Salaries for professionals in a wide range of industries are likely to face downward pressure through 2019, as companies predict conservative increases in the year ahead. This is one of the key findings in the Hays Asia Salary Guide 2019, a report that highlights salary and recruiting trends based on responses from Hays Asia operating markets Mainland China, Hong Kong, Japan, Malaysia, and Singapore.

For the third year in a row, the Hays Asia Salary Guide has reported prevalence in salary stagnation in Hong Kong, culminating in one in ten (11 per cent) employees experiencing no increase in their salaries over the last year. However, this rise is fractional and still below the Asia average of 15 per cent.

In addition, signalling salary inertia in Hong Kong was the rise in employers reporting conservative increases of up to three per cent. In 2018, 27 per cent of employers had intended salary raises by this marginal amount, but this figure leaps to 35 per cent in 2019.

Salary the key

Although overall satisfaction rates on salary levels are improving in Hong Kong, most job seekers (66 per cent) cite salary packages as the key motivation for looking for a new employer. About three in five (64 per cent) employees claimed to be ‘satisfied’ and ‘very satisfied’ with pay levels, an improvement from the 51 per cent who said the same in 2018.

According to Hays experts, employers looking to retain their best talent should review their salary increment plans, particularly because it is also the second most common reason for staying with a current employer, after work-life balance.

Hong Kong candidates have also raised concerns over the transparency of pay level setting. More than three quarters of employees feel that transparency is important, but only 35 per cent agree that their organisation is transparent in this area.

“With the economy growing, business activity increasing and hiring levels rising, employees may begin to wonder why this improvement is not being passed on to them in terms of compensation packages, perhaps leading them to look elsewhere to rival organisations that may potentially meet their salary expectations. Employers looking to improve employee satisfaction levels on salary matters should, therefore, be more upfront about how the management reviews and distributes employees’ pay rises,” comments Dean Stallard, Managing Director at Hays Greater Bay Area.

Bonuses and Benefits

The Hays Salary Guide 2019 reveals that companies are looking to address the aforementioned concerns by compensating employees through alternative means, and employers who stated that they offered no bonus as part of remuneration packages fell from 13 per cent to seven per cent.

In addition, the percentage of staff likely to receive bonuses (93 per cent in 2019 vs 88 per cent in 2018) is also on the rise. Although companies are less likely to guarantee bonuses as part of remuneration packages, a clear majority are instead tying them to company and individual performance.

On top of offering bonuses, four in five companies (84 per cent) offer additional benefits to financial packages. While this is down from 86 per cent in 2918, it remains above the Asia average. Health and medical benefits remain the primary offering.

A rising trend of non-monetary benefits in Hong Kong is the provision of an extra vacation day on employees’ birthdays. While the rest of Asia lags in adopting such practice, with only 18 per cent of companies providing it, almost one third (32 per cent) of Hong Kong employers offer this additional annual leave.

Raises

“For employees who do not feel that their compensation package matches up to their worth, we advise them to reach out to employers and request salary increases,” adds Dean. “More Hong Kong employees are asking for raises with two in five of those who do proving successful, the highest number in Asia.”

“However, those requesting raises should consider the possibility of rejection and thus keep an open mind to potential responses from employers. Instead of salary increments, employees may be offered additional benefits, improved work-life balance or a salary review at a fixed date in the near future. Failing that, employees could stand to benefit in becoming more active in the recruitment market, as the improving economy and optimistic business outlook are leading to greater hiring activity in Hong Kong.”

Compared with Asia

The 2019 Hays Asia Salary Guide shows that salaries across the region rose less than they did in the previous year, with 15 per cent of employers saying that salaries remained unchanged as opposed to nine per cent in 2018. Japanese companies witnessed the greatest levels of stagnation, with 20 per cent seeing no change.

In addition, 45 per cent of organisations in Hong Kong, 34 per cent in Singapore and 46 per cent in Malaysia grew salaries by three to six per cent, though these numbers are also down from 2018 levels. However, ten per cent of companies in Mainland China increased salaries by more than ten per cent.

Over the coming 12 months, organisations in Malaysia (48 per cent), Hong Kong (44 per cent) and Mainland China (44 per cent) expect salaries to increase by three to six per cent, while those in Japan (52 per cent) and Singapore (40 per cent) predict increases of up to three per cent.

Employees have similar expectations, with those in Japan (42 per cent) and Singapore (29 per cent) believing that they can look forward to increases of up to three per cent, while employees in Hong Kong (34 per cent) and Malaysia (31 per cent) are more optimistic, hoping for three to six per cent increments. Employees in Mainland China are the most confident, with 44 per cent believing that their salaries will rise by more than 10 per cent in 2019.

Employees in four of the five regions polled cited ‘salary and benefits’ as the most common response as to why they are looking for a new employer, with 68 per cent of employees at Malaysian companies being the highest proportion with salary on their mind, followed by Hong Kong, Singapore and Mainland China (66, 60 and 57 per cent, respectively). Only individuals in Japan mostly favoured ‘new challenges’, though remuneration was their second choice at 51 per cent.

At 58 per cent, companies in Japan are most likely to award bonuses to ‘greater than 50 per cent’ of their workforce in 2019, while 14 per cent of companies in Singapore are not expecting to give out bonuses to their staff. Majority of employers in Singapore (85 per cent), Mainland China (88 per cent), Japan (83 per cent) and in Malaysia (88 per cent) cite ‘individual performance’ as the primary reason for awarding bonuses, while in Hong Kong they were mostly related to ‘company performance’ (84 per cent).

Get your copy of the 2019 Hays Asia Salary Guide by visiting www.hays.com.hk/salary-guide or by contacting your local Hays office.

- Ends -

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About Hays

Hays plc (the "Group") is a leading global professional recruiting group and is celebrating its 50th anniversary this year. The Group is the expert at recruiting qualified, professional and skilled people worldwide, being the market leader in the UK and Asia Pacific and one of the market leaders in Continental Europe and Latin America. The Group operates across the private and public sectors, dealing in permanent positions, contract roles and temporary assignments. As at 30 June 2018 the Group employed 10,978 staff operating from 257 offices in 34 markets across 20 specialisms. For the year ended 30 June 2018:

– the Group reported net fees of £1.072 billion and operating profit (pre-exceptional items) of £243.4 million;
– the Group placed around 77,000 candidates into permanent jobs and around 244,000 people into temporary assignments;
– 19% of Group net fees were generated in Australia & New Zealand, 26% in Germany, 24% in United Kingdom & Ireland and 31% in Rest of World (RoW);
– the temporary placement business represented 58% of net fees and the permanent placement business represented 42% of net fees;
– Hays operates in the following markets: Australia, Austria, Belgium, Brazil, Canada, Colombia, Chile, the Czech Republic, Denmark, France, Germany, Hong Kong, Hungary, India, Ireland, Italy, Japan, Luxembourg, Mainland China, Malaysia, Mexico, the Netherlands, New Zealand, Poland, Portugal, Russia, Singapore, Spain, Sweden, Switzerland, UAE, the UK and the USA