Hong Kong employers have been more more prudent when making pay adjustment, partly affected by political upheavals in the region, together with concern about a slowdown in the economic activities of the Mainland.
In January 2014, Hong Kong recorded a lower overall average base pay adjustment of 3% and a higher average non-guaranteed bonus size of 1.77 months of base pay, according to a survey by the Hong Kong Institute of Human Resource Management.
Among the 80 surveyed companies, 32 of them, which had a total of 42,703 employees, made and confirmed their pay adjustment in January 2014.
The overall average base pay adjustment recorded for the 32 companies was 3% (weighted average), 1.4 percentage points lower than the forecast adjustment of 4.4% announced by the HKIHRM in October 2013.
Most of 96.9% of the 32 companies offered an overall base pay increase. One surveyed company recorded an overall zero base pay adjustment. No overall negative base pay adjustment was recorded.
However, decisions on pay adjustment still vary from sector to sector.
The three sectors which offered the highest overall base pay increase are: construction (6.6%), shipping/terminals (4.7%), and hotel (4.4%).
Of the 42,703 employees concerned, 69.7% received a positive adjustment in base pay, 30.3% received zero adjustment while no employee got a negative adjustment.
"We can see higher pay rise by some sectors such as construction which is quite hard hit by labour shortage," said Francis Mok, President of the HKIHRM.
Base pay constitutes a larger but not the only share of total remuneration. Nowadays, employers provide other incentives to better engage and retain their employees, such as bonus, benefits and career development opportunities.
Among the 80 surveyed companies, 39 companies indicated that they had a guaranteed-bonus policy. The average bonus size they offered was 1.01 months of base pay, which is slightly higher than the 0.99 month of base pay recorded for the period January to April 2013.
Among the 80 surveyed companies, 41 companies with a non-guaranteed bonus scheme confirmed their bonus payment during the survey period.
Of their eligible employees, 96.7% (33,674 employees) were awarded a non-guaranteed bonus, with the average bonus size being 1.77 months of base pay. This compared with 1.39 months of base pay recorded in the same period in 2013.
The three sectors which offered the highest non-guaranteed bonus amounts are: retail (5.33 months of base pay), financial services (4.93 months of base pay), and banking (2.4 months of base pay).
Labour market outlook
Among the 75 companies which provided data and expressed an opinion, 60% anticipated a growth in demand in the labour market, with such anticipation being more prevalent in the financial services, hotel, public utilities, hi-tech and retail sectors.
“The provision of higher overall guarantee and non-guaranteed bonus amounts reflected employers’ needs and willingness to reward employees for their hard work and contribution to corporate results in the past year," noted Mok.
Among those respondents which expressed an opinion on labour market outlook, 60% of them anticipated a growth in demand in the labour market.
The employment market is expected to remain buoyant this year. However, attention has to be put on certain sectors such as retail which may be experiencing some structural changes in its market.