Survey: HK workers' salaries expected to rise 3.2% next year

Hong Kong employees are expected to see more substantial salary growth in 2022, as the Asia-Pacific region gradually emerges from the shadow of the COVID-19 pandemic and the economy continues to recover, ECA International said on Tuesday (Nov. 16).

The consulting firm's latest salary trends report showed that workers in Hong Kong will on average receive nominal pay raises of 3.2 percent in 2022, 0.7 percent higher than this year, as companies expect a greater level of economic recovery next year. Real salary increases are expected to rise 1.1 percent after discounting an expected 2.1 percent inflation rate.

Compared to the nominal rate of salary increase, the real rate of salary increase refers to the rate adjusted for the proposed inflation rate.

Employers in the APAC region are increasingly optimistic in their financial outlook for the coming year and as the world begins to once again open up, and business and the economy in general look set to improve.

More than 130 companies in Hong Kong, including multinational firms and large-scale local ones, participated in the survey in August and September. Over 370 companies were surveyed globally.

The average rate of salary growth for workers in the city was 2.5 percent this year, slightly higher than the 2.1 percent anticipated by companies in last year's survey.

However, Lee Quane, regional director for Asia at ECA International, said that Hong Kong's salary trends still lag behind many other regions in Asia.

Hong Kong's nominal salary growth in 2022 is ranked 17th in APAC, and 15th in terms of real wage growth in the region.

Employees in Singapore and Taiwan are expected to see salary increases of 3.5 percent in 2022, Quane said, while workers in the Chinese mainland are predicted to see an average salary growth of 5.8 percent.

"Employers in the APAC region are increasingly optimistic in their financial outlook for the coming year and as the world begins to once again open up, and business and the economy in general look set to improve," Quane added.

He said that a lower percentage of companies are expected to enact salary freezes next year, with the number of companies doing so in Hong Kong dropping to 11 percent from 18 percent this year.

The slower rate of salary growth in Hong Kong compared to the Chinese mainland is mainly due to the continuing effects of the pandemic in the city, Quane said, adding that the growth of employees' salaries in the coming year may depend on the extent of the economic recovery, as well as the popularity of vaccinations, the reopening of Hong Kong to the outside world and some external situations.

Citing what happened after the global financial crisis in 2008, it could take four years for pay growth to return to its previous level, Quane added.

The report also showed that the real salary increase in the Chinese mainland is expected to hit 4 percent, the largest salary growth in Asia in 2022.

However, Quane noted that there are several threats to that happening, including the extent to which the zero-COVID policy could affect economic growth and the possibility of inflation exceeding forecast levels in 2022.

(Source: China Daily)