Salaries in HK seen to increase by 3.8%

A survey reveals employees in pharmaceutical & healthcare industry will see the biggest pay increases among all industries.

Facing climbing inflation rates and a fast recovering economy, ensuring competitive levels of salaries is now a key concern for many multinational companies in Hong Kong in order to engage and retain their best talent. According to Mercer’s Q4 Market Flash Survey conducted in December 2010, Hong Kong’s salary increase is set to reach 3.8% on average across industries in 2011. The figure is higher than the previously projected 3.4% according to Mercer’s Total Remuneration Survey 2010.

Mercer’s Q4 Market Flash Survey covers 84 multinational companies across a variety of industries including hi-tech, chemical, consumer goods, pharmaceutical & healthcare and a variety of other sectors in Hong Kong.

Among different industries surveyed, the projected salary increase figure for pharmaceutical & healthcare industry is the highest at 4.4%. Employees in hi-tech industry are expected to receive a relatively lower salary increase of 3.5% compared to other industries. “Some industries faced a relatively difficult business environment during the financial crisis, but they are now recovering with the economic upswing. Therefore, employers need to provide salary increments comparable to the overall market competitive rates in order to keep their best talent,” said Connie Leung, Hong Kong Business Leader for Mercer’s Information Product Solutions business.

The survey also reported that 45% of surveyed companies intend to increase headcount in the coming year and 54% of companies are looking at maintaining the same level of headcount. Only 1% of companies indicated they may reduce headcount in the next 12 months.

Overall staff turnover rate is reported at 9.6% across all industries for the first 3 quarters of 2010. The pharmaceutical & healthcare industry suffered the highest turnover rate at 12.7% and the chemical industry saw the lowest at 5.3%.

“We expect employers in Hong Kong to face a lot of pressure in terms of salary spend in 2011,” said Leung. “Increasing inflation causes employees to raise salary expectations. With an even higher turnover forecast for 2011, we predict compensation would once again be a key focus for employers in order to keep their talent and ensure business success in recovering economic conditions.”