A shortage of talent may present a difficulty for hiring managers, but it's good news for senior executives in Hong Kong and mainland China, two-thirds of whom across all sectors anticipate a pay rise this year, according to a KPMG survey. In addition, nearly half expect a bonus increase.
The optimistic finding, which comes even as Hong Kong's unemployment rate hit a nine-month high of 5 per cent, represents a marked change from last year: The percentage of senior executives expecting a pay rise increased by 53 per cent compared with a year ago, while the percentage foreseeing a fatter bonus is up 66 per cent. The sixth-annual edition of the KPMG research surveyed 794 senior executives, 192 based in mainland China and the rest in Hong Kong.
Optimism about pay increases jumped the most in the professional services and consumer sectors, where the number of executives expecting a pay rise increased by 100 per cent and 88 per cent over last year, respectively.
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"It is about retention of good people, but professional services business have not been as affected as retail and hospitality businesses," Jerry Chang, managing director of executive search firm Barons & Company said. "Firms need to retain good people and are also anticipating good business."
HSBC headquarters and Standard Chartered building in Central, Hong Kong in October 2021. Photo: SCMP / Nora Tam alt=HSBC headquarters and Standard Chartered building in Central, Hong Kong in October 2021. Photo: SCMP / Nora Tam>
Bonus expectations are running highest in the financial-services sector, with 55 per cent of respondents anticipating a heftier bonus than last year, which was 3.46 times their monthly salary, according to KPMG. About half the respondents in the real estate, consumer and information-technology sectors expect a better bonus this year.
"Banks in Hong Kong have now found themselves competing for talent on the ground," said Andrea Randall, a partner at law firm RPC. "Vast sums are being offered to poach employees from competitors and, in response, substantial pay rises are being offered to retain staff."
A brain drain among mid-level managers, due to emigration and expats departing Hong Kong, has made it imperative for companies to retain talent, resulting in positive salary and bonus outlooks, Chang said.
"As there are fewer people around, companies are concerned about retaining good people," he added. "They are willing to pay more money to senior executives, especially within banking."
A separate survey from Hays Asia released this month showed that the outflow of talent had been concentrated in finance and accounting sectors over the past two years, and is expected to continue. It also found that four out of 10 employers in Hong Kong plan to increase salaries by up to 3 per cent, while a quarter intend to offer a pay rise of between 3 and 6 per cent.
In spite such optimism, not everyone will see a substantial pay rise, according to George Leung Siu-kay, chief executive of the Hong Kong General Chamber of Commerce. Expected weaker economic growth this year and higher unemployment due to the fifth wave of the outbreak in the first quarter will prevent an across-the-board rise, said Leung, whose organisation has more than 4,000 member firms that employ more than 1.3 million people in Hong Kong.
"Some of the sectors, especially in banking and finance, are in short supply and therefore increasing pay to retain key staff, given that Hong Kong is experiencing an outflow of talent due to emigration and travel restrictions," Leung told the Post.
While neither the Hays Asia nor KPMG surveys reflect the fifth wave of Covid-19 infections, industry observers remain optimistic about hiring prospects for the rest of the year.
"The fifth wave might have dampened the outlook in the short term since the survey was conducted," said Murray Sarelius, head of people services at KPMG China. "However the recently announced relaxations should bring a brisk return to the strong optimism indicated in the survey results, as has been seen in other jurisdictions, as they work their way through the pandemic and related restrictions."
This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2022 South China Morning Post Publishers Ltd. All rights reserved.
Copyright (c) 2022. South China Morning Post Publishers Ltd. All rights reserved.