While 2019 began as a promising year for recruitment in Asia, the ripple effect of a slowing global economy has seeded uncertainty within the region. This has contributed to a more conservative outlook for hiring and compensation in 2020, finds the latest Asia Salary Guide report by leading recruitment experts Hays. In Hong Kong, employees remain satisfied with their compensation but are growing increasingly uncertain about the relevancy of their skills as the region continues to digitalise.

This year marks the 13th edition of the annual Hays Asia Salary Guide, which remains a definitive snapshot of salaries for positions across industries in Asia. The salary and hiring insights, including a thorough market overview of business outlooks, salary policies and recruitment trends, are based on survey responses from close to 6000 working professionals located in the five Hays operating markets in Asia; namely China, Hong Kong SAR, Japan, Singapore and Malaysia.

In Asia: Organisations gear for uncertainty

Despite optimistic projections, 2019 meted out market uncertainties that had some industries bracing for impact. This is most evident by the majority of employers in the region (42 per cent ) expecting a softening general outlook for their local economy in 2020, marking a decisive turn from the ‘static’ outlook that was voted consecutively for the last three years. An increasing number of companies also expect to give no increments to their employees in 2020, a number that climbed from 13 per cent in 2019 to 17 per cent in 2020. And while most employers still plan to award more than 50 per cent of their staff with bonuses (44 percent), more employers also plan on giving no bonuses in the coming year (14 per cent), as compared to last year (11 per cent).

Such an outlook will necessitate transformation, both in organisational structures and skillsets, which will result in new job roles and opportunities for professional development. This is evident by most organisations still expecting increased business activity (59 per cent) and headcounts (43 per cent) in 2020. Of all the Asian regions, Japan is expecting the highest increase in staff (52 per cent), as is evident by its tight labour market and falling unemployment numbers.

Candidates remain determined amidst looming skills gap

While the uncertain economic climate may have shook organisations, candidates seem as determined as ever in their search for greener working pastures. More candidates are actively looking for a new employer (36 per cent) as compared to last year (31 per cent), with their primary drivers for doing so remaining unchanged from the last four years; namely ‘salary or benefit packages’ (62 per cent), followed by ‘seeking new challenges’ (48 per cent) and ‘lack of career progression’ (45 per cent).

Their expectations for increments remain high as well. In the next 12 months, the majority of candidates across Asia expect increments of ‘between 3 and 6 %’ (24 per cent), followed by ‘greater than 10 per cent’ (22 per cent), and finally ‘up to 3%’, (21 per cent). While most employers expect increments to fall in the first two categories (35 per cent voted for each ), only a mere four per cent are expecting to give out increments of ‘greater than 10 per cent’. This could indicate a possible mismatch in higher salary expectations moving forward.

The majority of candidates believe their skills will continue to be relevant in the next five years (64 per cent), more are unsure of this (27 per cent) as compared to last year (24 per cent). This may be a result of economic uncertainty combined with the ongoing rapid pace of digitalisation that continues to transform job markets across the region, resulting in a pressure to upskill. Organisations are also increasingly aware of the impact skill shortages may have in the coming year, with a little more than half (51 per cent) being confident that they had the talent needed to achieve their current business objectives. Of these, Malaysia was the most confident (62 per cent) and Japan was the least (31 per cent).

In Hong Kong: Skills uncertainty grows as organisations go digital

Results of the survey revealed that 31 per cent of employees in Hong Kong are actively looking for a new job, up from 28 per cent in 2019. Of all Asian markets, respondents in Hong Kong were most likely to do so because of better salary packages (68 per cent) and conversely, were also the most likely to stay in a job because of their salary or benefits packages (44 per cent). This may be a reflection of the rising property prices and cost of living that has consistently positioned Hong Kong as one of the most expensive cities in the world.

However, Hong Kong also ranked the highest in Asia for the number of people who were very satisfied/satisfied with their current compensation packages (66 per cent) for the third year in a row. Most respondents expected a pay increase from ‘above 3% but less or equal to 6%’ in the coming year (30 per cent), while most employers expect their employee salaries to increase by up to 3 percent (38 per cent), indicating a slight mismatch in salary expectations.

Professionals in Hong Kong are also far more uncertain if their skills would still be in demand by employers five years from now, with the number of those being confident of their skills dropping from 72 in 2018 to 67 per cent in 2019. Similarly, organisations were also ‘not very confident’ they would be able to recruit candidates with the skills needed to meet their organisation’s needs (44 per cent) – the lowest score after Japan. Considering that most organisations still expect increased business activity in 2020 (47 per cent), this uncertainty may a be product of more companies seeking digitalisation as a way to counter harsh market conditions.

Jack Leung, Regional Director at Hays Hong Kong commented, “2019 was undoubtedly a challenging year for Hong Kong. However, the city remains one of the world’s top financial centres and freest economies and is set to break new ground with the entry of its first-ever virtual banks. Continued economic uncertainty has also pushed other industries to digitally transform their businesses in an effort to curtail costs and boost productivity. While the year ahead will continue to have its challenges, the ongoing rapid pace of change will undoubtedly create new opportunities as more organisations move to leaner and more digital ways of working.”

To download your copy of the 2020 Hays Asia Salary Guide, please click here.

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Hays, the world’s leading recruiting experts in qualified, professional and skilled people.

Hays is located in Hong Kong at 6604-06, 66/F, ICC, 1 Austin Road West, West Kowloon, Hong Kong.

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About Hays

Hays plc (the "Group") is a leading global professional recruiting group. 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 2019 the Group employed 11,500 staff operating from 265 offices in 33 markets across 20 specialisms. For the year ended 30 June 2019:

– the Group reported net fees of £1,129.7 billion and operating profit (pre-exceptional items) of £248.8 million;
– the Group placed around 81,000 candidates into permanent jobs and around 254,000 people into temporary assignments;
– 18% of Group net fees were generated in Australia & New Zealand, 27% in Germany, 23% in United Kingdom & Ireland and 32% in Rest of World (RoW);
– the temporary placement business represented 57% of net fees and the permanent placement business represented 43% of net fees;
– Hays operates in the following countries: Australia, Austria, Belgium, Brazil, Canada, China, Colombia, Chile, the Czech Republic, Denmark, France, Germany, Hungary, India, Ireland, Italy, Japan, Luxembourg, Malaysia, Mexico, the Netherlands, New Zealand, Poland, Portugal, Romania, Russia, Singapore, Spain, Sweden, Switzerland, UAE, the UK and the USA