increase for finance professionals in Hong Kong is likely to range between 3-5%. In addition, says the report, “senior finance professionals who have a significant impact on the business are anticipated to be rewarded with a higher bonus by employers looking to retain talent” – at 6-10% of gross salary (say 35% of respondents) or 11-15% (according to 31%).  
Bonuses for Finance Talent in Hong Kong
Bonus as percent of gross pay. Source: Michael Page Hong Kong Salary & Employment Forecast 2014
However, both Bentote and Aukland say non-financial benefits can also tip the balance towards staying or leaving. This may explain why 52% of the Hong Kong employers surveyed say they now offer flexible working arrangements to support employee work-life balance, compared with just 39% in 2013 – even though only 8% of companies consider work-life balance initiatives as an effective tool to attract and retain finance professionals.
The most popular tool is providing global career opportunities, cited by 48% of respondents. “This isn’t about moving abroad to make more money, but to gain experience and increase the chances for career advancement,” says Bentote. “Hong Kong is growing up, becoming more mature.”
Tools to Attract and Retain Finance Talent
Source: Michael Page Hong Kong Salary & Employment Forecast 2014
About the Author

Ida Mattsson is Online Editor at CFO Innovation. 


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