Average Base Pay Increases by 3.8% in First Four Months of 2012

(Thursday, July 26, 2012) 

For Immediate Release

 Average Base Pay Increases by 3.8% in First Four Months of 2012
Pay increases narrow as employers remain cautious

[26 July 2012 - Hong Kong]   With ongoing concerns about the fluctuating economic situations, employers continued to adopt a prudent approach on pay rises, according to the results of the HKIHRM April 2012 Pay Trend Survey. The survey, which has been tracking pay adjustment in Hong Kong for more than two decades, was conducted by the Hong Kong Institute of Human Resource Management (HKIHRM). 

The HKIHRM April 2012 Pay Trend Survey covers a total of 94 companies from 17 sectors, with a total of 134,800 full-time salaried employees. Key findings of the survey are as follows:

Base Pay Adjustment – January to April 2012

A total of 67 companies from 16 sectors, employing 74,436 employees and making base pay adjustment between Jan and Apr 2012, confirmed their pay adjustment during the survey period (Jan and Apr) and provided relevant base pay adjustment data for the survey.

         The overall average base pay adjustment recorded for the 67 companies was 3.8%(weighted average), 0.1 percentage point higher than the figure recorded for the same period last year (3.7%) but lower than the forecast adjustments of 5.0% announced in November 2011 and 4.7% in February 2012. [Chart 1]

         97% of companies surveyed offered an overall base pay increase as compared to 100% in the same period 2011. One surveyed company recorded an overall zero base pay adjustment while another one with overall negative base pay adjustment. [Chart 2]

         Top three sectors which offered the highest overall base pay increase are: [Chart 3]

-          construction (6.5%)

-          engineering (4.9%)

-          shipping/terminals (4.8%)

         Of the 74,436 employees concerned, 76.0% received a positive adjustment in base pay, 23.9% received zero adjustment while 0.1% got a negative adjustment. [Chart 4] 

The survey results revealed that compared with the previous forecasts, the actual base pay adjustment reflected an economic slowdown and the corresponding cautious approach adopted by employers. “There are some signs of economic slowdown. For instance, in the first quarter of 2012, the gross domestic product grew slightly by 0.4% while the volume of goods exported to the Eurozone dropped by 9.3% year on year. Against this economic backdrop and with some disappointing economic data across the Eurozone, the US and China, we can see a difference in what was projected earlier this year and what was actually offered in the first quarter. Employers had become more aware of the economic situation and market changes,” said Mr Lawrence Hung, Chairperson of the Remuneration Committee of the HKIHRM.

Bonus Payment – January to April 2012 

Guaranteed Bonus

        Of the 94 companies providing data on bonus payment, 44 companies reported that they had a guaranteed-bonus policy. One company changed its policy in 2012 and incorporated the guaranteed bonus into base pay across 12 months. Forty-three companies awarded a guaranteed bonus to their employees, with the average bonus size being 1.01 months of base pay, same as last year’s figure. 

Non-guaranteed Bonus

        A total of 63 companies with a non-guaranteed bonus scheme confirmed their bonus payment during the survey period.

 

        Of their eligible employees, 97.7% were awarded a non-guaranteed bonus, with the average bonus size being 1.66 months of base pay. This compared with 97.4% of eligible employees actually awarded a bonus of 1.46 months of base pay on average in the same period last year.

 

        Top three sectors which offered the highest non-guaranteed bonus are: [Chart 5]

-          financial services (5.02 months of base pay)

-          shipping/terminals (2.95 months of base pay)

-          hotels (2.75 months of base pay) 

“Because of satisfactory business results and severe labour shortage in 2011, employers were willing to give out bigger non-guaranteed bonuses than the same period in the previous year. In recent years, our survey results showed that more companies chose to offer a pay-by-performance award system, which is considered to be fair and flexible. As a result, the provision of non-guaranteed instead of guaranteed bonus continues to be a growing trend. Non-guaranteed bonus is an option to help motivate employees and allow some flexibilities when operating under a turbulent economy coupled with a shortage of labour,” remarked Mr Hung.

Views on Labour Market Outlook in 2012

Among the 61 companies which provided data and expressed an opinion, 50.8% anticipated a moderate growth in demand in the labour market, with such anticipation being more prevalent in the financial services, property development/management, engineering, hotels, public utilities, and retail sectors. 

Conclusion

“At a time of economic and business uncertainties, employers’ pay adjustment plans tend to be more strategic. However, the war for talent is still common in some sectors. To retain valuable staff, many businesses at the same time place more focus on other benefit programmes such as work-life balance related policies, career advancement opportunities, and training and development programmes as indicated in our survey," concluded Mr Hung.

  

-  END -


[Please click here to download data charts] 

 

About HKIHRM
As the most representative professional human resource institute in Hong Kong, the Hong Kong Institute of Human Resource Management (HKIHRM), a non-profit making organisation, has more than 4,700 members, with 550 of who being corporate members. Founded in February 1977, the Institute aims at developing, maintaining and enhancing professional standards in HR management, and increasing the perceived value and influence of the HR profession. The Institute organises a wide range of professional activities such as multi-level training programmes and conferences, and provides services such as conducting surveys and publishing a professional journal. The HKIHRM is a member of the Asia Pacific Federation of Human Resource Management which is one of the continental federations under the World Federation of People Management Associations. For more information, please visit our website at http://www.hkihrm.org.

 

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