Hong Kong is experiencing increased optimism in the business sector in 2023, resulting in higher expected headcount demand from employers that will drive career opportunities and higher salaries, according to KPMG China.

Talent retention and attraction are likely to be major concerns for employers in 2023, the survey found. Expectations for salary increments when changing jobs remain high among respondents to the survey. At the same time, salary reviews are increasingly being used as part of companies’ retention strategy. Meanwhile, wages remain the most important motivation for professionals to consider switching jobs.

More than a third, or 37%, of all respondents expect staff numbers at the Hong Kong operations of their organisations to increase in 2023, up from 35% in 2022, with the percentage rising to 44% in 2023 from 40% in 2022 for C-level and HR respondents.

KPMG’s data showed that 74% of respondents expect an increase in salary in 2023, compared with 66% in the previous year. However, bonus expectations for 2023 have decreased, with 44% of respondents expecting an increase compared with 48% last year.

More than half, or 57%, of respondents expect a salary increase of at least 20% to change job.

Murray Sarelius, Partner, People Services, KPMG China, said, “The observed increase in headcount and salary expectations reflect the anticipated recovery as Hong Kong emerges from the removal of pandemic-related restrictions and the benefit of government support measures, while employers are looking for growth opportunities. In the tight employment market currently being experienced in Hong Kong, this demand for headcount can be expected to create strong competition for talent. This anticipated competition for talent has been reflected in similarly high expectations of salary increases in those industries that are showing the strongest intentions to increase their headcount.”

Meanwhile, Hong Kong professionals expect the flexible work arrangements adopted during Covid-19 to continue now that the pandemic situation has improved. Close to three-quarters, or 74%, of survey respondents rated flexible working among their top five most important benefits, however the data showed that only 49% of Hong Kong employers offer such benefits. Work flexibility and work life balance moved up to become the third most important motivation to switch jobs, after the salary and compensation package, and career progression and promotion.