Employers are cautiously optimistic on the recovery for next year.
Businesses are hopeful for an economic recovery as they expect salaries to increase by 3% on average in 2021, according to a forecast by ECA International.
The expected recovery is amidst the 2.1% rate of salary growth this year due to unfavorable economic conditions brought by the impacts of sociopolitical tensions in the city and the COVID-19 pandemic.
“The expected rebound to 3% in 2021 shows that employers are cautiously optimistic about the prospects for recovery next year. However, the fact that these rates remain lower than 2019 reveals that any recovery is likely to be gradual,” ECA International regional director Lee Quane said.
Real salary increases, which reflect increases in employee incomes after inflation is taken into consideration, will be relatively low at 0.6% in 2021.
Moreover, there is an expected drop in the number of Hong Kong-based companies implementing salary freezes in 2021.
“40% of organisations in Hong Kong applied salary freezes this year amid the pandemic and the devastating effect it had on the economy. However, in the face of a possible vaccine being rolled out next year, only 25% of companies are expecting these freezes to last into 2021, offering signs of improvement to businesses and employees based in Hong Kong,” Quane said.
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