Salaries in Hong Kong will increase by an average of 5 percent in 2015, according to the latest Salary Trends survey by ECA International. The figure is up from the 4.5 percent increases that local employees received this year. However, once inflation is factored in, staff in Hong Kong will see some of the lowest real pay rises in Asia.
"After inflation is taken into account, wages will rise 1.3 percent on average in Hong Kong next year – the third lowest ‘real’ salary increase in the region after Macau and Japan," said Lee Quane, regional director – Asia, ECA International.
"Nevertheless, the salaries of employees in Hong Kong will still increase more in real terms in 2015 than they did this year when they rose just 0.6 percent above inflation."
On average, salaries in the region are expected to increase by 7.2 percent in 2015. Factoring in inflation, real wage rises in Asia will average 2.7 percent – higher than the other regions surveyed.
Pay rises in Mainland China are still considerably higher than in Hong Kong. Companies there are planning to award 8 percent salary increases again next year, with employees based in Guangzhou set to get the most generous uplifts.
Even after inflation, staff in China will be among the best off within the region and globally: they can expect to see increases of 5.5 percent in real terms.
“Despite slower growth in China, wages continue to rise at a significant pace reflecting the ongoing need to attract talent. Each year we see the salary gap between Mainland China and Hong Kong narrowing, which is consistent with the general trend within the region of wage levels in developed and developing economies getting closer," said Quane.
“While there are fears that pay inflation is causing multinationals to relocate out of China, alternative locations which offer both cheaper wages and the necessary infrastructure are still limited," he added.
Asia – winners and losers
The biggest pay rises in the region have been forecast in Pakistan. Companies there are anticipating 12 percent rises on average. However, once inflation is taken into account Pakistan falls to third place in the list.
Employees in Japan will see the region’s lowest wage hikes next year. While much of the 2.3 percent increase is likely to be eroded by inflation, many workers there will feel slightly better off in 2015 than this year when pay increases have, on average, been below inflation.
In terms of ‘real’ salary increases, ie once inflation has been factored in, it is staff in Vietnam who will feel the best off in Asia. In contrast, employees in Macau will see their wages decrease in ‘real’ terms – the only location in the region likely to experience that in 2015.
Companies in Taiwan and Singapore are anticipating raising salaries in 2015 at the same rate as they have this year (4 percent and 4.5 percent respectively). However, with inflation expected to rise in both locations next year employees will experience lower increases in real terms than in 2014.
In Myanmar salary forecasts for 2015 will be above the regional average as companies look to attract the staff needed to develop the country’s newly opened-up economy. Good news, too, in terms of real wage increases which will be higher than this year’s.
According to company predictions from around the globe, wages will rise 5.8 percent on average in 2015, slightly up on this year’s 5.6 percent average.
Companies in Argentina are forecasting the survey's highest pay rises in 2015. Employers there are predicting 28 percent pay rises for staff next year on average. However, once inflation of over 27 percent has been factored in these large increases will have little impact on spending power.
In the US and Canada, companies are predicting 3 percent wage increases – the same as this year’s uplifts. In Europe, the biggest pay rises will be in Ukraine and Russia, although wages in the region will rise 3.5 percent on average – the same figure as in Australia. Employees in the Middle East are set to see wages rise 4.7 percent on average.