74% of Hong Kong employers expect to increase salaries, but this will vary according to performance; 52% to offer flexible working arrangements according to the latest employer survey conducted by Michael Page.
Hong Kong – 23 Jan, 2014: Hong Kong remains competitively positioned to attract companies looking to establish a presence in Asia, especially multinationals looking to gain a foothold in China, however talented professionals remain in short supply according to the Michael Page Hong Kong 2014 Salary & Employment Forecast (the report).
The report findings are based on an annual survey of employers in Hong Kong that includes responses from companies ranging from market leading multinationals to small and medium-sized enterprises. More than 500 employers contributed their views on salary increases, employee retention, bonus payments and recruitment activity. The report also includes market insights from the team of experienced Michael Page recruiters in Hong Kong.
According to this year’s report, average salaries in Hong Kong are expected to increase over the next 12 months, with 71% of all surveyed employers expected to offer salary increases of 1-5%. Sectors expected to provide employees with a higher salary increase of between 6-10% include Procurement & Supply Chain (50%), Secretarial & Office Support (42%) and Legal (33%). Based on survey responses, salary levels will primarily be affected by factors such as global economic conditions (60%), domestic economic conditions (58%) and competition between companies for talent (52%).
“The business-friendly environment in Hong Kong continues to attract many of the world’s best known companies. While some established businesses are beginning to look at setting up in other cities such as Shanghai and Singapore, Hong Kong’s deep pool of talent makes it hard to beat for companies starting out in the region,” commented Mr. Andy Bentote, Senior Managing Director of PageGroup in Hong Kong and Southern China.
Thanks to a robust employment market, Michael Page also witnessed significant growth in Greater China and achieved record revenue for the region in 2013. In particular, a resurgence in Financial Services in Hong Kong contributed to its revenue growth. Meanwhile, Michael Page also expanded its recruitment consulting team and increased its headcount by 21% to 420.
“Our focus has been to grow our business in line with our clients’ needs. For 2014, we believe that staff retention will be the key theme for employers in Hong Kong as competition for the best performers will be strong. Salaries are expected to rise across the board in line with inflation, but employee benefits are starting to play a bigger role in the decision-making process of employees,” continued Andy Bentote.
While Hong Kong is a mature employment market, there is progress to be made with regards to employee benefits offered by organisations. According to survey findings, 88% of employers plan to provide a bonus as part of the remuneration package however fewer businesses are offering non-financial benefits to retain talent, with 52% of surveyed employers to offer flexible working arrangements – an increase on 39% in the previous year’s survey, 45% planning on running team building activities and just 20% providing sabbatical leave.
“We know that the prime motivator employers use to retain staff is money. Although it isn’t common practice for companies in Hong Kong to grasp the importance of non-financial benefits, particularly when compared to employers in other developed markets, this is starting to change,” explained Andy Bentote.
Other report insights reveal that recruitment activity this year is expected to be strong in areas including retail, as ongoing consumer spending and the continued expansion of international retailers create demand for skilled retail staff. Meanwhile, the banking sector has seen improvements and this has led to hiring within mid-tier financial institutions in Hong Kong, especially small to medium-sized international banks.
The continued economic success of Asia is placing strain on companies in Hong Kong, with 62% of surveyed employers attributing business growth as the main reason for increased working hours.
“Employers not only need to deploy a strong hiring strategy this year but also ensure that they are able to retain staff in a market where the average tenure of roles is only one to two years. The right mix of financial incentives and employee benefits will be key to retaining the best performers in 2014,” added Andy Bentote.
To read the Michael Page Hong Kong 2014 Salary & Employment Forecast report in full, visit the News & Research Centre.